Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 7, 1994 TAG: 9406080022
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: By LON WAGNER STAFF WRITER
DATELINE: LENGTH: Medium
"I don't foresee any loss of jobs at the Salem facility as the result of the restructuring," Director of Operations John Higgins said late Monday. "I'm certainly optimistic about the future of this operation and the company." The distribution center employs 130 people full-time and 30 temporary workers.
But unclear Monday was the fate of employees at Sara Lee Knit Mills in Martinsville. The apparel operations are part of the Chicago-based company's personal-products division, and a spokeswoman acknowledged the need for cutbacks in knitwear production.
A manager at Sara Lee in Martinsville declined to comment on Monday's announcement, although he said the company was talking to employees about "how this restructuring will affect them." He also declined to say how many workers Sara Lee employs in Martinsville.
"The knit products business, as well as the hosiery business, has excess capacity," Sara Lee spokeswoman Anne McCarthy said. "Some operations will be affected; others will just be realigned."
The company said slightly more than half the 8,280 layoffs expected would come from the corporation's U.S. plants and most would come from plants that make and distribute sheer pantyhose, sweatshirts and other knitwear. The job cuts are expected to save the company $250 million a year by 1998.
The company blamed a trend toward more casual women's workwear for the sales slippage in its Hanes and L'eggs hosiery lines. And its Hanes and Champion brand sweatshirts and sweat pants have not sold as well as the company hoped.
"Competition has never been more intense," said Sara Lee Chairman John Bryan. "You're in a very low inflation time with very little pricing flexibility."
Sara Lee, which employs 138,000 people worldwide, announced the restructuring as the result of a fourth quarter pre-tax charge of $732 million, or $1.03 per share after taxes.
The charge includes severance pay for 6 percent of Sara Lee's work force. It also accounts for the cost of closing and consolidating some production and distribution facilities.
Sara Lee announced the restructuring amid expectations that the full-year results it will announce in August will show record earnings and sales.
The company had $14.5 billion in sales in 1993. It sells food and consumer products under a variety of names, including Hanes, L'eggs, Coach, Kiwi, Endust, Bali, Playtex, Hillshire Farm and Jimmy Dean.
Investors reacted favorably to the news, pushing Sara Lee's common stock to $23.621/2 per share, up 871/2 cents from Friday's close. The New York Stock Exchange issue traded 2.3 million shares on Monday.
The Associated Press contributed to this story.
by CNB