American apparel company VF Corp., the owner of brands such as Vans, The North Face and Timberland, is working with China technology company Tencent Holdings Ltd. to expand its e-commerce footprint in that country.
VF Corp. said it is shrugging off continuing political tensions and the effects of the virus pandemic by continuing with its overseas expansion plans.
VF Corp.'s new agreement with Tencent follows similar deals between other China e-commerce players such as JD.com and Alibaba's Tmall. The agreements have helped VF Corp. sell more products in China. It said it had increased online sales there by more than 36 percent during its latest quarter ended June 30.
The company reported better-than-expected results in the China market. For its latest quarter the company reported a 9 percent rise in revenues in mainland China - the only market that reported growth in revenues. Overall, the company reported a 47 percent decline in its international revenues and attributed this to the effects of the coronavirus.
VF Corp. is pushing ahead with opening more physical outlets in mainland China. The company currently has 160 stores there.
It will mostly be prioritizing investments in Asia and China for the coming quarters, the company's executive vice president for Asia-Pacific and emerging brands Kevin Bailey said in a statement. China remains the best bet for international retailers given its economic rebound, he said. Other countries are still recovering from the pandemic and sales will likely remain low in those markets in the short term.
As part of its expansion VF Corp. plans to open its first Vans flagship store in China. It will be the third Vans store outside of the three it has in the U.S. The other two are in London and South Korea. The new store will be built in Shanghai's East Nanjing Road - the city's busiest shopping area. Unlike its other stores, the China outlet will have a mix of online and offline products. Tencent has agreed to link its social media and gaming platforms with Van's online store.
