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VF Corp's The North Face Shifts Production from Türkiye Amidst Rising Costs U.S. apparel and footwear giant VF Corporation (NYSE: VFC), parent company of The North Face, is executing a significant strategic shift in its manufacturing operations. The company is relocating approximately 80% of The North Face's production from Türkiye to lower-cost hubs in Vietnam and Bangladesh, a move aimed at mitigating escalating manufacturing expenses. This decision is poised to impact its primary Turkish supplier, Gelisim Tekstil, and reflects a broader trend of supply chain re-optimization within the global apparel industry. Production Relocation Details The core of this strategic adjustment involves a drastic reduction in orders placed with Gelisim Tekstil, a long-standing Turkish supplier. Previously one of The North Face's largest global producers and its most significant within the European Union, Gelisim Tekstil is now expected to see its annual order value from The North Face plummet from approximately €30 million to between €4 million and €5 million. This substantial cutback means that out of an estimated 4 million pieces previously produced, only 400,000 to 500,000 pieces will remain with the Turkish manufacturer. Mustafa Akcay, chairman of Gelisim Tekstil's board of directors, confirmed the shift, stating, "Starting last year, they decided to go to Bangladesh and Vietnam. About 10%-20% of production will remain." Analysis of Cost Drivers in Türkiye The impetus for VF Corp's decision stems directly from a sharp rise in production costs within Türkiye. Over the past three years, the country has experienced a 302% surge in the minimum wage and a 290% climb in inflation. In contrast, the value of the U.S. dollar against the Turkish Lira increased by only 132% over the same period. This disparity has effectively more than doubled Turkish production expenses when calculated in dollar terms, making them uncompetitive on a global scale. Akcay elaborated on this challenge: > "In 2023, labour costs rose 110% while the exchange rate increased 50%. We tolerated the difference in yarn prices. But in subsequent years, labour costs remained well above the exchange rate, making us more expensive than even the EU." Vedat Yavuz, vice chairman of Gelisim Tekstil, affirmed that The North Face's relocation decision was "purely due to price," despite Gelisim Tekstil's established reputation for quality and timely delivery. Broader Context and Market Implications The ripple effects of this production shift extend beyond Gelisim Tekstil. The Turkish textile sector as a whole is grappling with a severe competitiveness crisis. Data from the Turkish Exporters Assembly (TIM) indicated a marginal decline of 0.6% in textile and raw materials sector exports to $9.5 billion in 2024, with ready-to-wear exports decreasing by 6.9% to $17.9 billion. The sector's cost-based competitiveness index plummeted to 86.15 in Q1 2025, marking its lowest level in a decade. Consequently, Turkish apparel products are now approximately 60% more expensive than those from East Asia and about 45% costlier than North African equivalents. This has led to substantial production losses, with the Turkish Clothing Manufacturers' Association (TGSD) reporting a $4.6 billion loss over two years and 1,270 companies closing in the first four months of 2024, resulting in 20,700 job losses. For Gelisim Tekstil, the immediate impact is a dramatic decrease in monthly capacity utilization, which has fallen from 1 million pieces in 2022 to just 400,000-500,000 pieces currently. The company, which currently employs 1,200 individuals, faces the prospect of halving its workforce, as articulated by Akcay: > "We currently have 1,200 employees. If things don't go as we hope, there may be employees we will part ways with. We will shrink. Starting from May next year, the number of employees may drop by half." The company's export revenue, which stood at $90 million in 2022, declined to $50-60 million in 2023 and is projected to remain at similar levels through 2025. Without new partnerships, Gelisim Tekstil anticipates a 50% contraction next year. From VF Corp's perspective, this move is integral to its broader "Reinvent" transformation program. The company aims to realize $300 million in annualized cost savings by mid-fiscal year 2025 and targets a medium-term net operating income expansion of $500 million to $600 million. The North Face brand has been identified as a key growth driver for VF Corp, demonstrating sustained positive momentum, including 6% growth in Q1 FY26 driven by Asia-Pacific demand and product innovation. The cost-cutting measures are expected to bolster the brand's profitability within VF Corp's portfolio. Looking Ahead The relocation by The North Face underscores a significant restructuring within global apparel supply chains. Major brands are increasingly prioritizing cost optimization and supply chain resilience, leading to a continuous re-evaluation of manufacturing footprints. For VF Corp, the shift is expected to contribute to improved profit margins and operational efficiency for The North Face, a critical brand in its portfolio. Conversely, the challenges for Türkiye's textile sector are likely to persist, particularly given the ongoing inflationary pressures and wage increases. The country's textile manufacturers will need to adapt by exploring new market opportunities, improving efficiency, or shifting towards higher-value production to counteract the exodus of cost-sensitive orders. The event also highlights a broader cautionary tale for emerging market producers regarding the impact of macroeconomic instability on global competitiveness.
VF Corp Divests Dickies Brand for $600 Million VF Corporation (NYSE:VFC), the global apparel and footwear company behind brands such as Vans, The North Face, and Timberland, announced an agreement to sell its Dickies workwear brand to Bluestar Alliance for $600 million in cash. Following the announcement, shares of VFC experienced a 2.9% decline in morning trading. Transaction Details and Strategic Context The transaction, anticipated to conclude by the end of 2025, is a significant component of VF Corp's ongoing "Reinvent" strategy. VF Corp initially acquired Dickies in 2017 for $820 million. However, the century-old workwear brand has encountered significant operational challenges and declining revenues in recent years. After a 19% revenue jump to $837.7 million in fiscal 2022, Dickies' sales slid 12% year-over-year to $542.1 million for the fiscal year ended March 29, 2025, contributing approximately 6% of VF Corp's total revenue. Bracken Darrell, VF Corp's CEO, articulated the strategic imperative behind the sale, stating, "This transaction will enable us to bring our net debt level down and will be accretive to our growth on a pro-forma basis." The proceeds from the sale are earmarked for reducing VF Corp's liabilities, which stood at $8.8 billion as of June 2025. This divestiture follows other recent asset sales, including Supreme in 2024 and Eagle Creek in 2021, as the company sharpens its focus on its higher-performing labels. Market Reaction and Debt Management Despite VF Corp's positive framing of the divestiture as a move to reduce debt and enhance financial flexibility, the market reacted with skepticism, as evidenced by the stock's decline. This sentiment suggests investors may harbor concerns regarding the immediate impact of the sale or the company's broader financial trajectory. VF Corp's debt levels remain a focal point for analysts. The company had already lowered its net debt by $1.4 billion, or 20%, compared to the prior year, yet its net debt is still projected to remain above $4 billion even after the Dickies sale. Management has prioritized debt reduction, aiming to achieve a net leverage ratio below 2.5x by fiscal year 2028. The $600 million cash infusion is expected to aid in addressing upcoming debt maturities, notably EUR500 million notes due in March 2026. Analyst Commentary and Outlook Analysts have offered varied perspectives on VF Corp's strategic maneuvers. Williams Trading reiterated a "Sell" rating on the stock following the announcement, reflecting persistent concerns, while Telsey Advisory Group maintained a "Market Perform" rating. In contrast, Baird upgraded VF Corp to "Outperform" in 2025, citing improved brand performance and favorable cost trends, indicating a divergence in expert opinion regarding the long-term efficacy of the company's turnaround efforts. VF Corp's shares have demonstrated significant volatility, experiencing 31 moves greater than 5% over the past year. The stock is down 33.8% since the beginning of the year, trading at $14.25 per share, which is 47.1% below its 52-week high of $26.93 observed in January 2025. This performance underscores the challenges the company faces in regaining investor confidence. Looking ahead, investors will closely monitor VF Corp's progress in debt reduction, its ability to achieve its leverage targets, and the continued turnaround efforts for Vans. The company has guided for 2Q26 revenue to decline by 4%-2% on an FX-neutral basis, with gross margin expected to remain approximately flat at around 52.2%. The successful execution of its portfolio optimization strategy and the revitalization of its core brands will be crucial for VF Corp's future financial health and stock performance.
Mr. Bracken Darrell is the President of VF Corp, joining the firm since 2023.
The current price of VFC is $14.44, it has increased 0.03% in the last trading day.
VF Corp belongs to Textiles, Apparel & Luxury Goods industry and the sector is Consumer Discretionary
VF Corp's current market cap is $5.6B
According to wall street analysts, 22 analysts have made analyst ratings for VF Corp, including 5 strong buy, 5 buy, 15 hold, 3 sell, and 5 strong sell
Looks like VFC is getting a reality check, anon. The stock is dropping today because the initial excitement from selling its Dickies brand for $600 million has faded, and a key analyst at Stifel decided to pour cold water on the party by downgrading the stock to Hold.
The price action for VFC is a classic "buy the rumor, sell the news" situation, with a mix of fundamental shifts and technical signals. Here’s the alpha:
The Main Catalyst: The Dickies Sale
The Reversal: Why It's Down Today
The Metrics Breakdown
So, while selling Dickies is a step in the right direction, the market seems to think it's not a magic bullet. Keep an eye on that $16.50 resistance level.
Honestly, instead of getting chopped up by analyst calls, you'd probably be better off tracking what the smart money is actually doing on the Edgen Radar.