Skechers CFO Takes Over Finances at Levi Strauss
John Vandemore, who led Skechers' finances for nearly a decade, will become CFO of Levi Strauss & Co. on November 1. He will succeed the retiring Harmit Singh and help the brand grow to $10 billion in revenue.
Levi Strauss & Co. has named John Vandemore as its new chief financial officer. Vandemore spent nearly a decade leading the finances of footwear brand Skechers. The decision takes effect on November 1, according to a company statement.
Vandemore succeeds Harmit Singh, who held the CFO post at Levi's for many years. The company announced his retirement earlier this year. Singh will remain at Levi's as an advisor until November 30 to ensure a smooth handover.
Before joining Skechers nine years ago, Vandemore held leadership positions in the finance and operations divisions of Mattel, The Walt Disney Company, International Game Technology and a number of consulting firms.
Financial Symmetry of the Two Brands
Skechers' financial performance strengthened noticeably during Vandemore's tenure, and analysts see his appointment as a good sign for the jeans maker. The footwear brand's revenue grew from $4 billion in 2017 to $10 billion last year — which, coincidentally, is exactly the target Levi's has set for itself, noted Laurent Vasilescu, senior analyst at BNP Paribas Equity Research, in a research note on Thursday.
The brands are similar in other respects as well. Both are global lifestyle brands with similar margins (EBIT operating margin of around 10%), similar sales geographies (about half of revenue comes from the Americas) and channel structures (roughly 55% wholesale, 45% direct-to-consumer, DTC), wrote analysts at Needham led by Tom Nikic.
"We have known Mr. Vandemore for nearly ten years and consider this a strong appointment," Nikic said in an emailed comment on Thursday. "Mr. Vandemore spent nine years as CFO of Skechers and helped the company become one of the largest footwear brands in the world, with revenue of more than $9 billion."
Betting on Direct Sales
Vandemore arrives at Levi's at a time when the company, like Skechers, is increasing its share of direct-to-consumer sales. Levi's is opening new flagship stores to accelerate growth in the DTC segment.
In the latest quarter, DTC accounted for slightly more than half of Levi's revenue: the channel grew 11%, while wholesale rose 5%. However, credit card data points to declining DTC sales in the U.S. quarter over quarter, and unusually warm weather in Europe could hurt direct sales there as well, Vasilescu warned.
Levi's CEO Michelle Gass emphasized the company's ambitions in a statement, noting that Vandemore is arriving "at a pivotal moment for our company."
"We are building a more direct-to-consumer-focused business, unlocking the full potential of the Levi's brand, and transforming LS&Co. into the world's leading denim lifestyle retailer," Gass said. "John's deep financial, operational and consumer expertise, combined with his proven ability to help global brands scale and grow profitably, makes him the ideal partner in executing our ambitious plan to become a $10 billion revenue company."
Original: techtarget.com
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