In a bid to enhance profitability, Warnaco Group Inc. said it plans to
sell its Catalina, Anne Cole and Cole of California brands, leaving it
with only Calvin Klein and Speedo among its swimwear brands. The
company added that it will explore strategic alternatives for the
European-based Lejaby business, which is made up of the Lejaby, Rasurel
and Elixir intimate apparel and swimwear brands
Overall, the company said it will exit all of its private-label and
designer swimwear businesses by June 30, 2008. In addition, Warnaco
plans to transfer its Mexican manufacturing operations to a local
business partner.
Warnaco said it expects to incur between $30 million and $32 million in
restructuring charges, mostly due to the change in manufacturing
operations.
At the same time, the company also raised its fiscal 2007 earnings
guidance, and predicted higher sales growth than previously
expected.Warnaco said it now expects full-year earnings per share of
$2.05 to
$2.15 from continuing operations, excluding restructuring charges. The
company added it expects its sales to grow between 9 percent and 11
percent in fiscal 2007. Previously, the company expected profit between
$1.90 and $2 per share
from continuing operations, with revenue growth between 7 percent and 9
percent.
“We believe the actions announced today will enhance the productivity
and profitability of Warnaco. Going forward, our portfolio will consist
of compelling brands that we believe are positioned for sustainable
long-term growth,” said Joseph Gromek, Warnaco's President and Chief
Executive Officer. “Our global Calvin Klein businesses, including more
than 660 points of retail distribution, and our dominant Speedo
business, offer us significant expansion opportunities. In particular,
today's announcement enables us to focus on maximizing this potential.
Additionally, we expect to reduce our cost base as we exit from owned
manufacturing and capitalize on our international sourcing
infrastructure.”
