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May 13, 2022updated 16 May 2022 11:28am

EXCLUSIVE: Jobs axed at Coats UK following sale of Brazil, Argentina business

UK apparel manufacturer Coats has exclusively confirmed to Just Style it has made a number of UK-based redundancies and replaced other roles as part of its global strategy - in the same week the company announced the sale of its Brazil and Argentina business.

By Laura Husband

Coats, which describes itself as the world’s leading industrial thread manufacturer, has made some organisational changes to its UK operating model as part of its global strategy, according to an official statement provided to Just Style.

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A spokesperson for Coats told Just Style: “One element of this [strategy] is to ensure that our regional operating activities are closer to our customers. As a result, some roles have been replaced and some have been made redundant.”  

Earlier this week (10 May), Coats announced the sale of its Brazil and Argentina businesses to Reelpar S.A., which is based in Sao Paulo, Brazil.

Coats explained the decision to sell these businesses had not been made lightly, especially given the legacy that Coats had in these countries.

Focus on “strategically important” regions

The company explained: “Coats Brazil has been an integral part of Coats Plc for over 100 years and we are extremely proud of the company and the service it has provided to its customers and communities over many decades. The business enjoys a strong customer base across both B2B and crafts consumer markets, a market-leading stable of brands and experienced, committed employees.”

Coats Group chief executive Rajiv Sharma added: “We believe that, for the Brazil and Argentina business to prosper in the future, it has to reinvent itself to meet the specific needs of the local markets. With this in mind, we felt the best decision to safeguard the future of the organisation was to sell the business to new owners who will be solely focused on the local markets. I would like to take this opportunity to thank all Coats employees in Brazil and Argentina for your continued commitment and wish you all the best for the future.”

Coats pointed out the exit from the businesses in that region is in line with its’ strategic initiatives that were announced in March to accelerate profitable sales growth and transform the company.

The company said it intends to use its strong balance sheet to invest in sustainability, innovation, growth capex and acquisitions.

In March, Coats reported that it had achieved a 3% reduction in waste in 2021 and said 19% of its sales of premium polyester threads were those made of recycled materials in the year.

Reelpar is said to be experienced in building local businesses into profitable enterprises and aims to drive Coats Brazil and Argentina forward.

Following this transaction, Coats said its presence in South America will be focused on Colombia, which continues to be profitable and cash generative.

Coats added the sale will allow the group to focus on profitable sales growth in what it describes as the strategically important regions of Asia, Europe, and North/Central America.

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Free Whitepaper
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What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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