How Vans Skated Past a Big Retail Milestone

Inside The D23 Expo 2015
Vans Inc. shoes featuring Walt Disney Co.'s Mickey Mouse character are displayed for sale during the D23 Expo 2015 in Anaheim, California, U.S., on Friday, Aug. 14, 2015. The D23 Expo 2015, presented by the Official Disney Fan Club, includes sneak peeks of upcoming films from The Walt Disney Studios, celebrity appearances, as well as a look at what's coming from Disney Parks and Resort. Photographer: Patrick T. Fallon/Bloomberg via Getty Images
Patrick T. Fallon—Bloomberg via Getty Images

Vans, the highly popular, eternally youthful skater footwear brand, hit a major milestone last year: It eclipsed The North Face juggernaut as apparel giant VF’s top-selling brand.

The 51-year-old Vans saw sales hit $2.3 billion in 2016, after years of work expanding the brand’s appeal beyond teenage skateboarders. It did that by being selective about where its products are distributed and also by leveraging one of the biggest assets VF (VFC) brings to its stable of labels: tech. And Vans has been careful to use those advances in the service of the brand rather try to change its personality.

Take Vans’ upcoming launch of a major new line, the UltraRange. The shoe, which hits stores this summer, features light cushioning and mesh to make it breathable, responding to what Vans’ athletes want. And a few years ago, Vans launched the All Weather Mountain line, with water-repelling and weatherized materials to make the shoes more resistant to snow and rain. Those were technologies that VF developed and that outdoorsy brand Timberland, another VF company, also taps into.

“This isn’t about trying to replicate Timberland,” Doug Palladini, Vans global brand president, told Fortune in a recent interview. He added: “We saw a lot of white space in becoming a four-season brand.”

One of the most crucial balancing acts for VF is to make sure brands share tech advances and efficiencies without becoming too similar to one another or cannibalizing sales. It is particularly crucial, as VF CEO Steve Rendle told Wall Street analysts on Thursday at the company’s investor day, because 45% of Vans consumers also buy The North Face. So far the balancing act seems to be working: As Palladini said at the same conference, “We’ve leveraged the research center, we’ve leveraged the supply chain.”

By the time VF bought Vans in 2004, for $396 million, it had been deemed tired by Wall Street. The brand has countless Generation X fans, thanks in part to cultural milestones like the 1982 movie Fast Times at Ridgemont High, in which Sean Penn’s slacker character Jeff Spicoli wore white checkered Vans slip-on shoes, and some analysts believed sales would sputter out as those fans aged.

But focusing on innovation has helped Vans stay relevant with ever-fickle younger consumers: It still does best with shoppers aged 16 to 34. Sales growth continued under VF, and Vans posted impressive double-digit growth for five straight years between 2010 and 2014, followed by a still-strong increase of 7% for 2015 and then 6% last year, vaulting it past The North Face. Not bad for a brand born on March 16, 1966 in Anaheim, Calif., when Paul Van Doren opened up a retail store whose wares quickly caught on with the skateboarding crowd.

Of course, any youth-oriented brand knows you can quickly slide into irrelevance if you don’t keep up. Vans’ five most popular sneaker styles—the Authentic, the Era, the Slip-on, the Old Skool and the Sk8-Hi—are constantly refreshed and updated with new materials and looks.

And last year, for its 50th birthday, Vans hosted events across several cities, including at two “House of Vans” locations in Brooklyn and London and at pop-ups in cities including Toronto, Mexico City, Hong Kong and Cape Town. The brand uses its stores for marketing opportunities, such as shoe personalization and do-it-yourself design workshops. Last year, Vans held a pro competition in four countries to create buzz around the fact that skateboarding will be an official Olympic discipline for the first time at the 2020 Tokyo Games.

For all its success, Vans still has a lot of runway. Palladini told investors the brand commands only 5% of the $39 billion U.S. footwear market and 1% of the apparel market. (The brand gets about 20% of its revenue from clothing and accessories, and the rest from footwear.) Vans, which started out as a retailer all those years ago, has been adding about 50 stores a year (600 worldwide or so now). Still, the brand will be careful about not going on an expansion binge by opening tons of stores and selling through many more outside retailers, lest it hurt its own cachet.

“Ubiquity is not Vans’ objective,” Palladini said. “We’re not for everybody.”

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