VF Corp.’s jeanswear coalition and an IT services unit have eliminated a “small” number of white-collar positions in the company’s Greensboro, N.C., headquarters and its offices in Merriam, Kan., where the firm’s Lee brand is based.
VF declined to divulge the exact number of employees laid off, but said some of the affected personnel learned the news last week and others earlier this week. In a statement, the $7.22 billion company noted, “Although VF is strong financially and our business and brands are healthy, the external environment is extremely difficult and expected to remain so for 2009. Like many other companies, several of our business units are responding by taking action to reduce costs. These moves, while extremely difficult, are aimed at reducing operating expenses to better position us for success in the coming year and beyond.”
In October, VF cut fourth-quarter guidance to revenue growth of 3 to 4 percent with a 1 to 5 percent gain in earnings per share, down from previous estimates of 8 percent revenue growth and 20 percent EPS growth. Even with the lowered guidance, VF is on track to post record sales and earnings results this year.
However, VF’s jeanswear business, which includes Lee, Wrangler and Rider, has been a trouble spot for the company this year, with sales declining 2 percent to $743.2 million in the third quarter ended Sept. 30. During the period, domestic jeanswear revenues declined 3 percent, with the mass market business flat and the Lee and Western specialty businesses declining due to a very challenging retail environment, retailers lowering their inventory levels and consumers moving to lower price points, including private label products.
Jeanswear coalition profit decreased 9.5 percent in the quarter, to $122.9 million, with operating margins declining to 16.5 percent, down from 17.9 percent in the year-ago quarter. For the first nine months of the year, jeanswear profits are off 11.8 percent to $323.5 million as revenues declined 3.4 percent to $2.1 billion.
According to a VF spokesman, there are no company-wide plans for further layoffs, but individual brands and business segments will assess their human resources requirements on an ongoing basis.