Wrangler’s mum or dad firm CEO says “world casualization” will dominate the attire market
The boom in leisurewear resulting from the Covid pandemic will continue to lead apparel sales, Scott Baxter, president and CEO of Kontoor Brands, told CNBC on Thursday.
“You’ve seen a global casualization taking hold right now, so I’m telling people it’s not cyclical, this is here to stay. This is what the world will look like in the future, ”said Baxter at“ Power Lunch ”.
“People will dress more casually and comfortably,” he said. “They’re very confident in jeans and t-shirts, and they feel like it’s an expression too … after being home for a year and a half, no one wants to upgrade their wardrobe to a really high-class wardrobe.”
Sales of garments such as pajamas and t-shirts skyrocketed as consumers started spending most of their time at home in 2020, and apparel companies popularized the trend for comfortable, cozy wardrobes. Americans are maintaining a pandemic-inspired “work-leisure” style when they return to the office this fall, and big brands and department stores are offering more leisure items.
Kontoor Brands, which primarily sells denim under the Wrangler, Lee and Rock & Republic brands, posted sales of $ 491 million in the second quarter, up 41% year over year. Wrangler’s worldwide sales increased 24% year over year to $ 311 million and Lee’s worldwide sales increased 105% to $ 176 million during this period.
The company’s share price rose more than 165% over the past year.
“We’re just building better products that people pay more for and buy more of,” said Baxter. He said Wrangler had gained traction in digital and international sales, developed a better product that could be sold in multiple categories at a higher price, and cleaned up its sales channels to increase sales.
Kontoor is now expanding beyond jeans to sell more outdoor gear, t-shirts and workwear to keep up with adjustments in consumer preferences, Baxter said.
“We surveyed a number of our consumers and found that 84% of people will upgrade their wardrobe, and much of that will be in the recreational sector,” said Baxter. “Denim will actually be a big winner there, but that will also be t-shirts and a few other clothing preferences from a casual point of view … we are really very well positioned worldwide with this casualization.”
Although supply chains have been squeezed amid the pandemic, Kontoor has fewer problems than most others in the apparel industry because it has its own manufacturing facilities in Mexico and Nicaragua, Baxter said.
“It was a strategic option” made during the company’s spin-off from VF Corporation in 2019, he said, which ultimately helped during the pandemic.
“We’re doing our best to meet the demand, on top of the fact that demand has increased and on top of the fact that our brands are really growing right now,” said Baxter.