American Wolverine(SEBAGO) to close Dominican Republic factories
www.just-style.com - US footwear business Wolverine Worldwide has decided to pull out of its facilities in the Dominican Republic, which primarily produce products under its namesake and Sebago brands.

CFO Donald Grimes said one factory will close, while the company is "evaluating strategic alternatives" for a second facility in Santo Domingo, including a possible sale to a third party.

"This strategic decision is based on both the benefits of sourcing from larger, more efficient producers and by our desire to focus on our core competencies of creating innovative products and building enduring global lifestyle brands," Grimes told analysts yesterday (8 October). 

The company forecasts annualised pre-tax savings of US$4m from the move, although the 2014 benefit will be a bit lower due to the timing of the contemplated actions. It also expects to incur $7m-10.4m in charges, with most forecast for the fourth quarter.

"All in all, a very positive development for the company and for our shareholders," Grimes added.

The news came as Wolverine Worldwide lifted its full-year earnings guidance after the contribution from newly acquired brands led to a surge in third quarter profit and sales. Net profit jumped 66% to $54.4m from $32.8m in the prior year, while revenues more than doubled to a record $716.7m.

 

READ ALSO: Doing Business In The Dominican Republic, Or NOT... ? - Don't Invest In The DR, See Why!

Go back | Date: 20 Nov 2013
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