UPDATE: Delta Apparel Consolidates US Screen Print Unit, Sees Costs ~$1.5B, Says 135 Employees Affected
Delta Apparel, Inc. (NYSE: DLA) today announced plans to consolidate its domestic screen print operations as part of its continued focus on more efficient manufacturing and distribution strategies. The consolidation will result in the closing of the Wendell, North Carolina decoration facility operated by the Company's Soffe business unit and the consolidation of those operations within Soffe's Fayetteville, North Carolina facility.
Bob Humphreys, Chairman and Chief Executive Officer, commented, “These decisions are never easy, especially when they affect associates who have been dedicated and loyal to our Company. However, as our business becomes increasingly competitive, we can no longer justify the additional cost associated with operating two U.S. decoration facilities. We believe this economic decision is in the best long-term interest of Delta Apparel and our shareholders.”
The consolidation will begin immediately and is scheduled to be completed in the first quarter of fiscal year 2014. The Company expects to realize annual savings of approximately $1.5 million once the consolidation is complete. The aggregate costs associated with this transition are expected to be approximately $1.5 million, of which $0.4 million is being expensed in the Company's fiscal year 2013 fourth quarter and the remainder in the fiscal year 2014 first quarter.
The closing of the Wendell facility will impact the employment of 135 associates. Soffe's Fayetteville facility will continue to employ approximately 500 associates in various capacities including sewing, screen printing, retail packaging, distribution, and product and art development, and will continue to house Soffe's sales and administrative functions. Associates impacted by the closing will be considered for open positions in these areas as well as transfer opportunities to other Delta Apparel facilities.
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