Underwear and apparel maker Hanesbrands Inc is to stop production at three sewing and assembly operations in the Dominican Republic - a move that will lead to the loss of 1,400 jobs.

The Winston-Salem, North Carolina based company, whose brands include Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra, said the closures are a part to reduce costs by consolidating into fewer, more efficient facilities.

Production in Itabo will end by September 2007, and Hanesbrands on Thursday (3 May) said it expects the restructuring to cost around $3m dollars.

Gerald Evans, Hanesbrands executive vice president and chief global supply chain officer, said: "This was a difficult decision driven by competitive business needs and a compelling opportunity to take advantage of cost reduction.
"We continually review how to remain most competitive in every country and region around the world in which we operate, particularly as we begin to add operations in Asia to balance our supply chain in the western hemisphere.

"A key opportunity for us is to operate fewer facilities that are larger in order to most effectively utilise our assets."

Since its spinoff from consumer goods giant Sara Lee as an independent company in September 2006, Hanesbrands has closed 10 manufacturing facilities in the Dominican Republic, Mexico, Puerto Rico, and the US, with the loss of more than 3,200 jobs.

Last week the company reported an 83.9% drop in first-quarter profits to US$12m, blaming large increases in restructuring costs - $16.2m versus $1.3m a year ago - for the fall. The business also continues to deal with a large amount of long-term debt, which fell only a fraction, to $2.475bn from $2.484bn as of 30 December.

In the past two years, Hanesbrands has added newer, lower-cost textile production in the Dominican Republic and Central America and is aligning its sewing operations around those fabric production centres. In October the company also bought its first Asian sewing plant near Bangkok in Thailand, where around 1,600 workers make bras. 

In addition to the sewing operations in Itabo and the new Dos Rios textile manufacturing plant in Bonao, Hanesbrands has six other sewing and intimate apparel assembly operations in the Dominican Republic.