Fashion house KCP announces $20 mn of annual cost reduction

04 Mar '09

5 min read

Jill Granoff, Chief Executive Officer of Kenneth Cole Productions Inc, commented, "We are realigning our organization and redeploying resources in support of our strategic business plan. It's important to understand that the majority of our cost cutting activities are not just about reducing expenses. They are part of a comprehensive plan to create a more efficient and effective company that will drive increased value to our consumers, our partners, our customers and our shareholders."

The Company noted that cash provided by operations during 2008 was nearly $22 million, resulting in a year-end cash balance of $65 million, up approximately $15 million from the end of the third quarter. Although cash at year-end is $26 million lower than the fiscal 2007 year-end level, the Company used approximately $37 million of cash for the acquisition of Le Tigre, dividend payments and the repurchase of 1.6 million common shares over the course of the year. In addition, the company noted that it has no long-term debt.

The Company also announced that its Board of Directors has decided to suspend the Company's quarterly dividend. The Company noted that it considered this a prudent and responsible course of action to preserve and manage liquidity in a highly uncertain environment. The Company indicated that it is willing to revisit this decision as conditions change. Previously, the Company paid a quarterly dividend of $0.09 per share.

Ms. Granoff concluded, "We are fortunate to have a strong brand with high levels of consumer affinity and a very healthy balance sheet. While the general economic outlook for 2009 continues to be challenging, we have taken the appropriate actions to improve profitability and conserve cash so that we can weather this downturn and accelerate growth when the economy rebounds."

Kenneth Cole Productions Inc

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