Director Steve Rendle had been dismissed a few months earlier, leaving behind a disastrous legacy: VF Corp had been one of the best-performing companies in the SP500 for fifteen years prior to his appointment, but with Rendle at the helm, the company suffered a veritable rout.
All the usual ingredients for disaster were mixed and matched: mismanagement, overpaid acquisitions, squeezed margins, unreasonable increases in debt to finance capital distributions to shareholders, ill-advised share buy-backs, excessive remuneration, and so on.
This sequence cost Rendle his head, and shareholders a valuation divided by four. The good news is that he was replaced at the helm of VF by Bracken Darrell, formerly CEO of Logitech, who came to the job on the back of the latter's spectacular turnaround - which, at the time, few would have bet on.
Ten years after taking up his post at the Swiss hardware manufacturer, sales had doubled, margins had increased sixfold, and the company's share price had risen tenfold. It's easy to understand why VF shareholders dreamed of a similar rescue.
For example, at the end of last year, Engaged's activists were already forecasting a tripling of the company's stock market value by 2026, with a few non-strategic asset disposals and minor cost reductions. This would have required an immediate recovery in operating profit. In truth, this prospect seems increasingly unlikely.
VF Corp published its half-year results yesterday. To sum up, there is good news and bad news.
The good news is the sale of Supreme to Luxottica at a very fair price - $1.4 billion. The company has lost $700 million on exchange - the cost of acquiring Supreme in 2020 was $2.1 billion - and what it has invested in the brand since, but it could have done even worse.
This providential breath of fresh air will enable the company to face the next debt repayment deadline without danger. At this afternoon's opening, the stock market valuation could jump accordingly.
The bad news is that VF's other brands have not escaped the gloomy economic climate seen everywhere in recent months. Sales are down across the board, including at The North Face, and worryingly so at Van's - taken together, these two brands account for two-thirds of VF's sales.
As a result, over the first six months of the fiscal year - which is out of sync with VF's usual calendar - operating profit was halved. Interest cover, which was still comfortable last year, is now much less so, at a time when credit markets are tightening and interest rates are rising.
In this respect, it would probably be premature to declare VF out of the woods. Curiously, investors seem to be very confident, since the Group is still valued at an EBITDA multiple above its historical average.