Thursday, November 15, 2001

Jeans-maker to cut 13,000 jobs

The Associated Press

        GREENSBORO, N.C. — Apparel giant VF Corp., maker of Lee and Wrangler jeans, Wednesday said it plans to lay off 13,000 people, or 18 percent of its work force, as part of a major restructuring.

        VF, based in Greensboro, said it will take a $280 million to $320 million charge in the fourth quarter, or $1.74 to $1.98 a share, as it drops its swimwear, private-label knitwear and specialty work-wear businesses.

        The company also announced plans to move additional production to lower-cost manufacturing areas and consolidate its domestic intimate apparel headquarters in one location.

        VF said the actions would reduce its costs by $115 million annually and affect about 13,000 of its 71,500 employees worldwide.

        Analyst Thomas J. Lewis, who follows the company's stock with C.L. King & Associates, said the restructuring gets VF out of some unprofitable businesses and gives it more revenue to build up its successful lines.

        “It's a reassessment of what they are really good at,” he said.

        VF Chairman Mackey J. McDonald said economic conditions left the company no choice.

        “Our profitability remains at healthy levels, our cash flow is strong and our balance sheet is powerful; yet our return on capital has declined in recent years,” he said.

        VF will drop its private-label knitwear business, operated from a plant in Martinsville, Va. It will retain its licensed sportswear business based in Tampa, Fla. And it will combine its Martinsville-based wholesale screen-print knitwear business with its work-wear and uniform operations based in Nashville, Tenn.

        It also will sell its Jantzen swimwear business, based in Portland, Ore. And it will leave a small specialty work-wear business.


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- Jeans-maker to cut 13,000 jobs
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