One of Bracken Darrell’s first stops as CEO of the company that owns Vans was a visit to the son of its co-founder.
Darrell inspected the memorabilia in the office of Steve Van Doren, who is the brand’s ambassador, including photos of Warped Tour, a music festival Vans used to sponsor that helped burnish its counterculture status. Since the company stopped sponsoring the tour and similar events, it has lost more young people than any other age group. Darrell thought he had hit on a clue to help answer how the shoe brand lost its cool.
It is a question a lot of people are asking about the Southern California company, which is dragging down owner VF after years of being its engine of growth. The 60-year-old Darrell, who joined VF in July, is trying to resuscitate the $11.6 billion owner of brands that also include the North Face and Timberland.
He doesn’t have much time. Activist investors are urging him to cut costs and jettison brands.
Key to fixing VF is turning around Vans, which is its largest brand and accounts for nearly a third of total revenue. Vans’s performance has been hurt by a shift in the way VF operates, according to interviews with more than a dozen current and former employees as well as industry executives.
The secret to VF’s success for decades was a hands-off approach that kept corporate expenses low and allowed its brands to retain autonomy over key functions such as product development and marketing. In recent years, it chipped away brand independence and consolidated more power at the corporate level.
“People running the brands started to feel like they had to ask permission to do everything,” Darrell said in an interview, explaining that the corporate entity had become a gatekeeper of resources rather than a facilitator.
At Vans, innovation stalled as the company remained focused on selling shoes designed in the 1970s while many consumers gravitated to more comfortable alternatives.
VF’s net income in the most recent fiscal year declined more than 90% from a year earlier, partly because of the devaluation of its streetwear brand Supreme. VF shares are down about 75% since the end of 2021, making it one of the worst performing stocks in the S&P 500 index over that period. Debt has ballooned to $6.7 billion.
It has put three luggage and backpack brands—Kipling, Eastpak and JanSport—up for sale. In October, it cut its dividend by 70%. And at the height of its critical holiday season, the company disclosed in December that a cyberattack had disrupted its ability to fulfill orders and would likely have a material impact on its business.
Darrell spends much of his time at Vans’s Costa Mesa, Calif., campus trying to diagnose its problems and figure out how to fix them.
He visits stores to talk to customers and works in the company cafeteria, where he shares his mobile number with employees. He plans to steer more investment into the brand and is pushing executives to develop new products faster. He is urging Vans employees to recapture the outsider mindset that many current and former employees say has slipped away as the brand has gone more mainstream. As one senior executive has told staff, “bring back the f— you attitude.”
VF got its start as a glove and mitten factory in 1899 in Reading, Pa. It went public in 1951 and later became a conglomerate of clothing brands, spending billions to swallow Wrangler and Lee jeans among others.
Many of the companies VF owned retained their headquarters—each with a unique identity. Employees skateboarded down the halls of Vans’s offices. At North Face’s headquarters, conference rooms were named for mountains such as Alaska’s Denali peak.
From 2000 through 2016, VF’s revenue more than doubled, while profits more than quadrupled. “Our results demonstrate the strength of VF’s business model,” former VF CEO Eric Wiseman told analysts in 2015.
Things began to change when VF spun off its jeans business in 2019, and moved its corporate headquarters from Greensboro, N.C., to Denver.
For the first time, several brands were brought under one roof, including North Face, JanSport, Eagle Creek and Icebreaker. The goal was to boost innovation and collaboration.
Rather than relocate, employees quit. North Face lost more than three quarters of its staff and had to hire hundreds of people to fill vacancies. A VF spokesman said that while the move to Denver resulted in “meaningful attrition,” it was able to retain key talent.
As the center became more bloated, resources were diverted from the brands, according to a slide deck prepared by the activist investor Engaged Capital, which built a stake in VF. According to Engaged, corporate expenses grew 34% from 2020 to 2023.
Vans was further hamstrung because its parent company relied on its profits to fund other parts of the empire, including smaller labels.
VF tried to impose innovations on its brands that they didn’t always want, and sometimes declined to fund those that the brands deemed important, according to former employees.
It tried to get Vans to make wool sneakers, even though Vans executives said their customers didn’t want them. VF declined to provide more resources for a popular program that allowed Vans customers to design their own shoes, because its other brands weren’t interested in customization.
Darrell’s management philosophy was shaped by childhood trauma.
He grew up in the small town of Owensboro, Ky. On Christmas Eve when he was nine years old, his father left a note on the fireplace mantel telling his family that he was leaving and wouldn’t be coming back.
After his parents divorced, his mother had four car wrecks and a nervous breakdown. Darrell told her to imagine she was on a beach and to draw a line in the sand behind her feet. Everything behind her was the past. She couldn’t change it, but she could learn from it, he told her.
“That’s how I feel at VF,” Darrell said. “The past is something to learn from.”
Over a career in which he revived Old Spice deodorant at Procter & Gamble and steered a turnaround at computer keyboard and webcam maker Logitech, Darrell said he developed a healthy fear of the pitfalls of success. “Once you have it, you start taking fewer risks,” he said.
While at Logitech, which he ran for a decade, he penned a Dr. Seuss-like poem titled “The Secret to Success: Avoid it.”
It reads in part:
“SUCCESS makes you fearful, Of losing your place, Of gambling with stature, Of losing your face.”
Darrell said Vans, which was founded in 1966, had become too reliant on five classic styles that it has sold since its infancy—including the checkerboard slip-ons worn in the movie “Fast Times at Ridgemont High” by Sean Penn.
The classics are made much the way they were at inception, by gluing the upper part of the shoe to a flat rubber sole. That method still resonates with the skate crowd, who like the way the shoes grip the boards. But non-skaters complain on websites such as Reddit—where one thread is titled “Don’t your feet hurt after wearing Vans”—about the shoes’ flat footbeds that have little arch support.
Darrell is pushing executives to move faster to churn out new styles that are more in tune with current trends and has examined the designs for every product that Vans plans to introduce over the next three seasons.
Another move is to free up all of VF’s brand presidents from some of the daily minutia so they can spend more time on product innovation. And he’s outlined $300 million in cost cuts, including the elimination of 500 jobs globally, a portion of which will be reinvested into the brands.
So far he has the support of the activists. “Bracken is doing a diligent job in understanding what made VF special for more than 100 years and he’s moving with urgency to fix the damage from the last five years,” said Glenn Welling, Engaged’s founder.
“Vans caught a wave,” Darrell said, referring to the brand’s turbocharged growth of recent decades when everyone from Rihanna to David Beckham was wearing its sneakers. “That’s a dream, but if you’ve misdiagnosed why it grew, it can be a nightmare on the way down.”
Write to Suzanne Kapner at suzanne.kapner@wsj.com