The closure of a Virginia plant has resulted in hundreds of layoffs, according to a Worker Adjustment and Retraining Notification letter.
On November 15, VF Outdoor LLC, a subsidiary of VF Corp., filed a Worker Adjustment and Retraining Notification (WARN) announcing the closing of its distribution center in Martinsville, Virginia.
This facility, which covers 500,000 square feet and opened in 2001, is scheduled to close in March 2025.
VF Corp. announced plans to close the Martinsville center in May, but the specifics of the layoffs were not publicized at the time.
According to the WARN notice, the closure will affect 242 employees on January 19, 2025.
A spokesperson of the Service Employees International Union confirmed the layoffs, saying the union had negotiated a severance payment.
Additional information about the closure and possible job relocation was reported to be accessible solely from the company.
According to a VF representative, the decision to shut down the Martinsville site is part of the company’s Reinvent strategy.
This method seeks to improve product shipping to better serve customers.
The spokesman stated that shipment will now be handled by the Ontario, California distribution center and a third-party logistics partner.
Its Martinsville facility will remain open until March 2025, and VF Corp. plans to help its employees during the transition.
The spokesperson thanked the facility’s workers for their efforts, stressing their commitment over the last two decades.
The WARN notification follows S&P’s recent downgrade, which reduced VF’s rating from “BBB-” to “BB.”
This downgrading suggests that, while the company is less vulnerable in the medium term, it will encounter major challenges as a result of bad business and economic conditions.
David Swartz, a senior equities analyst at Morningstar Research Services, stated that VF is struggling and cutting costs, with discussions about restructuring operations taking place during a recent analyst event.
Swartz stated that VF’s slower growth justified the closure of specific locations, implying that the business may decide not to invest in new technology across all centers.
He also noted that the corporation has created a new distribution hub in California, which does not serve the East Coast.
In October 2023, VF began Project Reinvent, a strategic program intended to save $300 million in fixed costs by cutting non-essential spending, reorganizing, and reducing debt.
VF’s most recent Q2 earnings report showed a 6% year-over-year revenue decline, with all major brands reporting revenue drops, including Vans, The North Face, Timberland, and Dickies.
