VF Corp. Lays Off About 500 Under Reinvent Turnaround Plan
Editor’s note: We are told that the layoffs at Vans included several director and vice president level positions.
“As part of VF’s new Reinvent strategy, and with the aim of improving operational efficiency, we have eliminated approximately 500 salaried positions across the company globally,” the company said in a statement provided to SES on Wednesday. “While these decisions are never easy, they will give us the financial flexibility to invest behind our brands and better position us for long-term growth. We’re committed to handling this restructuring with dignity and respect for all involved and want to thank those impacted for their valued contributions to VF.”
A spokesperson confirmed the reductions are global and impact all brands, corporate functions, and geographies.
A spokesperson for Vans declined to comment on the layoffs’ impact to the brand beyond the statement issued by corporate.
New CEO Bracken Darrell Pushes Change
In October, the company revealed a turnaround strategy called Reinvent that moved Kevin Bailey from Vans global brand president to focusing on leading the new business improvement plan. The decision placed Darrell in what the company called a “more active role” at Vans until a new brand president is hired.
Reinvent also retooled the corporate structure with the creation of an Americas regional division similar to what VF has with its EMEA and APAC businesses.
Debt and leverage reduction were also cited as focus areas under Reinvent, in addition to about $300 million in cost savings.
VF has faced pressure from activist investors this year that have been critical of how the company’s been operating.
Newport Beach-based Engaged Capital LLC released a presentation in October that accused former VF President and CEO Steve Rendle of allowing costs to mount under a bloated corporate structure as the firm called for the company to divest non-core assets. Engaged also called out the company’s $2.1 billion acquisition of Supreme in 2020 saying the deal was part of a “flawed strategy” that amassed debt on the balance sheet.
Legion Partners Asset Management has also reportedly been pressuring VF to cut brands from its portfolio, including Timberland, according to an October Bloomberg report.
Earlier this year, the company placed its Packs business on the sales block. The division consists of the JanSport, EastPak, and Kipling brands.
Vans Sales Declines Hurting VF Results
VF in the quarter ended Sept. 30 reported revenue of $3.03 billion, down 4% in constant currency. The company’s net loss totaled $450.7 million, compared to $118.4 million net loss in the year-ago period, with the widening partially attributed to the ruling on a tax case stemming from the acquisition of Timberland.
The Americas business dragged down the company’s performance in the quarter, with sales falling 11% to $1.57 billion.
Vans revenue in the quarter slipped 23% in constant currency to $748.8 million.
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