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Intimate apparel marketer Maidenform to cut 24 jobs

19
Jan '09
Maidenform Brands Inc announced that it will take a charge of $0.03 per share in the fourth quarter of 2008 for a strategic workforce restructuring of 9% of corporate staff. In connection with this announcement, the Company provided an update on sales and earnings guidance for 2008.

Revised earnings guidance: Maidenform expects to report full year earnings per share (EPS) of $1.02 to $1.04. Reported EPS is expected to include $0.06 per share for the start-up investment in the Company's Donna Karan and DKNY businesses, $0.03 per share for the workforce restructuring announced, and $0.02 per share for one-time costs associated with the voluntary retirement of Maidenform's previous CEO.

Excluding the fourth quarter 2008 restructuring charge of $0.03, the Company's revised full year EPS guidance range of $1.05 to $1.07 compares to its previous guidance of $1.17 to $1.21 per share. The reduced earnings forecast is a direct result of the global economic slowdown and costs associated with the workforce restructuring. The Company is providing severance payments and outplacement assistance to 24 affected employees.

Maidenform expects to report net sales for 2008 of approximately $413 million, down 2% from $422 million in 2007.

The Company had previously estimated net sales in the range of flat to down 1% from 2007 but these projections and the Company's gross margin rates were impacted late in the fourth quarter of 2008 by overall weakening consumer demand, and a greater emphasis by our customers to reduce inventories and increase promotional activity in the face of the global economic crisis and challenging market conditions. Notwithstanding these expected results, the Company ended the 2008 fiscal year with approximately $40 million of cash and net debt of $48 million with no material maturities until 2014.

Maurice S. Reznik, Chief Executive Officer, stated, "The decision to eliminate positions is always a difficult one, but during these unprecedented economic times, we must take every action now to control those things that are within our power, including our overhead costs, inventories and execution against our strategic initiatives.”

“Despite the macro-economic pressures, we are focused on growing our market-leading shapewear franchises and continued expansion of our products in the mass merchants channel. We believe these actions, along with our upcoming department and specialty store launches of Donna Karan and DKNY and our major, patent pending launch of Total Solution products in the first quarter of 2009 leave us well positioned to grow our business and weather this storm."

Maidenform Brands Inc


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