Athletic footwear and apparel manufacturer Saucony Inc revealed on Monday it will lay-off around 40 workers at its factory in Bangor, Maine, immediately and stop all manufacturing operations at the plant next month.

In conjunction with the closing, Saucony expects to incur a non-recurring charge in the range of approximately $0.9-$1.1 million, after tax, or $0.15 per share to $0.18 per share, in the fourth quarter of 2001. The majority of the charge is for employee severance and related costs as well as a write-down of equipment.

Since 1972, the factory was used primarily to assemble certain of the company's footwear. In order to remain cost competitive, more and more production was moved to suppliers in Asia over the years. Going forward, the Company will outsource essentially all of its footwear production to its suppliers in Asia.

John H Fisher, president and chief executive officer, said, "It was a difficult decision to shut down the facility because of our longstanding relationship with the Bangor community and domestic footwear manufacturing dating back to 1906.

"This represents another significant step in our ongoing effort to streamline operations and better position Saucony for the future. We will now be able to focus entirely on our core competencies, namely, designing, developing and marketing around the globe, the highest quality technical, performance-driven footwear."

Beyond providing severance and related benefits the company stated it intends to apply to the US Department of Labour for certification of its Bangor employees under the Trade Adjustment Assistance Program. This program provides workers with additional training and extended income benefits.

Saucony Inc designs, develops, sources and markets a broad line of athletic shoes under the Saucony brand name, athletic apparel under the Hind brand name, athletic shoes under the Spot-bilt name and casual footwear under the Hyde name.


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