As VF navigates the many challenges brought on by the COVID-19 pandemic, VF Corps consider their number one priority is the health and well-being of their associates worldwide. In addition, VF corp. fully recognize the potential negative impact this global crisis can have on the millions of people who work in the extended global apparel and footwear supply chain.
Teams across VF are working to protect the financial integrity of our business while also helping to protect the livelihoods of our suppliers and the workers they employ.
Summary of Actions from one of VF Corps high Management:
- We are paying our suppliers for all orders that have already been produced. We will pay these purchase orders per normal terms and conditions.
- We are honoring all valid purchase orders with a factory release date before June 1, 2020.
- VF agrees to honor the quantity and price of goods for purchase orders with a factory release date before June 1, 2020.
- *In some cases, VF is delaying shipment dates to manage the flow of goods into the destination country. When shipment must be delayed, we engage with our suppliers to determine if the shipment delay will create a cashflow challenge for our supplier, and if so, VF will work with the supplier to support their financial needs through a variety of potential solutions.
- We have asked our suppliers to pause work on any open purchase order with a release date on or after June 1. This will allow time for us to reassess projected consumer demand so we can better understand the appropriate timing for the delivery of these orders.
- We have asked all suppliers with paused orders (those for release after June 1) to provide details of their liabilities resulting from ordered raw materials and work completed in relation to these open purchase orders.
- To help us manage this situation in partnership with our suppliers, we are not issuing new purchase orders until we have better visibility of consumer demand and production needs.
- Looking ahead, we will update and communicate the payment terms and conditions for future purchase orders. This will help us more effectively manage our cashflow.
He added also, “We believe these steps demonstrate our commitment to maintaining strong working relationships with our suppliers and our shared interest in maintaining open channels for ongoing dialogue and discussion. At the same time, we are working with our peers across the apparel and footwear industry, as well as with multi-stakeholder organizations to identify additional opportunities to support apparel factory workers during these uncertain times. We will continue to monitor the developments in the global COVID-19 pandemic and its impact on the contract suppliers and workers throughout our global supply chain. We will modify our actions accordingly.”