Playtex Products will realign its business to improve focus on its core categories, reduce organizational complexity and obtain a more competitive cost structure. Once fully implemented, these initiatives are expected to enable the company to be more consumer focused and better able to implement its growth strategies in a timely manner. Charges related to the realignment are expected to total between $17 and $19 million by the end of 2005, of which approximately $11 million will be recorded in the fourth quarter of 2004. The company expects savings associated with the realignment to be between $12 and $14 million in 2005, with fully annualized savings of $22-$24 million in 2006.
Among the highlights of the plan are consolidation of the U.S./International divisional structure in favor of a product category structure; realignment of the sales and marketing organizations and related support functions and rationalization of manufacturing, warehousing and office facilities including the outsourcing of gloves production to Malaysia and a reduction in the size of corporate headquarters.
These efforts will result in a reduction of more than 300 positions by the end of 2005, or approximately 20% of the workforce. The reduction will be obtained through a combination of attrition, early retirement and layoffs. Severance, outplacement services and other related benefits will be available to eligible associates.