WITH SOFTENING SALES, LAYOFFS HIT MAKERS
Byline: Karyn Monget
NEW YORK — While innerwear has been riding high the past couple of years, the lackluster climate at apparel stores this spring and summer, as well as a falloff in megabrand sales, has apparently forced several large manufacturers to rethink their workforce levels.
In what generally have been called cost-saving measures, three major innerwear makers have cut back their workforce: the Bali, Playtex and Specialty Intimates units of Sara Lee Intimate Apparel; Wacoal America, the U.S. arm of Kyoto-based Wacoal Japan, and The Warnaco Group.
Sara Lee’s Bali, Playtex and Specialty Intimates divisions in the U.S. laid off 37 employees last week, primarily in the merchandising and sales areas, said Charles L. Nesbit, president and chief executive officer of Sara Lee Intimate Apparel.
“Over the past year, Sara Lee Intimates has been consolidating some of Bali’s and Playtex’s manufacturing and administration functions to eliminate redundancy and maximize efficiencies, thereby lowering costs and increasing competitiveness,” Nesbit said in a statement. “Last year, we focused on operations. At the end of June, we accelerated administrative changes under consideration, primarily due to current softness and ongoing consolidation in the retail trade.”
A spokeswoman at Sara Lee’s distribution headquarters in Winston-Salem, N.C., said 59 employees also were cut from Sara Lee’s operations in Canada.
“Consolidation of the retail trade is much more advanced in Canada than in the U.S.,” she said, noting that growth of the intimate-apparel market is “slower” in Canada, and the recent Chapter 11 filing of Eaton’s department stores has impacted marketplace dynamics.
Meanwhile, Warnaco, which refinanced deals with banks last week, said last week it expected to take an aftertax charge of $60 million to $70 million in the second quarter, relating to cost-saving initiatives recently launched; they include plant consolidations, consolidating finance and manufacturing operations, and a 10 percent reduction of its worldwide workforce, as reported.
Last year, Warnaco and its subsidiaries employed about 21,000 people. The company’s core intimate-apparel businesses include foundations by Warner’s and Olga, and Calvin Klein Underwear for men and women.
At Wacoal, 40 employees were dismissed last month in the areas of administration, sales, merchandising and design. The company produces foundations bearing the prestige Wacoal label and the licensed Donna Karan Intimates and DKNY Underwear collections.
Richard Murray, president of Wacoal America, said, “Our business has grown 300 percent since ’95. But you have to deal with the way the facts are today. The business climate in the year 2000 isn’t as easy as we expected it to be, and the designer megabrands are not doing as well as everybody anticipated.
“But we have a responsibility to the parent company and the shareholders. You do what you have to do to maintain your earnings.”
Overall, the intimates business at retail grew more than $12 billion in the first six months of 2000 — from $8.5 billion in all of 1994.