Vans owner VF Corp. sells its planes amid declining sales performance

VF Corp., the apparel and footwear company that owns the Vans and North Face brands, has sold off a pair of jets and has listed a Colorado airplane hangar as part of its efforts to cut costs and raise cash. 

Amid a sustained decline in revenue, Chief Executive Officer Bracken Darrell told analysts the company plans to exit the “expensive aircraft program that we had,” adding it’s an expense VF “should not have in the context of a turnaround like this.” The company expects to generate $600 million in free cash flow this fiscal year, in part with asset sales. 

The company has sold its two planes, it confirmed to Bloomberg. VF had at least one Dassault Aviation Falcon 7X jet, which was certified in July 2014, according to Federal Aviation Administration data. VF’s 52,800-square-foot airplane hangar in Englewood, Colorado, was listed for sale in February and remains on the market. The hangar was valued at just under $8.9 million this month, according to the Douglas County Assessor data. 

The Denver-based company has also downsized its office space to free up cash ahead of a round of upcoming debt maturities, including a $1 billion loan due at the end of the year and $750 million of bonds due next April. 

In a note to clients, TD Cowen analyst John Kernan wrote that “we struggle to see how VFC will fully pay down its upcoming maturities,” while noting that “any debt refinancing would come as a high yield credit.” 

VF shares fell 2.9% in New York trading Thursday, closing at the lowest level since 2009. The company’s quarterly earnings, reported on Wednesday, disappointed investors as all of VF’s major brands posted declining sales, topped by a 26% decline at Vans. 

Paul Lejuez, an analyst at Citigroup, wrote that there’s “little visibility into the timing of a turnaround.”