DUTY FREE SETS MAJOR REALIGNMENT
RIDGEFIELD, Conn. — Duty Free International Inc., which operates duty-free stores in the U.S., will take a $53.7 million charge against third-quarter earnings to cover costs of a major restructuring and a writedown of assets.
A spokeswoman said the restructuring includes cutting the work force from about 2,000 people to 1,800. Direct operating costs, which totaled $113.4 million in the last fiscal year, should decline by about $7.4 million annually. The company, based here, is also shutting 23 stores, bringing the total down to 158 units. In addition to retail stores on the U.S. borders with Canada and Mexico, Duty Free operates shops in airports and runs a wholesale business. It also sells merchandise on international flights and cruises. In its fiscal year ended Jan. 31, the company earned $27.4 million, or $1.01 a share, on sales of $376.4 million.
However, declining profits and rising costs prompted the restructuring, the spokeswoman said. In the second quarter, selling, general and administrative expenses as a percentage of sales jumped to 35.4 percent from 29.5 percent a year earlier.
Profits in the quarter ended July 31 slumped 49.1 percent to $4.1 million, or 15 cents, from $8 million, or 29 cents.
— Fairchild News Service