Lingerie company Frederick’s of Hollywood is hoping to save around $2m in annual costs by consolidating its distribution facilities and outsourcing its remaining manufacturing.
As part of its plans, the company yesterday (18 August) said it had stopped production at its facility in the Philippines, which is expected to reduce annual costs by $1.5m.
It is also in the final stages of consolidating its retail and wholesale distribution operations into its 168,000 square foot facility in Phoenix, Arizona – a move that will save around $500,000 a year. The Phoenix facility will serve as the firm’s US distribution, customer contact and information technology centre.
As part of these changes, operations will cease at the wholesale distribution facility in Poplarville, Mississippi by 30 November.
“The latest changes to our manufacturing and distribution capabilities are in line with the strategy we have implemented over the past 18 months, which is aimed at streamlining our operations and reducing costs,” explained CEO Thomas Lynch.
As well as helping to reduce total costs and lifting operating margins, the strategy “will allow us to dedicate more resources to the marketing and design of our products in order to strengthen our brand,” Lynch added.
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By GlobalDataFrederick’s of Hollywood Group, which sells women’s intimate apparel and swimwear through 126 stores nationwide, also designs, manufactures, sources, distributes and sells women’s intimate apparel via its wholesale division.
The company in June delivered its first quarterly profit since revamping its corporate strategy, posting a third-quarter profit of US$0.2m compared to a net loss of $2.1m in the same period last year.
But sales remained depressed, with net revenues dipping 7.2% to $43.4m, and comparable store sales falling 7.7%.
