Danier Leather takes steps to cut costs & improve efficiencies

31 May '06

3 min read

High-quality leather manufacturer Danier Leather Inc has announced initiatives to reduce its selling, general and administrative costs and improve operational efficiencies.

The cost reduction initiatives have started to be implemented and the benefits are expected to be realized during fiscal 2007 which covers the period between July 2006 and June 2007.

Jeffrey Wortsman, President and CEO of Danier Leather Inc, said, "We are taking the necessary steps to return the Company to profitability and are employing strategies that focus on our key customers."

Danier is implementing a number of operational efficiency initiatives including:

- Shift in promotional and advertising activities - Danier to place greater emphasis in favor of newspapers flyer inserts, and less transit shelter, billboard and magazine advertising. The company expects to achieve advertising expense reductions of about $2.5 million during Fiscal 2007.

- Staff reductions – Danier has reduced its 136 head office staff by 23 individuals for an annual savings of approx. $1 million. A one-time charge of approx. $0.6 million for severance payments and outplacement counseling for the affected employees will be recognized in the fourth quarter.

- Merchandise planning - Danier is seeking to improve its merchandise planning to include earlier planning and better purchasing. As part of this initiative, it will be hiring for the newly created position of Chief Sourcing Officer who will manage the supply chain.

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