Shares of VF Corp., the owner of popular brands such as The North Face and Vans, plummeted on Monday following the company's announcement of a cybersecurity breach that could have a major impact on its holiday season operations.

The breach, which affected some of VF Corp.'s systems, is believed to be a ransomware attack, although the company has not confirmed this. Hackers encrypted certain systems and gained access to personal data, potentially aiming to extort a hefty payment from the company. The incident was reported on the same day that the U.S. Securities and Exchange Commission's new cyber disclosure rules took effect, which require companies to report significant cybersecurity incidents within four days.

VF Corp. first identified the hackers in its system on December 13, demonstrating a quick response in identifying the threat's material impact. As a result of the breach, the company's ability to fulfill holiday orders has been affected, although customers can still place orders online. The full extent of the attack is still unknown, and VF Corp. expects it to continue to have a material impact until recovery efforts are completed.

The new SEC rules aim to provide investors with a clearer understanding of how cyberattacks can harm businesses. Prior to these regulations, companies like Caesars Entertainment had the option to handle breaches quietly, such as when Caesars paid a $15 million ransom after being breached earlier this year. Only after MGM Resorts experienced a similar attack did Caesars disclose its own breach. Under the new rules, Caesars would likely have been obligated to report the incident and payment promptly.

Law enforcement agencies and regulators discourage companies from paying ransoms, despite the disruptive effects of cyberattacks. However, many companies opt to pay in order to mitigate the damages caused. VF Corp. joins a growing list of major companies, including Caesars, MGM, and Clorox, that have fallen victim to cyberattacks leading to disruptions in their operations this year.

The breach comes as VF Corp. gears up for the crucial holiday shopping period, adding further pressure to recover and secure its systems swiftly. As recovery efforts continue and investigations uncover the full scope of the attack, VF Corp. faces challenges in maintaining customer trust and ensuring seamless operations during this critical season.

The impact of this cybersecurity breach on VF Corp.'s financials and overall business performance remains to be seen, but investors have already shown their concern, reflected in the more than 7% drop in VF Corp.'s stock price on Monday. The incident serves as a stark reminder of the increasing threats posed by cybercriminals and the necessity for companies to strengthen their cybersecurity defenses in order to protect their operations and stakeholders.

Note: This article is generated based on the provided information only and does not include any additional research or news updates.