By Ed Sealover – Reporter, Denver Business Journal
Aug 1, 2019, 7:12am MDT Updated Aug 4, 2019, 7:27am MDT
They began arriving in Denver in early June, coming in groups of 40 to 80 people per week. Some made the journey westward from Greensboro, North Carolina. The majority of them are fleeing the Bay Area — specifically Alameda, California.
By the end of August, most of the roughly 400 employees that VF Corporation (NYSE: VFC) is relocating to Denver will be here as the apparel giant and Fortune 260 company moves its headquarters from the East Coast to the Mile High City and consolidates its five outdoor brands — The North Face, JanSport, Smartwool, Altra and Eagle Creek — under one roof. They will occupy “Camp VF,” five floors of temporary space in the Great-West Life building in the Denver Tech Center, until the spring of 2020, when they will take over all 10 floors of 1551 Wewatta St. in Lower Downtown once building renovations are completed.
Time will tell what will be the ultimate impact of VF’s move to the community — the most significant relocation of a headquarters to the Denver area since Arrow Electronics (NYSE: ARW) bid goodbye to Melville, New York, in favor of Centennial in 2011. But even before it can call attendance at an all-staff gathering, the company with a $34 billion market cap is having some major effects on its new hometown.
Both the Metro Denver Economic Development Corp. and the Colorado Office of Economic Development and International Trade are citing the company in all of their recruiting materials — with the Metro Denver EDC pointing out that VF’s headquarters relocation from a lower-cost market in Greensboro testifies to the value of this area to corporations. The company has signed a two-year sponsorship with the Colorado Classic, allowing the women’s-only bike race to offer prize purses that allow it to attract the world’s top competitors. Colorado’s $62.5 billion outdoor-recreation industry already has a larger collective voice on economic and environmental matters.
But VF, which received a potential $27 million in incentives to consolidate it headquarters and brand offices here, is bringing half of the employees with it from other states who will fill its 800 tax-subsidized jobs — and hiring about 40 percent of the people to fill vacant jobs so far from outside the Denver area. The company already has convinced arguably the state’s two highest-profile outdoor-recreation advocates — former Colorado Outdoor Recreation Industry Office Director Luis Benitez and Outdoor Industry Association Executive Director Amy Roberts — to leave their posts to work for it. And outdoor-company operators admit that having such an iconic company in town competing for workers is going to make employee recruitment and retention a little more difficult and a little more expensive in the short term.
Still, the only thing harder to find in Denver right now than an outdoor fanatic who isn’t updating their resume is a business leader who isn’t ebullient about what VF will bring to Colorado, competition and all. And that in itself is telling of just how transformative the 120-year-old company may be to the economic fabric of the third different state it has called home.
“To be able to say they are headquartered in Denver and found value here, that case study is a validator for other companies we are recruiting,” said J.J. Ament, CEO of the Metro Denver EDC.
Kathleen Lavine, Denver Business Journal
“To be able to say they are headquartered in Denver and found value here, that case study is a validator for other companies we are recruiting,” said J.J. Ament, CEO of the Metro Denver EDC. “I think that’s an effect it’s had since the moment [in August 2018] its announcement was made. We’ve put it in all of our presentations.”
Decades of transformation
VF is, according to Fortune magazine, the 252nd-largest company in America — a growing firm that generated $12.9 billion in revenues last year while signing paychecks for 69,000 employees. Originally a Pennsylvania-founded glove manufacturer and then a maker of silk lingerie, it now owns 20 companies in the active, outdoor and work sectors — including household names like Vans, Timberland and Dickies whose primary offices will remain in other states.
The purpose-driven company (whose motto is “We power movements of people and sustainable lifestyles for the betterment of people and planet”) decided to relocate and consolidate under one roof because in North Carolina it was far from the outdoor recreation epicenter of America. And its outdoor brands were scattered — clothier/gear maker The North Face and backpack maker JanSport in the Bay Area, luggage manufacturer Eagle Creek in Southern California, running-shoe company Altra in northeastern Utah and performance-sock maker Smartwool in Steamboat Springs.
Combining the companies’ locations, as VF does in its European and Asian hubs, will cut real-estate costs, reduce the company’s physical footprint and minimize travel time between the 20 brands, allowing officials to get from Denver International Airport to any of their brand offices in three hours, VF CEO Steve Rendle said in an interview last month. But it also allows them to locate in the heart of the outdoor space for which they make goods, and it will have the incalculable effect of increasing teamwork between the companies and sharing talent to work as one unit on issues.
VF Corp. brands
The Altra brand features running and casual shoes such as the men’s Cayd pictured here.
For us, it’s kind of this final step in what’s been a multiyear journey to transform ourselves to be this consumer-centric, more retail-minded company,” Rendle said.
Knowing that its talent was the key to its success, VF offered jobs to the roughly 800 workers whose positions would pick up and move to Denver. In previous headquarters relocations, OEDIT had seen no more than 30 to 35% of employees come to Colorado with their firms. But after offering “generous” relocation packages and allowing all affected workers to travel to Denver for a weekend to get a sense of housing and schools and other lifestyle factors, a full half of those positions will be filled by people coming in from California, North Carolina or Utah. (VF received no incentives for the 75 jobs that will move from Steamboat to Denver when Smartwool relocates in the spring.)
Anita Graham, VF executive vice president and chief human-resources and public-affairs officer, says the willingness of so many people to give up their current homes and move to Denver with the company shows the level of commitment that VF has engendered as an employer.
Kathleen Lavine, Denver Business Journal
Anita Graham, VF executive vice president and chief human-resources and public-affairs officer, argued that the willingness of so many people to give up their current homes and move to Denver with the company shows the level of commitment that VF has engendered as an employer.
She noted too that of the 350 people VF has hired anew so far for Denver-based roles, about 60% are from the local market but 40% are moving into Denver with the company, displaying the national draw for talent. The firm receives an average of 200 applications for each job it posts — putting it at roughly 70,000 applications so far for its Denver-based positions — and has gotten as many as 800 job-seekers for one role.
But this movement of people from other states for the positions means that roughly $18.2 million of the job-growth incentive tax credits Colorado is giving to VF for bringing jobs to this area is going to partially offset the federal income taxes of individuals who are moving to the Centennial State with help from the state government.
Michelle Hadwiger, global business development manager for OEDIT, noted that the tax-incentive law doesn’t contemplate where people are coming from who must occupy those jobs for one year in Colorado before the tax credit can be claimed by the company. And she noted that while they may be coming from another state in this case, the beneficiaries of the tax credits will be contributing to Colorado’s tax base, spending money in this state and creating a ripple effect in the economy.
Ament too defended the offering of tax credits to so many workers who will be moving here, calling it “a huge validation that Colorado is still a very attractive place to live.” And he noted that while the first wave of jobs may be attracting folks by the bushelful from other states, VF will continue to expand and grow jobs in Colorado — and those future positions likely will be filled by people already working here or graduating from local colleges and universities.
Rendle added that VF, upon accepting the incentives, planned to match them at a 1-to-1 ratio with contributions to this community from its nonprofit foundation. And therein lies another reason that local officials are heaping such praise on this relocation.
‘Employer of choice’
One of the key players in bringing VF to Colorado was the state’s Outdoor Recreation Industry Office, a division of OEDIT that was created by former Gov. John Hickenlooper to try to take advantage of Colorado’s jaw-dropping and wild scenery and attract companies that focus on getting people into nature. One of the first major hires announced by VF was, in turn, Benitez — who launched the outdoor rec office and piloted it for nearly five years before deciding the company he recruited was the place he would go to work as vice president of government affairs and global impact in March.
Then, last month, Roberts announced she was leaving her four-year position as head of the OIA to become senior director of communications and corporate social responsibility for The North Face. Roberts is staying with the influential organization until the end of September and helping officials search for her successor.
Rendle said that VF does not want to come in and poach the best employees from other outdoor companies and organizations, and Graham noted that VF did not put up billboards or actively recruit from other companies for its open positions when it decided to move to Denver. But both said that the company does not shy away from being the employer of choice in the industry, and it is able to offer benefits like paid parental leave and fully funded second opinions from expert doctors across the country that many of its competitors do not.
Steve Rendle, chairman, president and CEO of VF Corp., stands next to a sign at “Camp VF,” five floors of temporary space in the Great-West Life building in the Denver Tech Center. The company will work from that base until the spring of 2020.
“We’re OK with competing [for talent]. And it’s probably not just with the outdoor space,” Rendle said. “What we want to do is put forward the best proposition.”
Kim Miller — the president of Boulder-based footwear manufacturer Scarpa USA and a 40-year outdoor-industry veteran who serves on Colorado’s Outdoor Recreation Advisory Council — acknowledged that as VF continues to ramp up hiring, companies more than likely will see a smaller pool of qualified applicants for openings in the near future and could have to raise their wage levels because of the effect VF will have on the local sector.
“They probably are putting some pressure on us in the short-term sense of availability of good staff that is fit to hire,” Miller said. “Certainly, I put that through my filter and said ‘This could happen.’”
But Miller, a former member of the Snowsports Industries America board of directors, said he believes that an increase in competition for personnel will be more than offset by a variety of boosts VF bring to the Colorado outdoor-recreation sector, which already supports some 511,000 direct jobs.
VF’s decision to locate in Colorado will also attract more outdoor-recreation-industry workers to the state, especially as other moves, such as that of the Bureau of Land Management headquarters from Washington, D.C., to Grand Junction, put more of a national spotlight on the ecosystem that is developing here, he said. It will also allow the local sector to have greater power in its collective voice when it needs to speak up on issues from tariffs to environmental regulations.
As a company that has hired a lot of people from the Oakland area for its North Face and JanSport brands, VF will help to bring an understanding of how to promote greater diversity in the sector — a goal the company repeatedly has espoused, Miller noted. And while it may attract high-quality leaders away from other private companies or government-focused organizations, its presence in Colorado may be the difference between those people leaving the state to climb the industry ladder or staying local to do that.
For all that potential influence that VF is set to wield, however, Rendle is squarely focused right now on two things: Keeping the company in a profitable position for multiyear growth and making sure that the hundreds of employees who are uprooting their lives to stay with or to come work for VF feel like they have a home, both professionally and personally.
At the moment, that involves using little touches like the backpacks and camping chairs that line the elevator lobbies of the five floors VF occupies in Greenwood Village — amenities that workers are free to take on weekend trips as they explore the area and hopefully get to appreciate it like the corporate executives of VF already have done.
But by the time this nearly year-long relocation process comes to its conclusion next spring, Rendle knows that VF must not only be firmly planted among the business and economic-development groups that recruited it, but also among the community that is raising expectations high on what the Denver area’s 11th Fortune 500 headquarters will mean to it.
“No. 1 [on our priority list] is getting those who are relocating comfortably settled in Colorado and getting life back to normal,” Rendle said. “I think we all look forward to being able to be settled in.”