Home / Knowledge / News / Apparel/Garments / Phillips-Van Heusen lays off 400, cuts Q4 outlook

Phillips-Van Heusen lays off 400, cuts Q4 outlook

22
Jan '09
Phillips-Van Heusen Corporation announced that it has initiated a series of actions to respond to the current economic conditions by restructuring certain of its operations and implementing a number of other cost reduction efforts. The actions being taken are projected to result in annualized pre-tax savings of approximately $40 million.

The Company will incur a charge of approximately $55 million after-tax, or approximately $1.05 per share, of which $50 million, or $0.96 per share will be incurred in the fourth quarter of 2008 with the balance in 2009. On a pre-tax basis, the total charge is approximately $85 million, of which approximately $60 million covers non-cash items, primarily the write-off of retail store fixed assets, and $25 million represents cash expenses principally related to severance and lease terminations.

The restructuring initiatives include the decision to downsize the Company's retail operations, resulting in impairment charges for approximately 175 stores. Other actions include the shutdown of domestic production of machine-made neckwear, a realignment of the Company's global sourcing organizational structure, reductions in warehousing capacity as well as other initiatives to reduce travel, payroll, marketing and administrative expenses.

In connection with these actions, approximately 250 salaried positions, representing over 10% of the Company's salaried workforce, and approximately 150 hourly neckwear manufacturing positions have been eliminated. The salaried position reductions are principally at corporate headquarter locations in New York City and Bridgewater, New Jersey and the manufacturing position reductions are in Los Angeles, California. There will also be a number of store associates impacted as the impaired stores close over an expected two to three year time frame.

The Company is also updating its earnings guidance for the fourth quarter and year ending February 1, 2009. Given the difficult Christmas and post-Christmas retail environment, the Company currently expects earnings per share on a non-GAAP basis to be between $0.25 and $0.30 for the fourth quarter and $2.90 and $2.95 for the full year 2008. These estimates exclude both the restructuring charges outlined above, as well as the previously announced costs associated with the shutdown of the Company's Geoffrey Beene outlet retail division. On a GAAP basis, the Company is estimating a loss per share of between $0.74 and $0.79 for the fourth quarter and earnings per share of between $1.69 and $1.74 for the year. (Please see GAAP to non-GAAP reconciliation later in this release.) As previously announced, the Company intends to give 2009 guidance in conjunction with its fourth quarter earnings release in March.

Revenue for the fourth quarter is projected to be between $585 million and $590 million, relatively flat with last year, with full year revenue estimated at $2.5 billion. Comparable store sales for thefourth quarter have been revised and are now estimated to be down between 8% to 10% versus the prior guidance of down 8% to 13%. Calvin Klein royalty revenue for the fourth quarter is projected to be relatively flat to the prior year, in line with prior guidance, as revenue growth in local currency will be offset by the negative effect of foreign exchange. Wholesale revenue is expected to be up slightly to last year, but will fall short of previous estimates, reflecting the sluggish sales environment during the fourth quarter.

The Company expects to end the year with a strong balance sheet, with an estimated $320 million to $325 million in cash, after making a voluntary pension contribution of approximately $25 million. Additionally, there are no debt maturities until 2011 and significant availability under its revolving credit facility, which is in place until mid-2012.

Phillips-Van Heusen Corporation


Must ReadView All

Vietnamese side of the border crossing with Hekou, China. Pic:  Klodien | Dreamstime.com

Textiles | On 27th Nov 2021

Efforts on to boost trade between Chinese & Vietnamese provinces

Trade agencies of Lao Cai province in the northwest region of Vietnam ...

Pic: Shaja | Dreamstime.com

Textiles | On 27th Nov 2021

US’ imports of polyester textured yarn to drop in coming months

The US’ imports of polyester textured yarn of HS code 540233 are...

Pic: Tatiyana Akimova | Dreamstime.com

Textiles | On 27th Nov 2021

Sri Lanka’s textile & garment exports on path to cross $5bn this year

After registering a steep fall of 21 per cent year-on-year to $4.423...

Interviews View All

Gaurav Davda, Jindal Worldwide Ltd

Gaurav Davda
Jindal Worldwide Ltd

Indian MMF sector to become globally competitive

Textile Industry, Head honchos

Textile Industry
Head honchos

Multi-functional garments will be next big thing

International apparel brands, Head honchos

International apparel brands
Head honchos

Launched first collection at onset of Covid

Susan Bhaktul,

Susan Bhaktul

Established in 2000 as a liaison with the Government of India, Industree...

Simone Morgante,

Simone Morgante

Based out of Como, Italy, and with technological expertise of nearly 70...

Yawer Ali Shah,

Yawer Ali Shah

Synthetic colours and dyes were all the rage till the very first ban on...

Daniel Kaye, RocketLife

Daniel Kaye
RocketLife

<div>RocketLife, an award-winning developer of breakthrough visual...

Kevin Young & Tom Lucas, Web Industries

Kevin Young & Tom Lucas
Web Industries

Web Industries is a precision formatter of nonwoven materials used in baby ...

Shlomzion Chen, Seevix

Shlomzion Chen
Seevix

Seevix Material Sciences Ltd, which develops and manufactures synthetic...

Seema Gujral, Label Seema Gujral

Seema Gujral
Label Seema Gujral

<b>Seema Gujral</b>'s designs for her eponymous label revolve around...

Anju Modi, Label Anju Modi

Anju Modi
Label Anju Modi

Filmfare Award winner for best costume designer,<b> Anju Modi </b>is...

Manish Malhotra, Label Manish Malhotra

Manish Malhotra
Label Manish Malhotra

A multitalented designer and founder of an eponymous label, Manish...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


November 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search