Start of Interview with
Eric Wiseman, CEO
VF Corp....


Jim:      Mr. Wiseman, welcome back to Mad Money.

Eric:     Hi, Jim. Glad to be back, thank you for having us.

Jim:     Absolutely, now… first I want to understand your view of retail at this moment. Is this the worst you have ever seen it?

Eric:     Well, it is clearly difficult out there. The degree of difficulty in execution of our own retail stores is really high. And we have a slow down in our own retail stores. But we are still having positive comps, we had positive comps even in the fourth quarter, though they were barely positive and we expect to see positive comps in our own retail stores for the balance of 2009. But you are right, it is tough out there.

Jim:     Could you talk about traffic… in other words… you can’t sell stuff unless people come out. I go to the malls… I have to tell you they are empty… I am constantly am on the prowl… are you getting any store traffic?

Eric:     Well, there are two keys to look at when you are looking at that. One is traffic and one is conversion. Clearly traffic is down, but we have really compelling brands in our North Face, and Vans, and Nautica and other stores, and our conversion is solid. And that is why we are able to hold onto our business we think right now, and you are right, traffic is down but conversion is still okay for us.

Jim:     How much are you hostage to retailers who have to dump product… I have been trying to tell people that if retailers have to put your stuff on sale, it doesn’t hurt you it hurts the retailers margins… you are just selling more stuff… is that the correct way to look at VF?

Eric:     Well, we have many different models, and in some of our models that is true, and in others it is not. One thing that we did not do this year, was match a lot of price that other retailers when they discounted our products where we also have it in a known retail store, we tried to hold price. Because we are trying to build brands for the long term year, and we know that that comes with a value understanding from consumers, and we don’t want to get our prices get too low in our own stores.

Jim:     How do you keep… I don’t want to pick on any particular retailer, let’s just call it XYZ retailer… from slashing the price of North Face, which everybody loves… just to get people in the store therefore making it so you can’t protect your own price point at other places?

Eric:     As you know legally, once we sell a product to somebody they get to determine the price. But we obviously do have discussions with them about what the right thing to do for our brands is.

Jim:     Alright, good… now the last time you were on you talked about this push into international… taking a lot of people putting them international… international has slowed dramatically… any regrets about that push?

Eric:     No, our international business was pretty good. You know last year we went from, it was 28% of the VF Corporation and 2007, it grew to 31% last year. In constant dollars it grew 12% last year, and in US dollars, translated to US, it was up 17%. That has been a success story for us. We are going to continue to invest in it. It has changed a little bit in dimension, we are focusing much more on China now. China is a very big growth market for us. We are expecting 29% growth in 2009, out of our Chinese business.

Jim:     Any slow down in China? … we know that the exports have been terrible, the imports have been terrible.

Eric:     Well, the fact is that we are relatively new to China. So we are ramping up. We have had a great jeans wear business there for over a decade, we launched the North Face there in 2007, we launched Vans there in 2008, we are going to be launching some new brands there this year. So, we are getting growth because we are so new, and we have a platform to build from.

Jim:     Alright, Eric, we love dividends on this show… because it is one of the few things that you can consistently bank on… are we being too positive in saying that your dividend is safe here?

Eric:     Well, I heard in the intro you mentioned how long we have been increasing our dividend. And we are committed to paying our dividend, we just increased it again last October for the current year. So we are completely committed to it, Jim.

Jim:     How about the chaos out there… isn’t this a great opportunity, a lot of the brands that you normally would have thought about buying got over inflated during the bull market… everything is crashing now… a lot of the companies that went private are deeply struggling in debt… is this VF’ time to pick off some great brands?

Eric:     Well, we are clearly active in that area. And there have never been more interesting opportunities, and obviously the multiples are coming down, so it is becoming more affordable. It was 3 or 4 years ago, there are lots of great brands to look at. And we are looking.
Jim:     Which do you like… when you look out the window and it is cold in the winter do you say hey this could be good for North Face… or is that too simplistic?

Eric:     Actually, weather is a driver of the North Face business. And when it is cold it is good for us. Actually bad weather in general helps the North Face, we will take cold or rain.

Jim:     If you had to try to figure out where your next initiative would be… if you were interested Seven For All Mankind… we know the Eastpak… we know Vans… do you want to be in shoes… do you want to be in coats… do you want to be casual wear… outdoor wear… where are you looking?

Eric:     Right now our focus is in three what we call coalitions. We are focused in our contemporary brands coalitions, which is built around Seven For All Mankind. We are still focused on our outdoor and action sports categories, as well as other just general sportswear.

Jim:     Excellent, Eric Wiseman, great CEO of VF Corp. Thanks for coming on the show.

Eric:     Thanks for having us, Jim.