VF Outdoor LLC, a subsidiary of VF Corp., issued a Worker Adjustment and Retraining Notification, also called a WARN notice, on Nov. 15 for the employees of a distribution center the company is closing in Martinsville, Virginia.
VF said in May that it planned to close the 500,000-square-foot facility, which was built in 2001, but at that time the extent of the layoffs was unclear. The closure is expected to take place in March 2025, per Virginia Business.
The layoffs will affect 242 employees by Jan. 19, 2025, per the WARN notice, and are the result of the distribution center closure.
A spokesperson representing the Service Employees International Union confirmed the layoffs.
“The Union negotiated a severance package,” the representative said in an email, adding that any further information on the closing or where the work went would need to come directly from the company.
In an emailed statement, a VF spokesperson said that as part of VF’s Reinvent strategy, the company has evaluated how it’s shipping products to best serve its customers, adding that in May, VF “made the difficult decision” to close the Martinsville facility.
“This transition will deliver operational efficiencies, consolidate our operations, and reduce real estate costs,” the spokesperson said. “The biggest impact and focus for us in this transition is our VF associates. As a result, our product will now be shipped from our Ontario, CA distribution center and a third-party logistics provider instead of Martinsville.”
The Martinsville distribution center will continue to operate as it currently does through March 2025, and the VF spokesperson said the company planned to support the team there through the final days of operations.
“The entire VF organization extends its deepest gratitude and appreciation to our teammates who work within the facility for their steadfast dedication and commitment for over the last two decades,” the spokesperson said
The WARN notice comes on the heels of an S&P statement downgrading VF from its previous score of “BBB-” to “BB.” The slip categorizes VF as “less vulnerable in the near-term” but facing “major ongoing uncertainties to adverse business, financial and economic conditions.”
David Swartz, a senior equity analyst at Morningstar Research Services, said that VF has been struggling and is cutting costs, and the company discussed taking costs out of its supply chain at the recent analyst event.
“VF doesn’t have the same kind of growth that it once did so it makes sense that it may have some excess capacity,” Swartz said in emailed comments. “It’s also likely that VF doesn’t need/want to invest in new tech in all its centers. It may also be moving towards more of a third-party warehouse model.”
While Swartz said he didn't know the details of this specific warehouse closure, the company had several others, including the new distribution center that launched operations last year in California.
“It doesn’t support the East Coast, but it makes sense that VF isn’t going to make these investments in every center,” Swartz said.
In October 2023, VF announced Project Reinvent, a strategic transformation program designed in part to help VF deliver $300 million in fixed cost savings by removing spending in “non-strategic areas of the business,” right-sizing its structure, reducing debt and deleveraging its balance sheet.
The company’s Q2 earnings, released last month, showed a year over year 6% revenue decline, with revenue drops at its largest brands, including Vans, The North Face, Timberland and Dickies.
