Cost Reduction News

Cost Reduction News

Daily Cost Reduction News:

Wilsons Leather Announces Aggressive Cost Reduction Initiative

Wilsons The Leather Experts Inc. WLSN today announced that it will embark on a strategy aimed at reducing its mall store base, aggressive cost cutting initiatives, and the launch of a new accessories store concept. As part of this initiative, the Company plans to close up to 160 mall locations that do not fit its go forward strategy. Concurrent with these closures, all remaining 100 stores in the mall division will be remodeled to a new "Studio" concept, which the Company has been testing since last fall in four different regions of the country. This concept will be a brand driven store for women focusing on fashion accessories. Plans are to complete all 100 mall store remodels by August of this year. In this process, approximately 938 store-related positions will be affected. Wilsons Leather Outlet Division will not be affected by this new mall store initiative.

"The decision to take these actions, while very difficult, is the right move for the future of Wilsons Leather," said Mike Searles, Wilsons Leather's Chief Executive Officer. "We expect the cost reduction initiative will enable us to reduce our working capital needs and strengthen our business, as well as provide capital for our remodel efforts to convert all remaining mall stores into our new "Studio" concept. Initial test results for the Accessories business in our new concept stores are very exciting and we look forward to rolling out this concept soon."

Wilsons Leather has begun discussions with landlords related to these store closings and anticipates the inventory liquidation process and resolution of lease termination costs to occur over the next 90 to 120 days. The Company has retained a third-party liquidator and real estate firm to assist in the process.

As part of the launch of the "Studio" concept stores and ongoing cost reduction efforts, the Company will realign the organization to reflect its reduced store base. As a result, the Company will eliminate 64 positions at its corporate headquarters, overseas offices and distribution center in Brooklyn Park, Minnesota.

Cost control boost for Zara owner

Spanish retail group Inditex has reported a 28% rise in nine-month profits, helped by improved control over costs. The group - which owns the Zara fashion store chain - recorded a net profit for the nine months to 31 October of 520.5m euros ($621m; Ł351m).

This was ahead of the average market expectation of 497m euros.

Revenues for the period rose 20% - again on a yearly basis - to reach 4.65bn euros, in line with forecasts.

The company's costs have risen in recent years alongside its fast-paced global expansion, but chief executive Pablo Isla vowed back in September that he would address the issue.

The firm said its fourth quarter, which includes the key Christmas trading period, had started in line with market expectations.

Standard Register Announces Cost Reduction Plan

July 20, 2007

DAYTON, Ohio --(Business Wire)-- Standard Register (NYSE:SR) today completed a restructuring action as part of an overall plan to reduce its annual operating costs by $40 million. Earlier this year, the Company consolidated its manufacturing and warehousing operations in a move expected to save approximately $5 million annually. Today's action eliminated approximately 250 positions, primarily in management and overhead, representing $22 million annually in compensation and related costs. Other new initiatives that target purchasing costs and other non-compensation expenditures are expected to lower costs by an additional $13 million annually.

These actions, including the earlier restructuring, are expected to reduce second half 2007 costs by $15 million versus the levels incurred in the first six months of the year. The remaining balance of the $40 million in annual savings is expected next year. Separation costs associated with today's restructuring are estimated at $3.5 million, which will be recorded in the third quarter.

Revlon Accelerates Cost Reduction and Margin Improvement, with Implementation of Broad Organizational Streamlining

Revlon, Inc. announced a broad organizational streamlining and consolidation that builds on the scope of the Company's restructuring actions implemented earlier in the year and meaningfully accelerates the Company's efforts to reduce costs and improve profit margins. In connection with the announcements, the Company provided its outlook for 2007 and indicated that it plans to discontinue Vital Radiance, due to the new brand not achieving an economically feasible retail platform for future growth. Revlon indicated that it expects these actions to accelerate the Company's path to becoming net income and cash flow positive.

Sierra Announces Cost Reduction Initiative

Sierra, Inc. announced that it is undertaking a corporate restructuring that the Company expects will reduce on-going annualized operating expenses by an estimated $20 to $24 million per year. The Company's decision to initiate cost reduction activities is part of its on-going effort to improve its corporate operating performance and boost productivity across the organization.

Averion to Increase Operating Efficiencies

Cost Reduction Initiative to Improve Competitive Position and Drive Profitability in Second Half of 2007

BOSTON (February 20, 2007) – Averion International Corp. (OTC BB: AVRO), a clinical research organization (CRO) specializing in oncology, medical devices, dermatology and nephrology, today announced a cost reduction initiative intended to increase its operating efficiencies and improve its competitive position. Averion’s new cost structure is expected to support its business growth strategy and assist the Company in improving profitability.

“The initiative is expected to reduce annual operating costs by approximately $2.5 million. In connection with the cost reduction initiative, we expect to record a non-recurring charge of approximately $700,000,” cited Averion Chief Financial Officer Christopher Codeanne.

Cost Reduction is Key Supply Chain Strategy

In a ground-breaking global supply chain survey of 800 companies conducted by Manufacturing Insights, an IDC Company (Framingham, Mass.), results reveal a disconnect between business objectives and supply chain strategy. According to survey findings, the majority of respondents (71%) cited increased quality and customer satisfaction as their top business objective, followed by reducing overall cost and improving productivity (66%), and increasing revenues and exploiting new markets (62%).

Yet, despite the desire to improve service levels, almost half (48%) of respondents cited reducing material, manufacturing, and logistics costs as their top supply chain strategy. “As a whole, it does appear that manufacturing firms surveyed are still looking at a cost strategy in their supply chains, as opposed to speed, flexibility, or service-enhanced supply chain strategies,” says Kimberly Knickle, program director and lead analyst on the survey.