VF to cut 13,000 jobs

November 14, 2001 Posted: 1756 GMT

NEW YORK (CNN/Money) -- The world's top jeans maker, VF Corp., is cutting 13,000 jobs, about 18 percent of its global work force, in a restructuring move designed to increase profitability.

VF (VFC: up $1.16 to $38.62, Research, Estimates) said Wednesday it will concentrate on its more successful jeans, intimate apparel and outdoor clothing units, which include brand names such as Lee, Wrangler, Eastpak and North Face, and exit its private label knitwear, swimwear and workwear businesses.

The moves are expected to save VF about $115 million annually.

The Greensboro, N.C.-based company said it is taking these actions in view of a long-term goal of 17 percent return on capital, including annual sales growth of 6 percent and operating margins of 14 percent.

VF said it will take a fourth-quarter charge of $280 million to $320 million, about $1.74 to $1.98 per share. The company also affirmed its fourth-quarter sales and earnings guidance.

Analysts surveyed by First Call are currently expecting fourth-quarter earnings per share of 49 cents, with revenues of $1.29 billion.

But VF warned sales from continuing businesses "could decline slightly in 2002, as the company continues to believe that the economic environment and consumer spending on apparel will remain under pressure."

To improve sales of its targeted brands, the company said it will make a 10 percent increase in brand investment for 2002.

The company is consolidating operations for its intimate apparel line and "aggressively seeking" outdoor brands to bolster that segment. VF acquired North Face and Eastpak in 2000.