VF Corp. prepares to lay off 600 people
“I remain impressed by our staff, whose passion, perseverance and execution continue to drive our success.” This statement, made at the end of July by Steve Rendle, CEO of VF Corp., when the US group presented its Q1 2022-23 results, did in no way foreshadow the decision Rendle took in September.
Last week, the staff of the US apparel giant, owner of Vans, The North Face, Timberland, Dickies and Supreme, received a letter from Rendle announcing that 600 office-based jobs will be cut, according to a rumour picked up by a local newspaper, the Denver Business Journal. The newspaper reported that 300 of those jobs relate to currently filled positions, and the other 300 are positions that have been opened by the HR department. As VF Corp. has some 35,000 employees worldwide, the job cuts would affect 1.7% of its total workforce.
Contacted by FashionNetwork.com, VF Corp. stated: “We can say that there was no disproportionate impact on a specific site or region. The impact in the EMEA region is no greater than the average organic staff turnover in the course of one year. Cutting jobs is a decision we never take lightly, but we believe it is a necessary step in order to align our staff and capabilities with our highest strategic priorities.”
In the last quarter, closed on July 2, VF Corp.’s sales rose by 3% to $2.262 billion (a 7% increase in local currency). However, the group fell well short of its pre-crisis performance, when its quarterly sales were $2.583 billion. The shortfall was chiefly due to weak trading in China, hampered by the spring lockdowns, which caused a 20% slump in sales compared to 2021-22 in the Asia-Pacific region. In the same period, sales for Vans dropped by 7% to $947 million, and those for Dickies dropped 15% to $170 million, while The North Face grew by 31% to $481 million, and Timberland by 8% to $269 million.
The group's direct-to-consumer sales, one of the mainstays of Rendle’s business strategy, fell by 7%, while wholesale revenue grew by 13%.
Nothing alarming, but both the group’s net income and operating income were as a result in the red. VF Corp.'s share price, which had been slipping since April, has plunged further this summer, since the quarterly results’ publication, dropping by nearly 45% on a yearly basis. A situation that may have prompted the senior management’s decision to cut jobs.
According to the Denver Business Journal, in his letter Rendle stated that the management had to take “a strategic and thoughtful approach to new roles going forward,” while the group must “consider its strategic priorities and the level of capabilities that are needed to support them.” He also wrote that “our overriding goal is to drive consistent growth across our full family of brands. Through clear and focused strategies, the passion and capabilities of our people, and the guidance provided by capable leaders, we will drive growth and chart the next chapter for VF,” Rendle added.
The group has not yet made any formal announcement on these topics. Its investor day, in which the senior management usually gives indications about the group’s plans, could be an opportunity for an update. It will take place on September 28, at VF Corp.’s headquarters in Denver, Colorado.
Copyright © 2022 FashionNetwork.com All rights reserved.