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EXHIBIT 99.1
News Release
V.F. CORPORATION
FOR IMMEDIATE RELEASE
VF Announces Actions to Improve Future Profitability & Achieve Long-term
Growth Targets
NOVEMBER 17, 2000 - GREENSBORO, NORTH CAROLINA -- VF CORPORATION (NYSE: VFC),
the world's largest apparel company, announced today a series of actions to
position the Company to achieve its long-term earnings growth target of 8%-10%.
In conjunction with these actions, the Company will take a charge to fourth
quarter earnings of approximately $120 to $140 million, or $.68 to $.79 per
share. The cash requirement related to these actions is approximately $40
million. "Now is the time to take a hard look at our portfolio of businesses and
our operations and determine the optimal mix for the future," said Mackey
McDonald, President and Chief Executive Officer. "At the same time, we are
continuing to identify additional ways to improve our overall cost structure.
This has always been an active and continual process within VF, which has kept
us financially and operationally strong for over 100 years." He indicated that
the charge should benefit earnings by an annualized amount of approximately $45
million, allowing the Company to hit its growth target in 2001 despite a flat
pricing environment and inflationary cost increases.
The Company's businesses continue to perform on plan for the fourth quarter,
with the exception of workwear which continues to be challenged by integration
issues. As a result of these issues, excluding charges, VF expects to report
full year earnings per share between $2.95 and $3.00. Following are some of the
specific actions the Company is taking to improve profitability in
underperforming units and further reduce costs across our businesses:
o EXIT OF NONSTRATEGIC WORKWEAR BUSINESSES. Following an analysis of its
workwear operations, the Company has decided to discontinue several of the
more complex pieces of businesses acquired in 1998 and 1999 that have
impacted profitability. Accounting for approximately $40 million in sales,
the discontinued businesses include napery and certain customized and
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catalog programs serving primarily small businesses. "These actions will
greatly reduce the complexity of our workwear business, allowing us to
focus on more profitable, higher volume opportunities," Mr. McDonald said.
Expenses associated with this initiative include severance, capacity
reductions and disposal of inventories related to these businesses.
o NEW JEANS STRATEGY IN JAPAN. To combat changing market conditions in Japan
and unite the management of its Wrangler and Lee brands under a single
entity, VF has agreed to transfer the license for the Wrangler brand to Lee
Japan Co. Ltd., a subsidiary of Tokyo-based Edwin Co. Ltd. A leader in the
Japanese jeans market, Edwin has successfully marketed the Lee brand in
Japan under a licensing agreement since 1987. "The exceptional local market
knowledge, retail relationships and brand management expertise within Lee
Japan provide a strong platform that will now be leveraged across both our
Lee and Wrangler brands," said Mr. McDonald. "This `total portfolio'
approach to brand management is consistent with our strategy in both the
U.S. and Europe." The transfer of the Wrangler license will result in a
charge reflecting a loss of the Company's investment in VF Japan, which is
primarily the write-off of goodwill. VF's sales of Wrangler in Japan are
approximately $60 million.
-MORE-
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VF Announces Actions...
o ADDITIONAL COST SAVING ACTIONS. Other actions the Company is taking to
reduce costs include the consolidation of several distribution centers in
both the U.S. and Europe; a general reorganization of its Latin American
jeans business; and a restructuring of its international intimates business
to improve the profitability of its hypermarket, or discount store,
operations.
"We will be finalizing our plans in these and other areas in the coming weeks,
but are committed to taking aggressive actions that will get VF on track to
achieve earnings growth in 2001 that is more in line with our long-term target.
Our performance next year should reflect not only these actions, but
improvements in the profitability of the acquisitions made this year, healthy
performance in our core businesses and the continuation of our share repurchase
program," Mr. McDonald concluded.
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Cautionary Statement on Forward-looking Statements
Certain statements included herein are "forward-looking statements" within the
meaning of the federal securities laws. Management cautions that forward-looking
statements are not guarantees and that actual results could differ materially
from those expressed or implied in the forward-looking statements. Important
factors that could cause the actual results of operations or financial condition
of the Company to differ include, but are not necessarily limited to, the
overall level of consumer spending for apparel; changes in trends in the
segments of the market in which the Company competes; the financial strength of
the retail industry; actions of competitors that may impact the Company's
business; and the impact of unforeseen economic changes in the markets where the
Company competes, such as changes in interest rates, currency exchange rates,
inflation rates, recession, and other external economic and political factors
over which the Company has no control. Investors are also directed to consider
the risks and uncertainties discussed in documents filed by the Company with the
Securities and Exchange Commission.
VF Corporation is the world's largest apparel company and a leader in jeanswear,
intimate apparel, knitwear, workwear, playwear, daypacks and swimwear. Its
principal brands include Lee, Wrangler, Riders, Rustler, CHIC, Gitano, Vanity
Fair, Vassarette, Bestform, Lily of France, Lee Sport, Healthtex, Jantzen,
JanSport, Eastpak, Red Kap and The North Face.
VF Corporation's press releases, annual report and other information can be
accessed through the Company's home page on the World Wide Web,
http://www.vfc.com.
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