VF closes more than half its stores in China in response to coronavirus outbreak
The parent company of The North Face, Timberland, Vans and Dickies is facing a sales slowdown in China.
VF Corp. said that 60% of its owned and partner stores in China have been temporarily closed due to the coronavirus outbreak. The stores that remain open have experienced “significant declines in retail traffic,” the company said.
The Asia Pacific region and mainland China represented 12% and 6%, respectively, of VF’s total revenue in 2019. The company said that it it not possible to gauge the impact of the virus to its supply chain “at this point,” but noted that approximately 16% of VF’s total cost of goods sold is sourced directly from mainland China, of which 7% is bound for the U.S. market.
“The safety and well-being of our associates and partners in China is our highest priority,” stated said Steve Rendle, VF’s chairman, president and CEO. “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.”