The Spiegel Group announced that, as part of its ongoing restructuring process, it is taking steps to rationalize its operations, making headcount reductions at its Spiegel Catalog division and its corporate support staff.
On April 6, 2004, the company announced that it was in preliminary negotiations with a party interested in purchasing Spiegel Catalog. While the company's negotiations with the interested party are ongoing, the company also continues to work with its financial advisor, Miller Buckfire Lewis Ying & Co., to evaluate and assist in determining potential interest in Spiegel Catalog. The company cautions that there can be no assurance that any purchase transaction involving Spiegel Catalog will occur.
The company said that sufficient uncertainty exists as to whether a potential buyer would assume the majority of the current Spiegel Catalog work force. Therefore, it is rationalizing the Spiegel Catalog business to facilitate any transition of either the business or certain assets of the Spiegel Catalog business in the event a purchase transaction should be negotiated with an interested party, if any, and to minimize ongoing operating losses of the Spiegel Catalog business.
Bill Kosturos, interim chief executive officer and chief restructuring officer of The Spiegel Group, said, “While we are involved in active discussions with an interested party, we are continuing to take steps to minimize the ongoing operating losses of the Spiegel Catalog business and to help facilitate any possible transaction. Although this has been a difficult decision to reach, rationalizing the Spiegel Catalog business will make it a smaller entity.”
As a result, the company said that as required under the Workers Adjustment and Retraining Notification Act, notices were issued to approximately 255 employees at Spiegel Catalog and Spiegel, Inc., with layoffs occurring today and over the next two months. The majority of the employees affected are located at the company headquarters and its data center, which are both in the Chicago area. The company will provide severance and other benefits to affected associates.
Geralynn Madonna, president and chief executive officer of Spiegel Catalog, commented, “While this was a very tough business decision, I would like to recognize the dedication and hard work of the Spiegel Catalog employees and those in our corporate support staff. As we work through this process, we remain steadfast in our commitment to provide a one-stop shopping destination and the highest level of service to our customers.”
