Losses Widen At VF Corporation

VF Corporation CEO Bracken Darrell said they are on track to deliver cost savings and return to growth after recently reporting an operating loss of $240 million for the 3 months ending June 2024.

When VF Corporation purchased Supreme back in 2020 everyone from business analysists to die hard streetwear fans could see the massive potential of the sale. Sitting alongside other iconic streetwear brands such as Vans, Timberland & The North Face, which Supreme had already collaborated with on numerous occasions. However, 4 years later and the move didn’t meet VF’s original expectations with a falling demand for Supreme’s red box logo and shares prices in VF dropping 13%. After negotiating a sale with EssilorLuxottica For $1.5 Billion, VF shares were up by 14% but there’s sill a long way to, it seems, for the US based apparel & footwear company to return to growth. For the 3 months ending June 2024, VF Corporation recently reported an operating loss of $240 million.

Although the decline was less severe than the 13% drop in Q4 2023, there’s still issues around current trends and desirability of the VF owned brands. Vans for example will always have its core consumer, however the brand has struggled to compete with the current 3 stripes wave of the adidas Samba for example across various demographics. With a 21% decline in sales for the iconic skateboard brand at VF, VF analysists are surely preying for  a revival like we saw back in the twenty tens. The North Face sales were down also by 2% for the third consecutive quarter. What was previously an absolute powerhouse on the performance outdoors & streetwear scene has been switched for brands like And Wander & Arc’Teryx, combined with a cost of living crisis, high inflation, overly cautious consumers and economic downturns across the US, UK & Europe. In a tougher global market than ever before trend analysis remains key to balancing out the books and global success. But regardless of how tight a lot of people’s purses are right now, brands like The North Face will always reign Supreme, with or without Supreme.

While the business is still down, the rate of decline moderated quarter-over-quarter versus Q4 and across almost all our brands. We advanced further on the Reinvent transformation plan. We are on track to deliver our targeted cost savings and we have addressed one of our top financial priorities to strengthen the balance sheet with the announced sale of Supreme. Together with the first-class leadership team I have built, we are confident we will continue to make progress to return to growth and drive strong, sustainable value creation at VF.

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Bracken Darrel, CEO VF Corporation