No industry touches us more frequently or intimately than the apparel industry. Yet few if any books document the history of this important industry. There are plentiful books about costume and fashion trends, but not about the enterprises which made the clothes. Here we tell the story of VF Corporation, formerly Vanity Fair, today America’s largest publicly held apparel company.
The first large American factories were textile companies in New England. We used those textiles to make our own clothes, especially with the rise of the sewing machine. The Civil War motivated the mass production of “off-the-rack” menswear for the military. That industry segment grew rapidly in the late 19th century. It was not until the early 20th century that the factory production of women’s clothing took off, as women took a more active role outside the home. Fashionable clothing and cosmetics became important parts of our culture.
The apparel industry has always been fragmented: there has never been a “big three” or other oligopoly as found in most “heavy” industries like automobiles and aircraft. Nevertheless, nationally known brand names evolved, including Cluett-Peabody’s Arrow shirts, PVH Corporation’s Van Heusen shirts, Johnathan Logan and Leslie Fay dresses, and Levi Strauss’s denim blue jeans. Beneath those garments were products carrying such brands as Playtex, Maidenform, Hanes, Fruit of the Loom, and Munsingwear.
In the midst of all those brands, the one company that has persisted, stayed strong, and today leads the industry is the VF Corporation.
Our studies of “great companies” tells us that most great companies do one thing, do it well, and continue to do it for decades. UPS, Sherwin-Williams, Otis elevators, John Deere, and Procter & Gamble are good examples. Yet some companies continually “pivot,” to use the current buzzword. We have told the story of Brunswick, which for over one hundred years has bounced from one recreational boom to the next (billiards, then bowling, then boats).
VF Corporation first rose to prominence with Vanity Fair intimate apparel. The company created the first major “outlet shopping center” at its Reading, Pennsylvania, factory. The company then used those profits to buy the Lee, Rustler, and Wrangler brands of blue jeans, rising to the top in that field and in the process renaming itself VF Corporation. As those businesses matured, VF moved into active and outdoor apparel and accessories, ultimately selling off both the intimate apparel and blue jeans operations.
VF also transitioned from being an American manufacturing company to a global branding and marketing machine, buying all its products from over 200 contract manufacturers around the world. While VF no longer operates the outlet complex in Reading, the company has over 1,300 retail stores and almost 3,000 licensed stores on every continent.
The story of VF reflects the saga of the American apparel and textile industries. As the apparel industry globalized, it became impossible for American factories to compete with lower cost manufacturers in Asia and Latin America. This evolution resulted in the closure of many U.S. plants and the loss of thousands of jobs. Many textile and apparel companies were not able to navigate these enormous changes. On the other hand, some companies at least preserved their brands, figured out how to evolve and survive, and protected the interests of their shareholders. Few have been more successful at this than VF Corporation.
The Early Years
In 1899, a group of investors led by brewer and banker John Barbey founded the Reading Glove and Mitten Manufacturing Company in Reading, Pennsylvania. In 1911, Barbey bought out his partners. His son J.E. soon joined the firm and in 1913 the company was renamed Schuylkill Silk Mills. They began making silk lingerie and held a contest to name the brand. The winner got $25 for the name Vanity Fair.
Most lingerie was sold without a brand at the time, but Barbey and his son advertised the quality of their products and created one of the first true brands in the industry. Their efforts were so successful that in 1919 they again renamed the company Vanity Fair Silk Mills. In part in order to avoid being unionized, the firm opened its first southern plant in Alabama in 1937. In 1948 the original Reading factory was closed, though the company headquarters remained in nearby Wyomissing.
In this era, Vanity Fair switched to the stronger, more elastic nylon for its products, dropping the word “Silk” from the company name in 1942. Vanity Fair continued to innovate its products and won design awards. In 1951 the Barbey’s sold about one-third of the company’s stock to the public in an Initial Public Offering (IPO). J.E. Barbey (the son) died in 1956 and by 1966 his estate had sold off most of their ownership in the company. 1958 witnessed the company’s first international efforts, when they licensed the Vanity Fair brand to an English manufacturer.
The First Big Shift: 1969
Vanity Fair made two big acquisitions in 1969. One was the H.D. Lee Company of Salina, Kansas, which dated from 1889. Known for its Lee Rider and Tighter Rider “cowboy pants,” Lee jeans were known for their durability and fit.
The second major purchase was Berkshire International, the former Berkshire Knitting Mills Company, also based in Reading. It appears that his company may have been started around 1900 by the same men who had helped found Reading Glove and Mitten and were later bought out by the Barbey family. Berkshire had a long history of making both knitting machines and hosiery, of which it was the world’s largest manufacturer. With the purchase of Berkshire, Vanity Fair acquired substantial factories in Reading.
With these new operations, Vanity Fair became VF Corporation in 1969.
As a way to clear some excess inventory, VF had a one-day sale in one of the old Berkshire factory buildings. The sale was so successful that VF opened an outlet store on a permanent basis. Continually expanding the store, Reading soon became known as “the outlet capital of America.” On Saturdays in the holiday season, as many as 300 buses full of shoppers arrived at the VF Outlets. People drove from as far away as Georgia to take advantage of the bargains.
By controlling expenses and investing in new machinery, VF became more profitable than the other two big makers of jeans, Levi Strauss and Blue Bell. VF also led in innovation, introducing stretch jeans for women and the first successful brand of women’s jeans, Ms. Lee. The company also continued to develop new intimate apparel products.
Taking the Lead in Jeans
Blue Bell, founded in 1904 in Greensboro, North Carolina, did not fare as well, despite developing the highly successful Wrangler brand in 1947. In 1986, VF acquired the troubled Blue Bell company for $762 million, propelling VF to the top of the jeans heap. Blue jeans soon made up the majority of VF’s sales and profits.
In 1983, the company crossed the one-billion-dollar annual sales mark, and four years later, with Blue Bell in the fold, reached two billion.
Throughout this period, VF continued to consolidate other apparel brands, including Vassarette intimate apparel, Healthtex children’s wear, JanSport backpacks, and Jantzen swimwear. The 1990s saw a significant expansion in Europe with the purchase of French and Spanish apparel makers.
Revenues reached five billion dollars in 1995. At the same time, less expensive apparel made in Asia began to enter the market, and VF gradually closed many of their American manufacturing plants.
The company moved its headquarters from the Reading area (Wyomissing, PA) to Greensboro, NC, to be closer to the remaining factories in 1997.
Also in 1997, VF added the Maidenform brand to its intimate apparel lines. The next year, VF purchased Bestform, maker of Lily of France and Oscar de la Renta intimate apparel. With its multi-brand portfolio, VF did a billion dollars a year in intimate apparel, making it one of the “big three” American manufacturers (the other two were likely Playtex and Warnaco).
More Evolution in 2000
In 2000, VF bought Eastpak backpacks, Chic and Gitano jeans, and North Face, a maker of outerwear and high-tech sporting gear. Gitano was bought from Fruit of the Loom, then in bankruptcy but later bought by Warren Buffett’s Berkshire Hathaway Corporation. (Berkshire Hathaway began as a textile maker in Massachusetts in 1889 but evolved to become Buffett’s vehicle for acquisitions rather than a textile company. There was no relation between Buffett’s Berkshire and the Reading company described previously.) North Face was also in financial trouble at the time VF bought them. Thus both deals may have seemed risky at the time.
Massive Changes in the 21st Century
VF continued to buy and sell brands and control costs as it dealt with the increasingly globalized competitive situation. In 1995, 80% of VF’s products were made in the USA. By 2002, that percent was down to 10%.
Between 2003 and 2005, VF acquired the Nautica, Kipling, Napapijri, and Reef brands, increasing the company’s participation in recreational and outdoor products. But the most important transaction was the 2004 purchase of Vans for $396 million. Vans, founded in California in 1966 as the Van Doren Rubber Company, made VF a footwear manufacturer, and brought VF into the realms of snowboarding and BMX bike racing.
In 2007, VF sold its big intimate apparel business for $350 million to, of all people, Warren Buffett and his Berkshire Hathaway. This business was folded into his Fruit of the Loom operation, which includes Russell t-shirts and sports apparel, Brooks Running shoes, and Spalding sporting goods and apparel. VF thus exited its original, core business, focusing on greater growth opportunities.
2011 saw the acquisition of the prominent Timberland brand, moving VF more heavily into footwear and solidifying the company’s position in the outdoor apparel business.
VF purchased the well-known Dickies workwear brand in 2017.
In 2019, in its biggest transaction yet, VF spun off its jeans businesses (but not Dickies) as a new, public company, Kontoor Brands. Kontoor headquarters remained in Greensboro. As of this writing, Kontoor is valued at $2.8 billion (market capitalization) and produces annual revenues of about $2.5 billion.
With its transition to a company focused on “active wear” and outdoor products, VF moved its headquarters from Greensboro to Denver, Colorado, in 2019.
After many acquisitions and an equal number of sales and spinoffs, today VF Corporation is a completely different enterprise, although still dedicated to apparel and other textile products. In its most recently concluded fiscal year, VF generated sales exceeding $9 billion, balanced between “Active wear” and “outdoor.” North Face’s sales are booming, supported by strength in Vans, Dickies, Timberland, and other brands.
Production is outsourced to over 200 different suppliers around the globe. More than 1,300 retail stores are operated by the company on every continent, along with almost 3,000 licensed outlets which specialize in VF’s brands. The company focuses on product design, distribution, and marketing. Massive supply hubs around the globe are led by facilities in Panama and Hong Kong (soon to move to Singapore). Online and international sales are rising.
And so, from bras and girdles, to dungarees and denim, and then on to backpacks, shoes, and “active wear,” this very flexible company has not only survived but prospered in an industry that has been the graveyard for many competitors.
American Business History Center