Streamlined focus on digital, core denim offering helps Kontoor turn corner
Kontoor Brands (the owner of denim brands Lee, Wrangler and Rock & Republic) recently reported financial results for its fourth quarter and the fiscal year that ended January 2, 2021.
The company’s revenue for Q4 was $661 million, a 1% increase on the previous year, thanks to a strong digital performance (including own.com) and improved sales across the Wrangler US wholesale business and in international markets such as China and Europe.
Its overall revenues for 2020 decreased to $2.1 billion, however, which represented an 18% year-on-year decline.
Kontoor attributed this decline to temporary wholesale and owned door closures on account of covid-19-related stay-at-home orders, both domestically in the US and internationally.
President and CEO, Scott Baxter, commented: “We finished 2020 with great momentum, a testament to our teams’ unwavering focus on execution throughout this unprecedented year.
“Our strong fourth quarter performance is also a result of the strategic measures we’ve taken over the last two years, allowing us to not only navigate near-term challenges, but also position the company for success in 2021 and beyond.”
Kontoor made the decision to exit 38 VF Outlet stores and discontinued the sale of third-party branded merchandise in all stores during 2020. It also transitioned to a new licenced business model in India and went ahead with planned reductions in the sale of goods manufactured for third parties and the Rock & Republic brand.
The company said that it expects revenues to increase in the low double-digit range in the 2021 fiscal year, compared to 2020 levels.
