United States Of America : Broder Bros announces workforce reduction

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Broder Bros announces workforce reduction

15
Dec '08

Broder Bros Co announced that it has eliminated approximately 140 positions in its distribution centers, call centers, management and other corporate functions.

The Company initiated headcount reductions in anticipation of a further weakening in the U.S. economy. Although the Company has gained market share in recent quarters and anticipates continued market share gains, the Company believes revenue and gross profit will decline in the fourth quarter of 2008 compared to 2007 and for at least part of 2009 compared to same periods in 2008 due to the softened demand for the Company's products.

While the Company remains optimistic about its ability to continue to grow sales of lower-priced products, it is concerned about continuing declines in demand for higher-priced products. The reduction in personnel expenses is structural and will reduce both variable costs and fixed expenses.

The new structure allows the Company to compete effectively in a challenging market environment and remain a vigorous enterprise.

“While saddened by the loss of many of our talented employees, we are responding to the conditions we see in the market and to our commitments to customers, suppliers, and investors,” said Thomas Myers, the Company's Chief Executive Officer.

Due to the reduction in workforce, the Company expects to recognize restructuring charges for severance and related benefit costs totaling approximately $0.8 million to $1.0 million before income taxes in the fourth quarter of 2008.

Broder Bros Co owns and operates three leading brands in the imprintable sportswear industry: "Broder," "Alpha" and “NES.” Through these three long-standing and well-recognized industry leaders, the Company operates the largest distribution network in the industry, which consists of eight major distribution centers and ten “Express” facilities offering pick-up room service.

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