The cyber incident that hit lifestyle apparel brand VF Corp in December last led to a breach of personal data of about 35.5 million consumers, the company has revealed.
- The unauthorised activity, detected on 13 Dec 2023, disrupted global customer orders on its e-commerce site, delayed order fulfillment and led to cancellation of some product orders, VF Corp disclosed in a regulatory filing last week.
- The filing did not say specifically what kinds of personal data was taken, or if the company yet knows what was stolen. VF Corp said it does not retain consumer Social Security numbers, bank account information, or payment card information for its consumer businesses, nor does the company have evidence that the hackers stole customer passwords.
- VF Corp had earlier stated that the hackers had disrupted its operations “by encrypting some IT systems,” implying a ransomware attack. The ransomware group known as ALPHV (or BlackCat) later claimed credit for the breach, according to TechCrunch.
- VF had earlier claimed that it was experiencing operational disruptions and its “ability to fulfill orders.” However, the new filing admitted that VF Corp is “still experiencing minor residual impacts from the cyber incident,” but that it has caught up on fulfilling orders that were delayed.
- A new rule was passed by the Securities and Exchange Commission (SEC) last year—which took effect in December—requiring public companies to disclose the nature, scope, timing, and impact of cybersecurity incidents deemed to be material within four business days.
The initial statement:
On December 13, 2023, VF Corporation (“VF” or the “Company”) detected unauthorized occurrences on a portion of its information technology (IT) systems. Upon detecting the unauthorized occurrences, the Company immediately began taking steps to contain, assess and remediate the incident, including beginning an investigation with leading external cybersecurity experts, activating its incident response plan, and shutting down some systems. The threat actor disrupted the Company’s business operations by encrypting some IT systems, and stole data from the Company, including personal data. The Company is working to bring the impacted portions of its IT systems back online and implement workarounds for certain offline operations with the aim of reducing disruption to its ability to serve its retail and brand e-commerce consumers and wholesale customers. VF-operated retail stores globally are open, and consumers can purchase available merchandise, but VF is experiencing certain operational disruptions. Consumers are able to place orders on most of the brand e-commerce sites globally, however, the Company’s ability to fulfill orders is currently impacted. The Company, along with its external cybersecurity experts, continues to work diligently to respond to and mitigate the impact from the incident, and has notified and is cooperating with federal law enforcement.
As the investigation of the incident is ongoing, the full scope, nature and impact of the incident are not yet known. As of the date of this filing, the incident has had and is reasonably likely to continue to have a material impact on the Company’s business operations until recovery efforts are completed. The Company has not yet determined whether the incident is reasonably likely to materially impact the Company’s financial condition or results of operations.
The modified statement:
As disclosed in the Original Report, on December 13, 2023, VF detected unauthorized occurrences on a portion of its information technology (IT) systems. Upon detecting the unauthorized occurrences, VF immediately began taking steps to contain, assess and remediate the cyber incident, including beginning an investigation with leading external cybersecurity experts, activating its incident response plan, and shutting down some systems. As a result of these and other measures, and while VF’s investigation and remediation efforts remain ongoing, VF believes the threat actor was ejected from VF’s IT systems on December 15, 2023. VF has notified, is cooperating with, and will continue to cooperate with and notify, federal law enforcement and the relevant regulatory authorities as required under applicable law.
As of the date of this Amendment, VF-operated retail stores, brand e-commerce sites and distribution centers are operating with minimal issues. After VF shut down some of its systems, VF experienced disruption to certain of its operations, including interrupted replenishment of retail store inventory and delayed order fulfillment which had impacts such as the cancellation by customers and consumers of some product orders, reduced demand on certain of its brands’ e-commerce sites, and delay of some wholesale shipments. Since the filing of the Original Report, while VF is still experiencing minor residual impacts from the cyber incident, VF has resumed retail store inventory replenishment and product order fulfillment, and is caught up on fulfilling orders that were delayed as a result of the cyber incident. Since the filing of the Original Report, VF has substantially restored the IT systems and data that were impacted by the cyber incident, but continues to work through minor operational impacts.
Based on VF’s preliminary analysis from its ongoing investigation, VF currently estimates that the threat actor stole personal data of approximately 35.5 million individual consumers. However, VF does not collect or retain in its IT systems any consumer social security numbers, bank account information or payment card information as part of its direct-to-consumer practices, and, while the investigation remains ongoing, VF has not detected any evidence to date that any consumer passwords were acquired by the threat actor.
While the investigation remains ongoing, as of the date of this Amendment, VF believes that the material impact or reasonably likely material impact on VF is limited to the material impacts on VF’s business operations disclosed in the Original Report which are no longer ongoing at this time. As of the date of this Amendment, VF also believes the impacts of the cyber incident are not material and are not reasonably likely to be material to its financial condition and results of operations.
VF will be seeking reimbursement of costs, expenses and losses stemming from the cyber incident by submitting claims to VF’s cybersecurity insurers. The timing and amount of any such reimbursements is not known at this time.
