Nautica Enterprises, Inc. today announced that the headquarters of its Earl Jean, Inc. subsidiary will be relocated from Los Angeles, California to New York, New York and its customer service and distribution functions will be integrated into Nautica's existing facility in Martinsville, Virginia.
This move is a result of the Company's overall efforts to streamline operations, identify synergies within divisions and leverage its existing infrastructure. The relocation process, which is being led by Bonnie Takhar who was named President of Earl Jean, Inc. in October 2002, will begin immediately and is expected to be completed by the end of Summer 2003. Earl Jean will continue to maintain a presence on the West Coast through the use of its current showroom in Los Angeles.
Harvey Sanders, Chairman, President and Chief Executive Officer of Nautica Enterprises, Inc., commented, ''This was definitely a difficult decision to make because of the impact on Earl Jean's employees, but we believe this consolidation is necessary as it will enable greater growth potential for the brand over the long-term. We appreciate the valuable contributions that the Earl Jean employees have shown since becoming part of Nautica Enterprises, Inc., and we are committed to providing them assistance during this time.''
Bonnie Takhar added, ''We stand to gain a number of economic and strategic advantages for the Earl Jean brand as a result of this relocation. Significantly, having a presence in New York, the fashion capital of the United States, will provide us a stronger base to not only expand our business domestically, but also on a global level.''
As a result of the consolidation and elimination of overhead costs, the Company expects to add approximately $1 million, or $0.02 per diluted share, to the Company's earnings on an annual basis beginning in fiscal 2005. The benefits of the relocation and integration process will be offset in fiscal 2004 by non-recurring costs associated with the wind down of operations in Los Angeles. The savings and related expense have been factored into the guidance that the Company provided on January 10, 2003, and the Company remains comfortable with the range of earnings per diluted share of $1.00 to $1.10 for fiscal 2004.
Nautica Enterprises, Inc. (Nasdaq: NAUT), through its subsidiaries, designs, sources, markets and distributes apparel under the following
brands: Nautica; Nautica Competition; Nautica Jeans Company; Earl Jean; John Varvatos; E. Magrath; and Byron Nelson.
Shannon L. Froehlich, Vice President – Corporate Investor Relations