USA: Paxar Announces Restructure
Paxar Corporation announced today that it has taken specific actions to enhance revenue growth, increase capital efficiency and lower operating costs. These actions are reflective of the major shift in the retail and apparel industries towards global sourcing and consolidation and the corresponding emphasis on logistics and supply chain management.
Paxar has begun the process of combining its core businesses in North America, focusing on creating a powerful platform for Paxar to deliver solutions that range from "concept to consumer" to its retail and apparel customers. What had been separate Apparel Identification and Labeling Solutions business units will operate under one leadership team leveraging the company's strong relationships in the retail and apparel sectors and enhancing the company's global "one-stop shop" offering of products and services
Paul Griswold, president and chief operating officer, said: "By managing our North American operations as one business, we are able to unify our sales and marketing teams, presenting one face to our customers."
Paxar announced that it will streamline its manufacturing facilities in North America and Europe by consolidating production sites. Simultaneously, the company is aggressively expanding in geographies where its customers want to do business. Specifically, significant productive capacity has been added in China, Sri Lanka and Turkey; and additional capacity is planned in the near future for Mexico.
As a result of these several strategic initiatives, the company will report a restructuring charge of approximately $11-12m ($0.18-0.20 per share) in 2001 to cover severance costs for approximately 300 employees, personnel and equipment relocations, asset write-offs and other associated costs. Approximately $6.6m ($0.11 per share) will impact the second quarter and the remainder will be reported as incurred in the third and fourth quarters. Beginning in 2002, the company estimates annual savings of approximately $8m.
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