Spiegel Inc. has started firing nearly half of its combinedcorporate and Spiegel Catalog work force to reduce red ink and makethe catalog more appealing to a buyer, the bankrupt retailerannounced Tuesday.
The layoffs of 255 employees, or 46 percent of Spiegel Inc.'scorporate and Spiegel Catalog work force, started Tuesday and willcontinue for two months.
The job cuts involve 70 who work as support staff at the DownersGrove headquarters and in the Information Services division, and 185who work for the Spiegel Catalog unit, said Spiegel Inc. spokeswomanDebbie Koopman. Some of the employees to be laid off work at a datacenter in west suburban Westmont.
The cuts will leave 265 employees at Spiegel Inc.'s headquartersand 30 associated with the 99-year-old Spiegel Catalog.
Spiegel Inc.'s green-glass headquarters building, at 3500 LaceyRoad in Downers Grove, is for sale.
The latest downsizing means Spiegel Inc. has cut a total of 2,600jobs, or 18 percent of its work force, since it filed for Chapter 11bankruptcy protection on March 17, 2003.
Many people lost jobs at stores and call centers that Spiegel Inc.closed after it filed for bankruptcy protection. Spiegel Inc. hasannounced plans to close 21 Spiegel and Newport News outlet stores,100 Eddie Bauer retail stores and two call centers that handlecustomer orders.
Spiegel Inc. also has lost many of its executives. The latest togo is John R. Steele, who resigned last week as its treasurer. He hadheld the job for 11 years.
The Spiegel Catalog's fate is uncertain, despite Spiegel Inc.'sreassertion Tuesday that it is talking with a potential buyer.
"There can be no assurance" that the Spiegel Catalog will be sold,Spiegel Inc. said in its statement issued Tuesday.
Even if it is sold, a buyer would not have hired the majority ofSpiegel Catalog's work force, Spiegel Inc. said in explaining thelatest job cuts.
Retail analysts first speculated that the Spiegel Catalog mightdisappear on the day Spiegel Inc. filed for bankruptcy protectionafter its loose credit policies and unpaid credit-card bills led toits downfall.
Nevertheless, sources have speculated that buyers could includebig retailers like Target or Kohl's, which would leverage SpiegelCatalog's Internet presence and direct-marketing infrastructure, orPangea Holdings Ltd., a private-investment firm that has agreed tobuy Spiegel Inc.'s Newport News mail-order and Internet business.
One of Pangea Holdings' three partners is Christian Feuer, aformer marketing vice president at both Spiegel and Newport News.
However, one source close to the negotiations said each of thethree Spiegel Inc. units could be bought and then sold to someoneelse.
Spiegel Inc. does not break down losses for the Spiegel Catalog byitself, but the company's sales results for March showed catalog ande-commerce sales decreased 20 percent from the year-earlier period,reflecting lower sales for Eddie Bauer and Spiegel Catalog, offsetsomewhat by sales growth for Newport News.
Spiegel Inc., whose finances still are under investigation by theSecurities and Exchange Commission, reported an operating loss of $93million on sales of $1.7 billion for the 2003 fiscal year ended Jan.3.
Meanwhile, the Otto family, which owns 89 percent of Spiegel'sshares, would like to keep the Eddie Bauer unit of Spiegel Inc.,according to a source close to the Otto Group.
No comments:
Post a Comment