Oct 31, 2023
North Face parent company VF Corp. reduced prices at two of its biggest brands this year — the latest sign that apparel and footwear companies are retrenching as the cost increases of recent years start to moderate.
“Inflation’s come down a little bit, we’re not in the environment we were last year at this time,” VF Chief Executive Officer Bracken Darrell said in an interview. The company brought prices for some Timberland boots to below $200, he said, and some Vans products also got price reductions.
Vans and Timberland generated $749 million and $489 million of sales, respectively, in the quarter ended Sept. 30. The North Face was VF’s top performer, with $1.1 billion of sales in the period.
Last month, apparel prices across categories fell by the most since the immediate onset of the pandemic, according to the latest data from the Bureau of Labor Statistics. Levi Strauss & Co. said in July that it would lower prices on some of its lower-priced denim in the latter part of the year.
VF Corp., which has been the target of two activist investor groups, has been struggling with softer sales, particularly at the Vans brand. Darrell said he has spoken to many investors since he started the CEO role in July, including one of the activist groups.
Revenue at Vans fell 21% in the most recent quarter, and the company said Monday that it launched an external search to replace the president of the brand. Following the declines of the early pandemic, sales growth at Vans accelerated in late 2021 and early 2022 before tapering off and turning into declines through the most recent quarter.
“It’s always a little dangerous when you don’t know why you grew so fast,” Darrell said of Vans. “We just need to get an innovation engine that’s built for today.”
He said that could be obtained by returning to the brands’ roots while also offering new products.
VF also announced a new transformation plan that includes debt reduction and $300 million of cost savings. VF is still looking to sell its backpacks business, and the company won’t pursue new brand acquisitions until the debt levels are lowered, Darrell said.