VF Corporation announced August 14 that its North Face and JanSport subsidiary headquarters are leaving the Bay Area and relocating 650 jobs to Denver partially due to local costs.
VF Corporation bought JanSport in 1986 and North Face in 2000. While located in the Bay Area under the umbrella of a Fortune 500 company, the two iconic brands accounted for half of all small backpacks sold in the United States.
The San Francisco Chronicle called the pending departure of North Face a sign of the difficult financial challenges non-tech companies face in the San Francisco Bay Area, which has become the nation’s most expensive metropolitan are to purchase a house or rent an apartment.
Spectrum Locations President Joseph Vranich told Chief Executive magazine in April that from 2008 through 2015, the media reported on 1,687 companies leaving California. Recent examples of Bay Area companies leaving include Bechtel Engineering moving to Reston, Va.; Jamba Juice moving to Frisco, Texas; and Bare Escentuals cosmetics moving to New York City.
But Vranich believes the real number was about 10,000, because the site-selection industry rule of thumb is that ten times more leave than are reported in the media. Vranich believes that corporations view California as overtaxed and over-regulated, while they also face ridiculously high housing costs and a politicly unfriendly business environment.
Spokesman for VF Craig Hodges acknowledged to the Chronicle that Bay Area costs were a factor in convincing the company to move brands with deep California roots from Alameda to Denver. But Hodges stated the move would not affect the retail stores North Face operates, including the nine in the Bay Area.
Hodges stated that besides the costs, the move was part of a consolidation that includes VF moving its corporate headquarters to Denver from Greensboro, North Carolina, where it had been located for 30 years. He emphasized that VF has a desire to consolidate its U.S. brands and operations, because that is something the company has executed in Asia and Europe to increase efficiency.
The Denver Business Journal reports that the Colorado Economic Development Commission had offered VF the second largest relocation packed in Colorado’s history to convince VF to move to Denver. The eight-year package includes up to $27 million in job-growth incentive and tax credits to create 800 jobs.
VF spokesman told Footwear News that the company will keep its Vans shoes headquartered in Costa Mesa, California, where the brand has compelling cultural ties.
But as part of a corporate restructure, Bloomberg News reported that VF will consolidate its Lee brand headquarters from Kansas City, Missouri, into its Wrangler brand headquarters in Greensboro, then spin off the over $2.5 billion jeans operation.
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