KEY POINTS:
Australian clothing manufacturer Pacific Brands said today it is to cut 1,850 jobs in Australia over 18 months after posting a A$150 million first-half loss and suspending its dividend.
The cost-cutting will see Pacific Brands close the majority of its Australian clothing and manufacturing operations, discontinue small labels and brands, and sell properties or relocate.
The company's brands include Bonds, Holeproof, Jockey, King Gee, Hard Yakka, Dunlop and Clarks.
A total of 1,200 manufacturing jobs and 650 non-manufacturing jobs in Australia will go.
The site hardest hit by the cuts will be the Hosiery factory in Coolaroo, Victoria, where 298 jobs have been lost.
Jobs will also go at Bonds plants in Wentworthville, Unanderra and Cessnock in New South Wales.
There will be more cuts at Holeproof in Nunawading, Victoria, King Gee in Bellambi, New South Wales, and CTE in Brisbane's West End.
Pacific Brands chief executive Sue Morphet said the new strategy will deliver $A150 million a year in cost savings by full year 2011 after an overhaul of sourcing, including closing the majority of its Australian clothing manufacturing operations.
As well, Pacific Brands will offload non-core businesses, sell properties, relocate some head office functions and consolidate office space, she said.
One-off expenses of around $A110 million would be incurred in the second half of 2009 with another $A15 million in full year 2010 and 2011, the company said in a statement.
The company will use increased operating cashflow to pay down debt.
This may be complemented by asset sales, and would determine the most appropriate debt facilitities for the newly structured business.
Morphet said Pacific Brands would end its manufacturing operations in Asia but may divest them as going concerns.
She said the company's new strategy would be complete by the end of fiscal 2010.
Despite market conditions, key brands including Bonds and Workwear performed well, but were offset by declines in Clothing New Zealand and Holeproof.
- AAP
