USA: Burlington Axes Jobs And Sells Mexican Factory
Burlington Industries, Inc (NYSE: BUR) announced today that its board of directors has approved a five-point plan designed to strengthen the company's future profitability and financial flexibility. This plan will result in a 4th quarter charge for restructuring, asset write downs and impairment of approximately $65-75m, including approximately $15m of cash costs, primarily for severance and lease cancellation fees. The company will also incur approximately $13m of runout charges related to this restructuring, primarily in the first two quarters of fiscal 2001. In addition, as a result of a change in accounting, the company will write off all historic enterprise goodwill with a 4th quarter non-cash charge of approximately $464m.George W. Henderson, III, chairman and CEO, said: "We have outstanding capabilities within Burlington, but our performance this year is disappointing. Our results are due both to our own performance shortfalls as well as difficult market dynamics in some of the markets we serve. We are capable of doing better and we are committed to improving results."Henderson noted that current challenges include the casual dressing trend, a drop in exports to Europe because of the weakness of the Euro, price competition in denim, and retailers' efforts to reduce their inventories of interior furnishings products.Douglas J. McGregor, president and COO, said: "The steps outlined in our five-point plan will give us the needed framework to improve our profitability and increase shareholder value. These actions are painful but essential for our long-term success."
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