Eddie Bauer cuts corporate staff by 16%
Eddie Bauer Holdings Inc. has cut 16% of its corporate staff in a reorganization that has eliminated 123 positions across the company's offices in Seattle, Chicago and Columbus.
The company acknowledged in a recent earnings call that overall costs were too high and that it would be taking action in early 2008 to become more cost-competitive.
“We have taken a major step to streamline the organization, simplify processes and focus our resources on our strategic priorities,” said Neil Fiske, president/CEO of Eddie Bauer, about the recent moves in a statement.
The initiative is part of a broader program to cut $25 million to $30 million out of the company's operating cost structure and put Eddie Bauer on a stronger financial and competitive footing. The company could not immediately be reached for comment.
The changes that have taken place this month include scaling back support functions to “mission critical” operations, re-aligning the merchant team under Kim Berg, the new SVP and general manager, merchandising; moving merchandise planning and allocation under the company's new chief financial officer, Marv Toland; establishing a new sourcing and supply chain group under Ronn Hall, the company's new SVP, sourcing and supply chain and moving all design functions to report directly to Neil Fiske, CEO, including a newly developed Outwear, Activewear and Gear group.
Eddie Bauer also said Tony Krohn has joined the company from The North Face as division VP of research, design and development for Outwear, Activewear and Gear. Joe Moji was named divisional VP of financial planning and analysis.
Earlier this month, Eddie Bauer reported some signs of a turnaround for the company, which has been through several redirections in the past few years. Net merchandise sales increased 3.4% for a total of $378 million for the fourth quarter ended Dec. 29. Comparable store sales increased 4.8 % during the same period and sales from the company's direct channel increased 9.7%.
Preliminary full-year results for 2007 indicate net merchandise sales increased 3.4% for a total of $989 million. Comparable store sales increased 4.4% while sales from the company's direct channel increased 8.3%.
Last February, the company's president/CEO and board member Fabian Mansson resigned after an insufficient number of stockholders voted in favor of approving the company's proposed sale to a holding company formed by Sun Capital Partners Inc. and Golden Gate Capital.
In 2005, Eddie Bauer emerged from the Spiegel Inc. Chapter 11 reorganization process, becoming a fully independent company for the first time in 35 years.