The struggling VF Corp. was already cutting back on costs — now the company might start cutting brands from its portfolio.
While VF did not detail which brands it might sell, the review could potentially put names like Supreme, Timberland and Dickies in play. VF also owns Vans, which it is working to turn around, and The North Face, which has been a stronger performer, but did suffer some with warmer weather this winter.
“Our third quarter top-line performance was disappointing,” said Bracken Darrell, president and chief executive officer.
Sales fell 16 percent to $3 billion, pressuring the bottom line. Net losses for the quarter tallied $42.5 million, or 11 cents a share, a big drop down from earnings of $507.9 million, or $1.31 a year earlier.
“However, we are confident the actions we are implementing as part of Reinvent [strategic plan] will enable VF to stabilize and then grow revenue and improve operational performance across brands and regions,” Darrell said. “We have already begun to see the impact of our efforts to right-size the company’s cost structure and improve its inventory position, resulting in stronger than expected cash flow and expanded gross margin in the quarter.”
This quarter starts “the beginning of the next phase of our transformation plan,” the CEO said, noting the company would be resetting Vans and reviewing the brand portfolio while “continuing to build the organization of the future.”
The company said it “has initiated an in-depth strategic review of the brand assets within the portfolio, in alignment with the board of directors, to ensure the company owns the brands that it believes create the greatest long-term value.”