The casual wear boom that is born from the Covid pandemic will continue to drive clothing sales, Kontoor Brands president and CEO Scott Baxter told CNBC on Thursday.
“You’ve seen a global coincidence that’s taking hold now, so I’m telling people it’s not cyclical, it’s here to stay. That’s how the world is going to look forward,” Baxter told Power Lunch.
“People have to dress more casually and more comfortably,” she said. “They’re very confident in denim and T-shirts, and they feel like an expression, too … after being at home for a year and a half, no one wants to upgrade their wardrobe to a really high-waisted wardrobe.”
Sales increased for clothing items such as pajamas and T-shirts as consumers began to spend most of their hours at home in 2020, and clothing companies popularized the fashion trend. comfortable wardrobe. Americans maintain a pandemic-inspired “work-hobby” style as they return to office this fall, and department stores and department stores offer more casual items.
Kontoor Brands, which mainly sells denim under the Wrangler, Lee and Rock & Republic brands, said $ 491 million in revenue for the second quarter, an increase of 41% compared to last year. Wrangler’s global revenues were up 24%, up from $ 311 million, during this period compared to last year, and Lee increased by 105%, to $ 176 million.
The company’s share price has risen more than 165% over the last year.
“We’re just building better products that people pay more for and buy more,” Baxter said. He said Wrangler has gained strength in digital and international sales, developed a better product that could sell for a higher price in many categories, and cleaned up its sales channels to increase revenues.
Baxter said Kontoor is now moving beyond jeans to sell more outdoor accessories, T-shirts and workwear to keep up with the adaptation of consumers ’preferences.
“We did a survey of a lot of our consumers and found that 84% of people have to upgrade their clothing, and a lot of that will be in the casual sector,” Baxter said. “Denim is going to be really a big winner here, but also the T-shirts and some more different clothing tastes from a casual standpoint … we’re positioned really, really well with that casualness to the world.”
Although supply chains have been squeezed out in the midst of the pandemic, Kontoor has struggled less than most in the clothing industry because it has its own manufacturing plants in Mexico and Nicaragua, Baxter said.
“It was a strategic choice” made during the company’s spinoff by VF Corporation in 2019, he said, which ultimately helped during the pandemic.
“We’re doing the best we can to meet demand in addition to the fact that there’s increased demand and also in addition to the fact that our brands are really amplifying now,” Baxter said.