Reinvention in a post-Covid-19 world

Transformational strategies are based on companies reinventing themselves. A transformational strategy is very difficult to define, but as the saying goes: You will know it when you see it.

In today’s topsy-turvy world companies must reinvent themselves if they are to have a future, which is very difficult!

However, there are some companies that have reinvention as part of their culture and where transformational strategies are an ongoing process.

For over 70 years VF Corporation was in the lingerie business under the name Vanity Fair. However, around 1986, the company made the decision to reinvent itself.

Looking back, we can understand why management transformed the company. Vanity Fair was a mature brand and would never provide the growth VF needed to become a major player in the global garment industry. In the long run, it was better to sell the brand while it was at its peak.

The new VF decided its core competency was not girdles or bras. It was the ability to take small and medium-sized labels and turn them into major brands. The company became a conglomerate of brands. It bought Lee and Wrangler and became the world’s second largest jeans operation. Over time it bought Nautica, Napapijri, North Face, Timberland, Vans and a whole slew of workwear companies. The buying spree continued until about 2015 when VF decided to reinvent itself yet again.

VF as a garment conglomerate suffered from the same problems faced by earlier 1960s conglomerates. It had become a group of unrelated semi-independent companies, many of which could not be integrated into the VF culture.

Some brands such as Nautica were still viewed as an independent operation which meant the expected synergy was never fully realised.

The 2.0 VF will be very different. We can already see the change by the number of brands the company offloaded (18+) since 2016. Among the most interesting are the great jeans labels Lee and Wrangler that in 2019 were spun into a new company: Kontoor Brands (Contour was already taken).

It is too early to speculate why the company's management has once again decided to transform the company. Where it is going, and how it plans to get there are still beyond our understanding. All we can see is VF is once again reinventing itself and based on its past performance, it will succeed.

This company is 140 years old. For most of that time, PVH has been in the shirt business, first with the Phillip-van Heusen label, later adding Izod and Arrow  Shirts. Starting in 2002 with the purchase of Calvin Klein, PVH started its transformation process.

Looking back, we can speculate on the reasons behind its reinvention, such as: 

• The shirt labels were all mature brands with limited potential for growth.
• Management recognised the need to move into the European market but found shirt labels were not the way to go.

In 2010, the company’s management decided to reinvent PVH as a designer fashion company. In that year PVH closed its European shirt operations and bought Tommy Hilfiger. The transformation reached its conclusion in August of this year with the sale of shirt brands Phillip-Van Heusen, Izod, Arrow and Geoffrey Beene.

I believe this new iteration overcomes the problems of the past. As a designer fashion company PVH has room for growth and the company has a viable position - not just in Europe, but globally.

Companies such as VF and PVH remain successful even in the most difficult and uncertain times because rather than circumstances forcing radical change, transformation is seen as an ongoing process.