Vans Reports Big Loss
The maker of Vans brand of sneakers and casual shoes reported a larger than expected quarterly loss of $2.4 million Friday and said that its president has resigned.
The news sent Vans Inc.’s stock down $2.25 a share to close at $6.875 in NASDAQ trading. The price hit a peak last year of $25.75. Industry analysts tried to calm the market with projections of long-term health for the 27-year-old Orange-based company, which over the years has seen its fortunes soar and sink.
Richard P. Leeuwenburg, brought in five years ago by new owners to turn the company around, resigned as president and chief executive “to pursue personal interests.” He couldn’t be reached for comment but said in a prepared statement that he was sad to leave Vans and proud of what the company has achieved.
Walter E. Schoenfeld, elected vice chairman of the company earlier this year, will serve as the interim president. The company also hired Ed Bulen, a longtime May Co. executive, as vice president for its 76 retail stores, where sales dropped 16% for the latest quarter.
Analysts said Leeuwenburg, whose strength is in manufacturing and operations, created efficiencies at the plant and put the company on track toward its goal of turning around orders in a day and getting specialty shoes out to customers in 10 days. He also doubled the company’s revenue during his tenure.
The company said the loss of 25 cents a share for its third fiscal quarter, which ended Feb. 28, was caused primarily by the lingering recession and costs associated with a January raid on its plant by federal Immigration and Naturalization Service agents. That raid wiped out 10% of Vans’ work force--230 employees.
The recession has caused a buildup of inventory that will likely be sold below cost. Also, concerned that it will not be able to collect from certain customers, Vans wrote down their inventory and accounts receivable by $1.3 million.
The company’s $2.4-million loss for the latest quarter contrasted with a profit of $1.5 million, or 15 cents a share, for the same period a year earlier. Three-month sales fell 8% to $18.2 million from $19.7 million.
