Russell Corporation has expanded its restructuring programme in an attempt to improve its global competitiveness.

Included in the latest announcement are plans to align the organisation by distribution channels to provide stronger focus on customer service, supply chain management and cost-effective operations. The new strategic business units will be the mass merchandise channel, artwear or wholesale distributor channel, and department/specialty stores. Russell Fabrics and Russell International will continue to operate as separate divisions.

As part of this reorganization, the current Cross Creek Apparel artwear business headquartered in Mt Airy, North Carolina, will be combined with the artwear business headquartered in Atlanta. The Cross Creek private label business and textile operations will remain in Mt Airy. The company had recently announced that it would restructure the Cross Creek brand for golf and specialty stores and license the brand name for those channels.

Additionally, Russell has signed a letter of intent with Frontier Spinning Mills of Sanford, North Carolina, to take over the company's yarn operations. It is anticipated that a final agreement will be concluded for implementation by December 31, 2001.  

The ultimate impact of the additional restructuring and reorganisation is estimated to be in a range of $70 to $80 million after tax, but it should reduce ongoing costs in excess of $20 million annually.

"With the expansion of our plans, announced today, the total cost of restructuring since its inception in mid-1998 is estimated to be in the $220 to $230 million range, after-tax," said Jack Ward, Russell's chairman, president and chief executive officer.

Today's announcement follows a proposal in early June when Russell discussed the closure of a textile facility, two sewing plants and the consolidation of two yarn plants. "Every aspect of these plans is designed to make Russell a stronger leader in the athletic, sportswear and casualwear apparel categories," said Ward.

Specific details will be released over the coming months, after detailed implementation steps have been developed. "Obviously, we have not finalised every decision at this point," Ward added. "Our goal is to continue to communicate with our financial partners, employees and communities each step of the way."