VF Corp announces transformation plan to turn around poor performance

Apparel and footwear company VF Corporation has posted a 2 per cent drop in revenue to $3 billion for the second quarter ended September 30, driven by sales declines in most of its major brands.

Vans’ revenue plummeted 21 per cent to US$700 million, while Timberland and Dickies also saw declines of 7 per cent and 8 per cent, respectively.

The decrease was partially offset by the good performance of The North Face, whose revenue went up 19 per cent to $1.1 billion.

By region, sales were down 11 per cent in the Americas, but up 2 per cent and 14 per cent in Asia-Pacific and EMEA, respectively. VF’s wholesale edged down 1 per cent, and direct-to-consumer also dropped 3 per cent.

To improve operating performance, the company introduced Reinvent, a transformation program focusing on brand-building.

The program covers our key priorities – improving North America results, delivering the Vans turnaround, reducing costs, and strengthening the balance sheet.

“In my first 100 days, as I have spent time with our brands, teams, and customers around the world, I have developed even stronger conviction in the company’s significant potential, which is far greater than what we are delivering today,” said Bracken Darrell, president and CEO of VF Corporation.

Darrell expects Reinvent to bring long-term benefits by helping the company improve near-term performance, return to growth, and generate shareholder value.

Reinvent will be headed by Kevin Bailey, who is stepping down as global brand president of Vans. Darrell will assume a more active role in leading Vans and delivering its turnaround strategies while a search continues for a new Vans leader.

The company withdraws its previous FY24 revenue and earnings guidance and projects free cash flow of $600 million.

Vans’ performance is not likely to improve in the second half of the year amid a more difficult US wholesale environment, the firm added.

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