VF RESTRUCTURING COST TO RISE TO $150M
NEW YORK — VF Corp. said Tuesday that after a further analysis of operations it plans to increase its fourth-quarter restructuring charge to $150 million from the $80 million originally projected.
The company said it has found more ways to improve its competitive position, and the news of the heightened charge apparently did not discourage investors. VF’s stock on the New York Stock Exchange Tuesday rose 1/2 to close at 52.
As reported in mid-October, the apparel giant said it expected to take an $80 million charge in the fourth quarter to close plants, cover production downtime costs, align inventory levels with demand and reduce selling and general administrative expenses. The Wyomissing, Pa.-based firm said Tuesday that its analysis has “continued and intensified in the last several weeks, resulting in the identification of further opportunities to reduce costs.”
VF noted that the revised restructuring plan should result in annual savings of $80 million, up from the $40 million expected under its previous plan.
The company will report profits and sales for the fourth quarter and year ending Dec. 30, 1995, on Feb. 13. In the fourth quarter ended Dec. 31, 1994, VF earned $74.9 million, or $1.15 a share, on sales of $1.29 billion.
To date, VF noted, it has announced the closing of nine plants with a reduction of about 3,800 employees. A company spokeswoman said there will probably be additional plant closings tied to the new program, and the company will announce specific closings as each division continues its investigation. “We recognize that this represents a significant change from our previous estimate,” said Lawrence R. Pugh, chairman and chief executive officer, in a statement, but he added that the company wants to keep shareholders aware of the most-up-to-date progress report on the restructuring program. Pugh added, “Our accelerated move toward a more balanced and lower cost manufacturing base should significantly improve our competitive position in 1996 and beyond and enable us to offer greater product value to customers.”
He also said VF is “aggressively attacking” its selling and administrative expenses, with a reallocation of dollars toward global marketing of its brands.
VF’s products include such names as Lee, Wrangler and Girbaud jeans, Vanity Fair innerwear, Jantzen swimwear, Healthtex children’s wear and Bassett-Walker activewear.
The nine plants already cited for closing are two Vanity Fair Mills sewing facilities, one each in Robertsdale and Butler, Ala.; a cut-and-sew plant in Monroeville, Ala., also serving Vanity Fair Mills; two Lee plants, one each in St. Joseph, Mo., and Fayetteville, Tenn.; Wrangler plants in Newbern and Troy, Tenn., and Lonoke, Ark., and a Cutler plant in Oxford, Miss.