Open a large transparent image 600x600

Using you Ellipse tool set to Circle draw out a large circle in your image.

Add a new raster layer and select your text tool

The font I used was Agency Fb size 30.
You could use any font really for this, nothing to fancy tho.

The colour I uses was faf4du, but the colour is up to you, most people use black.

Move your cursor over the circle at the top until you see the curved line  apppear

under the "A" on the text cross hair.

Type the letter V and continue until you have V's all the way round your circle.

Convert to raster layer

You can now delete the circle layer.

Because I used a lighter colour for the stitches I added a Texture Effect.

Effects. Texture Effect, Fine Leather

I've added a small drop shadow

Horizontal and Vertical set at 1, Opacity set at 25, Blur set at 2

Re apply the drop shadow

All done!