VF Corp. (VFC) - Get V.F. Corporation Report, owner of Vans, Timberland, and North Face, said Friday that it temporarily closed about 60% of its owned and partner stores in China due to the deadly coronavirus.
Shares of VF at last check were up slightly to $77.04.
Stores that are currently open have seen retail traffic decline significantly, the Greenwood Village, Colo., apparel maker and retailer said in a statement.
“The safety and well-being of our associates and partners in China is our highest priority. Our thoughts are with those people affected by the coronavirus,” Steve Rendle, president and CEO, said.
"While the coronavirus will impact our financial results in the Asia-Pacific region in the near term, VF’s growth opportunity in China and across the Asia-Pacific region is significant and the fundamentals of our business are strong."
Rendle added that "VF is well positioned to navigate the impact of the coronavirus situation, given the diversity of our business and operating model in other key geographies.”
VF said that in fiscal 2019, the Asia-Pacific region and mainland China represented 12% and 6%, respectively, of total revenue.
The company said that while it is not possible to gauge the impact on its supply chain at this point, about 16% of its total cost of goods sold is sourced directly from mainland China, of which 7% is bound for the U.S. market.
"The coronavirus situation in China was not contemplated at the time VF provided its adjusted fiscal 2020 outlook on Jan. 23, 2020," the company said.
"We will provide an update as to the operational and financial impacts of the coronavirus during VF’s fourth quarter fiscal 2020 conference call in May 2020."
There are now 31,240 confirmed of coronavirus worldwide and at least 638 have died, according to the latest information from the World Health Organization.
Analysts have forecast a 2-percentage-point reduction in China's GDP as global investors continue to pile into U.S. stocks.