Vanity Fair Case Study

During August 2009, Chris Fraser, the President of Supply Chain International for VF (Vanity Fair) Brands, was advocating to change VF Brand’s supply chain strategy. The need for change was fueled by a multitude of factors such as the economic crisis, changes in the structure of the apparel industry and VF’s new company strategy or “Growth Plan”.
First, the economic crisis had an immediate impact and required VF to find ways to overcome its effects. The short term impact of the 2008-09 economic crises was huge; the revenue of the total garment industry during the first half of 2009 declined by 10%, when compared to the revenue in the same period in 2008, with VF’s revenue and earnings declining by 9% and 30%, respectively. Furthermore, many of VF’s garment contractors were very small and operated on razor sharp margins with negligible buffer capital. These contractors were not well positioned to handle sudden fluctuations in their working capital, leave aside handling the effects of an economic crisis. One of VF’s Nicaraguan jeans suppliers which supplied close to 15 million pairs of jeans per year was affected by the crisis and decided to relocate to Vietnam and in the process provided VF with less than 3 months’ notice to find a replacement. VF had a hard time finding an alternate supplier.
Second, the changing structure of the apparel industry was a major cause of concern for VF and could have long-term impacts on VF’s operations. VF had run out of new low cost options