VF Corp. joined the long line of fashion companies warning that a coronavirus-driven sales slowdown is going to land on their financial statements.
The company, parent to Vans, Timberland and The North Face, said about 60 percent of owned and partner stores have closed temporarily in China, where officials are taking increasingly drastic steps to curtail the outbreak.
And the stores that are open are seeing “significant declines in retail traffic.”
Last year, the Asia-Pacific region accounted for about 12 percent of the company’s business, while China amounted to 6 percent overall.
“While it is not possible to gauge the impact to our supply chain at this point, approximately 16 percent of VF’s total cost of goods sold is sourced directly from mainland China, of which 7 percent is bound for the U.S. market,” the company said.
Steve Rendle, chairman, president and chief executive officer, said: “The safety and well-being of our associates and partners in China is our highest priority. Our thoughts are with those people affected by the coronavirus. While the coronavirus will impact our financial results in the Asia-Pacific region in the near term, VF’s growth opportunity in China and across the Asia-Pacific region is significant and the fundamentals of our business are strong. VF is well positioned to navigate the impact of the coronavirus situation given the diversity of our business and operating model in other key geographies.”
The company plans to update investors on the impact of the virus with fourth-quarter results in May.