While many companies have left California for Texas in recent years, iconic outerwear brand Dickies is taking the opposite route as the apparel company is ditching its Fort Worth headquarters for Orange County.
The 102-year-old brand will join sister company Vans at its corporate offices in Costa Mesa.
Dickies, which reported $618.4 million in revenue in its last full fiscal year, and Vans are both owned by Denver-based VF Corporation (NYSE:VFC). The relocation is set for May 2025.
“This move allows VF to further consolidate its U.S. real estate portfolio as part of its stated business turnaround strategy,” VF Corp. spokesperson Ashley McCormack told the Business Journal in a statement. “But more importantly, by co-locating Dickies with our Vans team in Costa Mesa, we will create an even more vibrant campus where creativity and best practice sharing can thrive through greater collaboration and connections — creating a dynamic and innovative environment similar to our other VF co-branded offices.”
The move to Southern California is part of “the revitalization of the Dickies brand” and would directly affect “a significant number of positions held by our Dickies associates at our Fort Worth headquarters,” she added.
Dickies Global Brand President Chris Goble is relocating with the company to Costa Mesa.
The relocation impacts about 120 employees. Dickies, however, has not yet announced how many of those employees would relocate to Orange County from Fort Worth.
“This relocation will be carefully managed over an extended transition period, with completion expected by May 2025,” McCormack said. “Our priority is to ensure that everyone is treated with respect and care throughout this process. We will provide resources and assistance to help them navigate the next steps in their careers.
“While this was a tough call, we are confident this change will help us revitalize Dickies so we can carry on the brand’s heritage for years to come.”
Declining Revenue at VF Corp.
The move comes as VF Corp.’s has seen revenues diminish at three of its four core brands. Besides Vans and Dickies, the company owns The North Face and Timberland.
For the fiscal year ended March 2024, Dickies reported $618.4 million in revenue, a 15% decrease from the $725.2 million it reported in March 2023. Costa Mesa-based Vans reported full year revenue of $2.8 billion, down 24% while Timberland saw revenue of $1.6 billion, a 13% decline. The North Face, VF Corp.’s top performing brand, was up 2% to $3.7 billion during the same fiscal period.
For the fiscal year ended March 30, VF Corp. reported $10.5 billion in revenue, a 10% decrease from the previous year. The company also posted a net loss of $968.9 million, a sharp reversal from the $118.6 million profit recorded the year prior.
The downward trend continued in the latest quarter. For the three months ended Sept. 30, VF reported revenue of $2.8 billion, a 6% decline year-over-year. The decrease was primarily driven by a 10% drop in revenues in the Americas region.
Dickies in the Middle of “Stabilization” Phase
Founded in 1922, Dickies is best known for its durable workwear, including pants, shirts, overalls and outerwear designed for workers in industries such as construction and manufacturing.
In 2017, VF Corp. paid $820 million in cash for the privately held Williamson-Dickie Mfg. Co., the family-owned parent company of Dickies and other brands such as Workrite, Kodiak, Terra and Walls.
The purchase effectively doubled VF’s workwear offerings.
But over the years, VF Corp. CEO Bracken Darrell said Dickies had lost its way in the U.S. as it “pushed” too hard to become a fashion brand.
“We moved too fast to try to turn it into a pure fashion brand here in the U.S.,” he said. “In the U.S., it’s really struggled because we lost our footing in our core work business, and we’re really refocused completely there now. So, I’d say more to come there. I think Dickies is a fantastic brand and a great business, a really good, strong, solid brand. and we’ll get it back on its footing. It will just take a little time.”
In late October, Dickies posted second-quarter revenue of $152.4 million, down from $171.4 million in the same period last year. Vans also saw its revenue fall, reporting $667.4 million compared to $748.8 million in the prior year’s second quarter.
Though Dickies saw an 11% decline in revenue in its latest quarter, Darrell told investors during the company’s last earnings call that he is optimistic about the brand’s future.
“I just love Dickies. I have to say, I love all our brands, but I really love Dickies because it’s just a special brand,” he said. “You’ve got 16-year-old kids wearing them to go surfing right off the beach anyway.”
He went on to say the brand is in the middle of a “stabilization” phase.
“We’ve really reset our strategy, and we’ve got the right level of focus on making sure we’re winning at work and then eventually going beyond that,” Darrell said, adding that Dickie’s growth is now in the hands of its newly tapped leader Goble.
JPMorgan said in recent note that Goble, tapped in October to be Dickies’ global brand president, is “focused on driving functional performance in the workwear category.”
Packing Vans and Making Changes
Adjusting corporate footprints isn’t something new for VF Corp. Its Vans team cut its Costa Mesa corporate office operations from two buildings to one last year, per Darrell.
Dickies’ parent company has also been making adjustments at its Denver headquarters. VF Corp. eliminated two floors from its space as part of the company’s plan to eliminate physical assets to benefit cash flow. In response to a double-digit decline in annual sales in fiscal 2024, VF Corp. made several executive moves in hopes of righting the ship.
In May, the company named Michelle “Sun” Choe as Vans’ new global brand president. Other brand leadership moves included naming Paul Vogel as CFO.
The retailer is hoping Choe, who for the past seven years played a prominent sales role at Lululemon (Nasdaq: LULU), will make the brand relevant again by establishing long-lasting, meaningful connections with consumers.
“At Vans, we will do just that–capitalizing on the brand’s identity as a lifestyle defined by creativity and authenticity,” Choe said in a statement earlier this year.
Goble was hired earlier this year to help revitalize the Dickies brand.
Activist investor Glenn Welling, Engaged Capital’s founding partner and chief investment officer, began working with Darrell in October 2023, when VF Corp.’s stock was down almost 45% from previous 52-week high.
In June, Welling told the Business Journal Darrell is “putting the key elements of the foundation in place to turnaround the business.”
He is hiring the leaders needed to run the brand, pruning the portfolio to focus on what matters and reducing costs to improve margins and provide financial flexibility to reinvest behind the brands that will drive the majority of the value creation—Vans and The North Face,” Welling said.
“It’s just going to take a bit of time before you see the benefits of these decisions in the numbers, but this is where it starts.”
Wall Street has responded favorably to the turnaround effort with the stock prices rising to $20.43 – a more than 66% jump in the last six months with a market cap of $8 billion.
Musical Chairs: Cali-Tex Style
Corporations relocating their headquarters to other cities or states made headlines between 2018 and 2023, with many companies leaving California and moving to Texas.
Nearly 500 companies relocated their U.S. headquarters during that time period, with about half of those planting their corporate homes in Texas, according to a 2023 report by CBRE.
CBRE specifically found 209 out of 465 companies that moved its corporate headquarters chose Texas as its home between 2018 and 2023, with lower taxes and a favorable business climate being the top reasons for relocating to the Lone Star State.
The CBRE study specifically said a company relocating its headquarters from Silicon Valley to Austin, for example, could save between 15% and 20% in tech employee wages.
Companies that relocated out of California and into Texas between 2018 and 2023 included Oracle and Tesla. Austin was the most popular city for corporate headquarter relocations.
Dickies migrating from Dallas to Orange County bucked the trend of major corporations ditching the Golden State for Texas.
