Kontoor Brands is to delay the launch of the Wrangler brand in China as a result of the coronavirus outbreak (Covid-19), which originated in the country at the end of 2019.
The group was due to launch the brand in China this spring.
In an investor call following the publication of its fourth-quarter results, it said though it had not seen any material issues within its supply chain or sourcing as a result of the outbreak, it had made the decision to push back the Wrangler launch for a short period.
“We believe the proven course of action is to delay the launch for a short period until fall of this year when we can more effectively optimise our go-to-market strategies, our interactive consumer engagement and better leverage our demand creation spent,” said CEO Scott Baxter. “While the team is extremely excited to get going and we are ready, this is the best decision for the brand and most importantly our employee’s safety. We remain optimistic about the long-term growth potential of this market for both our brands and we will execute against our strategies to most effectively capture the opportunities.”
The Lee-owner reported fourth-quarter revenue of US$653m, a 10% year-over-year decline on a reported and constant currency basis. Revenue decreased 8% compared to fourth-quarter 2018 adjusted revenue. Net income, meanwhile, dropped 45% to $28.8m from $51.9m last year, while fourth-quarter reported gross margin increased 210 basis points to 40.7% on a reported basis.
Coronavirus continues to impact the global apparel industry. Several apparel sourcing events have been postponed or cancelled and many apparel sourcing markets are reporting delays to production due to a raw material shortage coming out of China.
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