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Danier Leather to reduce its domestic manufacturing capacity

08
Apr '09

Danier Leather Inc. announced initiatives to reduce costs and position it for improved financial performance.

Mr. Jeffrey Wortsman, President and Chief Executive Officer of Danier Leather Inc. stated: "In light of the current uncertain business and economic environment, we are taking the necessary steps to reduce our costs while continuing to execute our strategy of providing our customers with exciting merchandise at remarkable prices and value."

Danier is implementing a number of initiatives to reduce costs including:
- Head office staff - Danier's 130 person head office staff will be reduced by approximately 22 individuals for anticipated annualized savings of approximately $1.3 million. A one-time charge of approximately $0.6 million for severance payments for the affected employees is expected to be recognized in the third quarter.

- Domestic manufacturing - Approximately 13% of Danier's garments are produced at its manufacturing facility in Toronto. Danier will be reducing its domestic manufacturing capacity by approximately 50% resulting in a workforce reduction of approximately 56 employees. The workforce reduction is anticipated to reduce Danier's domestic manufacturing cost base by approximately $1.3 million. A one-time charge of approximately $0.8 million for severance payments for the affected employees is expected to be recognized in the third quarter. The domestic manufacturing process has been reengineered to be more flexible and allow for faster turnaround. In addition, capacity can be scaled up should volume requirements increase in the future.

Mr. Wortsman added, "The Company remains committed to work towards achieving sustained profitability. In addition to these initiatives, other expenses will be examined with a view to maximizing operational efficiency at Danier."

Danier Leather Inc. is a leading integrated designer, manufacturer, and retailer of high-quality leather and suede clothing and accessories.

Danier Leather Inc

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