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Russell Corp to axe 2,300 jobs, restructuring may cost $52mn

20 Jan '06

2 min read

Leading athletic apparel brand Russell Corporation has announced a major restructuring that includes a number of specific actions developed to improve the company's long-term competitiveness.

The after-tax cost of the restructuring is expected to be $45 million to $52 million, with projected annualized pre-tax cost savings in the $35 million to $40 million range, or approximately $22 million to $26 million on an after- tax basis.

Approximately one half of the charges are expected in the 2006 fiscal year, with approximately 20 percent of the savings expected to be realized in 2006, approximately 80 percent in 2007, and the full impact in 2008 and beyond.

The restructuring will be combined with focused marketing efforts, improved asset utilization and efficiency improvements, which should lead to increased sales, higher margins and improved profitability.

The goal of these actions is to favorably impact ongoing financial results in 2006 and, more importantly, to better position the company for 2007 and beyond.

The restructuring plans will impact approximately 2,300 positions globally, including 1,700 in the US, of which approximately 1,200 will eventually be replaced in Honduras and Mexico.

Chairman and CEO, Jack Ward said, "We are making these structural changes in our businesses to remain competitive in today's global market place. These changes will result in our having fewer, larger facilities. We must move quickly to achieve lower costs, both in our operations and our support areas."

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