VF Corp to relocate business operations out of Hong Kong

1 min readUpdated Jan 12, 2021Jan 13, 202111:07 PM

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VF Corp. (VFC), a provider of branded lifestyle apparel, footwear and accessories, announced a transformation plan for its Asia Pacific operations, with relocations over the next 12 to 18 months with the first moves expected in April 2021.

VF plans to move the center of its brand operations from Hong Kong to Shanghai where the company currently employs approximately 900 office and retail associates.

In addition, VF also plans to relocate its Asia Product Supply Hub from Hong Kong to Singapore.

The company also plans to establish an additional shared services center for the region in Kuala Lumpur, Malaysia.

VF noted that Hong Kong will remain a key retail market for the company and its brands.

“Today’s announcement reinforces our commitment to investing in our business across the Asia Pacific region, while also supporting VF’s overall transformation plan to become a more consumer-minded, retail-centric, and hyper-digital enterprise,” said Steve Rendle, VF’s Chairman, President and Chief Executive Officer.

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What this means

VF Corp.'s decentralisation across Shanghai, Singapore, and Kuala Lumpur appears a pragmatic move to align operations with evolving market dynamics. By shifting its brand centre to Shanghai, it positions itself closer to mainland China's vast consumer base, a strategy Nike has also pursued. Relocating the supply hub to Singapore and establishing shared services in Kuala Lumpur diversifies operational risk and uses regional strengths. This pressures rivals to assess their own regional headquarters' effectiveness against growth opportunities. The risk lies in managing complex, multi-site transitions across 12 to 18 months, potentially impacting short-term efficiency. The key metric to watch will be VF Corp.'s quarterly revenue growth in mainland China over the next 18 months.

Maria Santos · Retail News Asia newsroom

Questions & Answers

Which specific business functions is VF Corp relocating from Hong Kong?

VF Corp plans to move its brand operations centre from Hong Kong to Shanghai. Also, the company intends to relocate its Asia Product Supply Hub from Hong Kong to Singapore as part of the transformation.

When are the first relocations expected to take place?

The company has indicated that the first moves as part of this transformation plan are expected to commence in April 2021. The overall relocation process is anticipated to take between 12 to 18 months.

What is the strategic purpose behind these relocations for VF Corp?

These moves are part of VF Corp's broader transformation plan for its Asia Pacific operations. The company aims to become a more consumer-minded, retail-centric, and hyper-digital enterprise, as stated by its CEO.

Will VF Corp cease all operations in Hong Kong after these relocations?

No, the company has stated that Hong Kong will continue to be a key retail market for VF Corp and its various brands. The relocations focus on specific operational hubs, not a complete withdrawal.

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