Hanesbrands Inc. will close a high-cost distribution center in Florida and consolidate two other distribution centers in Winston-Salem, N.C., into a nearby third facility.
The company will reduce the amount of space it leases by more than 400,000 square feet. The consolidation also will better align the company's product flow within its overall global supply chain by moving distribution of some products from Florida to the company's new distribution center in California.
The closing of the Weston, Fla., distribution center will result in a reduction of 79 jobs. There will not be a job reduction as a result of the consolidation of distribution operations in Winston-Salem.
“We are moving quickly to drive improvements throughout our global supply chain,” said Gerald Evans, Hanesbrands executive vice president and chief global supply chain officer. “We want to improve the efficiency and effectiveness of our distribution operations by operating fewer and larger distribution centers that are strategically located to support our long-term vision for a supply chain that significantly spans both the Eastern and Western hemispheres.
“We opened our first distribution center on the West Coast in July, and it offers a preferred location for some of our products that are being distributed through Florida. In Winston-Salem, we will significantly increase the efficiency of those operations by consolidating two leased facilities into other existing leased space.
“We regret that our employees in Weston, Fla., will be affected by the distribution center closure, but we must continually improve to remain competitive and create opportunities for our organization as a whole.”
Hanesbrands expects to take restructuring and related charges for the Weston distribution center closure of approximately $8 million, including severance, lease exit and asset write-off costs. Operations at the 267,000-square-foot distribution center are expected to cease by March 2007.
The company will move distribution of men's underwear and sleepwear products handled in Weston to the company's existing distribution centers in Rancho Cucamonga, Calif., near Los Angeles, and Rural Hall, N.C., near Winston-Salem.
The Rancho Cucamonga distribution center, the company's first on the West Coast, supports the company's expanding supply chain in Asia and reduces lead times and improves speed to market.
The company's 446,000-square-foot Almondridge Road distribution center in Rural Hall will be upgraded in order to assume distribution operations that are performed at two Winston-Salem centers, as well as the added product from the Weston center.
Operations at the 90,000-square-foot Empire Drive distribution center and the 240,000-square-foot West Point Boulevard distribution center, both in Winston-Salem, will be relocated by April 2007 to the Almondridge Road distribution center, approximately 20 miles north of the Winston-Salem centers. The company's approximately 140 employees at the Empire Drive and West Point centers will be transferred to the Almondridge Road center.
