VF Corporation, the group that owns brands such as Vans and The North Face, sees its sales drop again. There is a bit of reason for optimism as losses are lower than expected and there is an uplift in China.
Strategic steps
VF Corporation’s revenue fell 9 % in the past first quarter to 1.9 billion dollars (1.7 billion euros). The company reported an adjusted loss per share of 33 cents, reducing gross margins by 80 basis points to 52 %. Still, losses were lower than analysts feared.
A major cause for optimism was the Chinese market, where sales (excluding currency effects) rose 4 % thanks to a better product range and newer styles. The group also managed to cut stock by almost a quarter. CEO Bracken Darrell, who has now been on board for a year, also took strategic steps by selling streetwear brand Supreme and implementing firm reorganisations, including at the European offices.
Sales were still down 3 % at The North Face, and even 21 % down at Vans. Like other fashion multinationals, VF Corp is feeling the effects of the political unrest in Bangladesh: some 15 % of production stems from the country, resulting in a number of supply disruptions.
