GUESS PLANS TO CUT 170 JOBS
Byline: Thomas J. Ryan
NEW YORK — Guess Inc. said it plans to eliminate 170 jobs, or about 6 percent of its total staff, and enact a company-wide cost reduction program with an aim in saving $8 million in annual expenses.
The moves are expected to reduce payroll and related costs by $4.5 million and general and administration costs by approximately $3.5 million in 1998.
Reached by phone in his Los Angeles office, Maurice Marciano, chairman and chief executive officer, stated that the job cuts are “across the board” and that they include production, design, operating management and support departments as well as the company’s distribution center.
“We have to make some tough, tough decisions; it’s not easy,” said Marciano. “We have to reduce our expenses because business is a little tough, so you have to control your expenses and be much leaner and much more productive.”
Marciano said a hiring freeze was put in place three weeks ago, except for essential jobs.
Guess will continue its search for a chief financial officer and a general merchandise manager for its retail stores.
“We are cutting costs in traveling, in all the fax machines, supplies — in every small element. When you get a lot of dimes it ends up in a lot of dollars,” Marciano said. “Our intention is be much more efficient and basically to reenergize everyone in the company, including management.”
Marciano said the costs of the program will be included in fourth-quarter results. Third-quarter results are due to be reported during the last week in October.
In the half ended June 29, Guess’s earnings slumped 13.9 percent to $22.6 million, or 53 cents a share, from $26.2 million, or 61 cents, before the IPO-related charge a year ago. Including the charge, the year-ago net was $24.1 million, or 53 cents.
Sales slid 1.3 percent to $254.3 million.
Shares of Guess closed Friday at 9 7/16, up 3/16, on the New York Stock Exchange. The news came out after the market closed.