VF Corp., owner of North Face, withdraws future predictions and eliminates Vans president.

VF Corp., the company that owns North Face, has decided to withdraw its guidance for the current fiscal year and has also made the announcement that it will be appointing a new president for the Vans brand. This decision comes as a response to the concerns of Wall Street, where two investor groups have been pushing for changes at the apparel and footwear conglomerate. VF Corp. has come up with a strategic transformation plan in order to enhance performance in North America, lower costs, reduce debt, and overhaul the Vans brand.

After the fiscal second quarter ended on Sept. 30, Vans' revenue saw a 21% drop compared to the previous year. If you overlook Vans, sales in the Americas witnessed an 11% decrease. Following the news, VF Corp. shares dropped as much as 18% and the stock has given away 38% this year up to Monday's closing. The company predicts that the performance of footwear brands won't see any progress in the second half of the fiscal year that ends in March. Kevin Bailey, the previous head of Vans, will step down from his position and the role will be temporarily occupied by Chief Executive Officer Bracken Darrell, whilst the company looks for a suitable external replacement.

As VF Corp. fails to meet expectations, both Engaged Capital and Legion Partners Asset Management have decided to invest. Engaged Capital has suggested that VF Corp. should divest itself of some brands and focus on reducing debt. "Despite showing signs of satisfactory performance during the first half and witnessing solid profit margins in the second quarter, we are still falling short at Vans, and in the US market," stated Chief Financial Officer Matt Puckett.

The company has revised its predictions for the fiscal year and now aspires for a free cash flow of around $600 million. This is a substantial dip from its former projection of $900 million. Alongside Vans, other brands under VF Corp.'s roof are also expected to contribute to this decline; VF Corp. puts it down to a tougher US wholesale environment. The corporation's new strategy will inevitably incur costs that consist of both cash and non-cash items. The North Face turned out to be the highest selling brand in the recent quarter according to sales data, followed by Vans and Timberland.