Vans President Quits; Firm Cuts Local Output : Manufacturing: Analysts say Orange-based firm may have to close one or both Southland plants.
The president of Vans Inc. has resigned after just nine months on the job and will be replaced by the troubled sneaker manufacturer’s vice chairman, the company said Friday.
Word of Christopher G. Staff’s sudden departure came as Vans Chairman George E. McCown said he does not expect the company’s fourth-quarter financial results to meet analysts’ expectations because “we have not sufficiently responded to the rapid shift in our production mix.”
That situation, analysts said, is forcing Vans to consider shutting down one or both of its Southern California plants because the shoes it makes overseas are outselling its domestic products.
On Friday, as previously announced, the company furloughed the workers at the two plants for one week in order to cut production. In April, Vans shut the two factories for two weeks, idling more than 2,000 workers in a bid to cut inventory. At the time, Staff promised a quick resolution to the excess capacity problem.
Staff, who joined Vans in August, was not available for comment on Friday. Before joining Vans, the 52-year-old executive had been president and chief operating officer of the Speedo and Action Sports divisions of Authentic Fitness Corp. in Van Nuys.
His resignation is likely to rattle investors. “That’s most worrisome,” industry analyst Eric Appell said. “Staff came on board to turn the ship around. Maybe he sees something that suggests the ship can’t be turned around.”
In a statement issued Friday, McCown expressed “regret that the situation between Vans and Staff did not work out more favorably . . . we wish him well with his future endeavors.”
McCown said Vans Vice Chairman Walter E. Schoenfeld replaces Staff as president and chief executive.
McCown said Friday that Vans will “reach some conclusions by the end of this month which may result in a significant onetime charge against earnings.” McCown and Schoenfeld declined on Friday to speculate on whether the plants in Orange and Vista, in northern San Diego County, would be closed.
But industry analysts said that a reduction in capacity must occur. “It’s inevitable” that at least one of the plants will be closed, said Appell, an analyst with Dabney Resnick Inc. in Beverly Hills. “Sales of product produced overseas are cannibalizing their domestic sales.”
Vans, the largest manufacturer in the city of Orange, also faces a union election on June 30, as part of settling federal charges that last year it interfered with a union vote.
“It’s funny how a month from now is just about when employees make a decision about a union,” said Raul Lopez, head of Teamsters Local 396. “And they’re also laying off employees without pay for one week starting Monday. The company is trying everything possible to get employees to vote against a union.”
Vans officials said earlier that the one-week shutdown, which started after Friday’s last shift, was being driven by overcapacity.
Vans stock fell 43.75 cents a share Friday to close at $4.125 in Nasdaq trading, after dropping briefly to a low of $3.75. On March 24, the stock fell 22% to close at $4.75. At the time, analysts linked the stock drop to nearly 400 layoffs.
