A Virginia plant has shut down, leading to significant job losses as detailed in a Worker Adjustment and Retraining Notification letter.
On November 15, VF Outdoor LLC, part of VF Corp., submitted a Worker Adjustment and Retraining Notification (WARN) regarding the impending closure of its distribution center located in Martinsville, Virginia.
The 500,000-square-foot facility, which began operations in 2001, is set to shut down in March 2025.
VF Corp. revealed intentions to shut down the Martinsville center in May, yet details regarding the layoffs were not disclosed at that moment.
The WARN notice indicates that 242 employees will be impacted by the closure on January 19, 2025.
A representative from the Service Employees International Union has verified the layoffs, stating that the union successfully negotiated a severance payment.
Details regarding the shutdown and potential job transfers were said to be available exclusively from the organization.
A representative from VF stated that the closure of the Martinsville site aligns with the company’s Reinvent strategy. This approach aims to enhance the efficiency of product delivery to better meet customer needs.
The representative announced that the distribution will now be managed by the facility in Ontario, California, along with a third-party logistics provider.
The Martinsville facility is set to continue operations until March 2025, with VF Corp. committed to supporting its employees throughout the transition period.
The representative expressed gratitude to the staff at the facility for their dedication, highlighting their unwavering commitment throughout the past twenty years.
The recent WARN notification comes in the wake of S&P’s downgrade, which has lowered VF’s rating from “BBB-” to “BB.”
This downgrade indicates that, although the company may be more resilient in the near future, it will face significant obstacles due to poor business practices and economic circumstances.
David Swartz, a senior equities analyst at Morningstar Research Services, noted that VF is facing challenges and implementing cost-cutting measures, with talks of restructuring operations occurring at a recent analyst event.
Swartz indicated that the gradual expansion of VF warranted the shutdown of certain sites, suggesting that the company might opt against investing in new technology at every location.
The corporation has established a new distribution hub in California, which does not cater to the East Coast.
In October 2023, VF launched an initiative called Project Reinvent, aimed at achieving $300 million in savings by streamlining expenses, restructuring operations, and lowering debt levels.
VF’s latest quarterly earnings reveal a 6% decrease in revenue compared to the previous year, with all key brands experiencing declines, such as Vans, The North Face, Timberland, and Dickies.