Inside Outdoor Magazine

VF Corp. Goes Circular Editor’s Letter Martin Vilaboy Editor-in-Chief martin@bekabusinessmedia.com Percy Zamora Art Director outdoor@bekapublishing.com Ernest Shiwanov Editor at Large ernest@bekapublishing.com Berge Kaprelian Group Publisher berge@bekabusinessmedia.com Rene Galan Associate Publisher rene@ bekabusinessmedia.com Anthony Graffeo Associate Publisher anthony@bekabusinessmedia.com Beka Business Media Berge Kaprelian President and CEO Neil Ende General Counsel Jim Bankes Business Accounting Corporate Headquarters 15560 N Frank LloydWright Blvd Suite B4 – 5433 Scottsdale, AZ 85260 Voice: 480.503.0770 Fax: 480.503.0990 Email: berge@bekabusinessmedia.com © 2018 Beka Business Media, All rights reserved. Reproduction in whole or in any form or medium without express written permission of Beka Business Media, is prohibited. Inside Outdoor and the Inside Outdoor logo are trademarks of Beka Business Media “We were inspired by the idea that we need to make the second life of apparel second nature,” said Letitia Webster, vice president of global corporate sustainability for VF Corp., while speaking to business news source Environmental Leader about the next phase of the company’s sustainability strategy. For an outdoor industry greatly concerned about minimizing footprints and provid- ing transparency, those are highly welcomed words. It’s the dirty, little not-so-secret of the apparel business: making clothes can be a dirty process. One has to look to petroleum to find an industry that pollutes the planet more than the fashion and apparel industries. Fast-fashion and off-price apparel only have made matters worse. So any effort to extend the product life of apparel is worthy of attention and applause. For those operating in outdoor apparel and activewear supply chains, however, the business impact of Webster’s words are somewhat less clear. Up to this point, the apparel re-sale model largely has been the domain of upstarts and disruptors. But when the name behind The North Face, Timberland, JanSport, Smartwool, Icebreaker, Vans, Lee, Wrangler, Eastpak and Eagle Creek, among others, throws its weight into a movement, the market suddenly falls under the domain of just about everyone involved. Not to discount the efforts by the early innovators. Companies such as ThredUP, RealReal and Yerdle have collected literally millions of garments for resale from in- dividual shoppers, with ThredUP claiming to add 1,000 items every hour to its used garment selection. Most of the re-commerce sites rely on networks of individual sellers who “trade in” lightly used garments for credit or cash. Buyers, meanwhile, get discounted prices on name brand stuff. But in an effort to “transform” the apparel industry, or at least VF Corp’s apparel business, VF is looking to move toward a circular operation that integrates this re-sale and re-commerce economy throughout its entire apparel supply chain. From production to distribution to retail and return, the plan is develop a cycle built around three actions: rental, re-commerce and design for circularity, said Webster. Partners and suppliers are being asked to step up and help “extend the life and the value proposition of our prod- ucts and materials” to create a more sustainable operation for the long term, she said. “We have to change to a circular business model. We have to leverage our scale around our three biggest material issues: climate change, worker well-being and ma- terials,” said Webster. “And we need to move from sustainability being the sustain- ability team’s responsibility to our biggest stakeholders adopting, integrating and helping to activate it.” Webster believes VF has the scale and clout to push for change. Although it certainly won’t be easy, she admitted, as the company and its partners essentially “have to reverse the logistics on all of this,” she said. “The entire economic system is not based on taking products back from consumers. There is not a lot of infrastructure,” Webster continued. “How do you get consumers comfortable with the idea of putting clothes into a box to send back to a brand? Who does it go back to? Our distribution centers aren’t set up to take products back, wash them, clean them, repair them and put them on an e-commerce site to sell them again.” The company is currently working with its leading distributors to hammer all this out, said Webster, who also sees a role for physical retail. “Every time we put a takeback program into one of the retail stores, our traffic to that store goes up, the conversion rate goes up, and the average retail sale goes up,” she said. “Consumers are interested. There is something tangible that resonates with them.” Webster also mentioned REI as a partner in its early re-commerce initiatives. According to ThredUP, the re-sale apparel market hit $20 billion in sales last year, accounting for 5.6 percent of all apparel dollars in 2017. The market is expected to hit $41 billion by 2022, when it will account for about 10 percent of sales. With VF Corp.’s extensive reach and recognition, those 2022 estimates suddenly became much more attainable. – MV Inside Outdoor | SPRING 2018 6