Lucy Activewear is moving its headquarters from Portland to the San Francisco Bay Area to be in closer proximity to its Outdoor Coalition offices and resources. VF Corp., the parent of lucy, said approximately 82 positions will be eliminated.
VF will be relocating lucy’s offices to Northern California at the end of August. In addition, the brand’s primary distribution facility, also located in Portland, will be merged into VF’s Outdoor distribution center in Visalia, Ca. during the first quarter of 2011.
In a statement, VF said one dozen of the approximately 95 Lucy associates based in Portland will be offered the opportunity to relocate to California.
VF reassigned lucy from its Contemporary Coalition, which includes 7 for All Mankind, Ellas Moss and Splendid, to its Outdoor Coalition this past fall to leverage that division’s expertise in technical performance. VF’s Outdoor Coalition also includes The North Face, Vans, Reef, Napapijri, Kipling, JanSport, Eastpak and Eagle Creek. The offices of The North Face and Jansport, among others, are in San Leandro.
The move also comes as VF took a $114.4 million after-tax impairment charge in the fourth quarter because results for lucy, Nautica, and Reef were below the company’s expectations since the time each was acquired. The charge reflected the devaluation of goodwill and intangible assets since each acquisition.
“As an activity-based brand focused on women who exercise, practice yoga, or explore the outdoors, the lucy brand shares many key attributes with our Outdoor brands,” said Steve Rendle, President of VF’s Outdoor Americas Coalition, in a statement. “As such, we have identified opportunities for the lucy business to leverage expertise within the Outdoor Americas Coalition in areas such as product innovation and retail management. In order to realize the brand’s full potential, we must better leverage the talent and resources located in North California.”
He added, “We have met with all of our lucy associates to explain our transition plans and how it impacts them. We greatly appreciate the hard work and dedication of all of our associates at lucy. We believe the relocation of lucy’s operations will create better synergies within our Outdoor coalition, enable better use of resources and enhance business results so that the brand can remain competitive.”
VF said all associates whose positions are eliminated will be offered a package that will include some combination of severance pay, outplacement assistance and other benefits.
VF spokesman Paul Mason told The San Francisco Business Times that VF plans to hire 50 people in the Bay area for product, retail, marketing and operations positions. The business journal also noted that Corrine Doran, lucy’s director of business development, has been serving as interim leader as lucy looks for a permanent head.
VF bought lucy in 2007 for $110 million. At the time, Lucy operated 50 stores and had annual revenue of $57 million. Today, Lucy operates 65 stores across the country.
