Saturday, August 12, 2000

Layoffs part of restructuring at Elder-Beerman




By Lisa Biank Fasig
The Cincinnati Enquirer

        Elder-Beerman Stores Corp. Friday said it let go of 130 corporate workers as part of a restructuring plan to eliminate millions of dollars in expenses.

        The plan comes as the Dayton-based retailer is scrambling to find ways to appease frustrated shareholders who have grown impatient with the chain's declining sales and stock. Along with the reductions, Elder-Beerman is adopting a remerchandising pro gram to carry more lower- and moderate-priced goods.

        “This is a strategy that was developed over the past several months, and it was a strategy we have tested through some extensive customer research,” said Scott Davido, chief financial officer of Elder-Beerman.

        The job cuts are in all departments and primarily at Elder-Beerman's headquarters, which employed 636. Some store positions will be eliminated and hours reduced as well.

        Elder-Beerman expects to realize $10 million to $12 million in permanent savings in fiscal 2001 and an additional $5 million to $7 million in 2002. The merchant will incur up to $16 million in expenses related to the reorganization and severance payments.

        “Our entire industry is in transition, and we have to change the way we operate for Elder-Beerman to succeed,” Chief Executive Frederick Mershad told workers Friday.

        In July, Elder-Beerman modi fied its annual meeting proxy statement to include several proposals by major shareholders. Among those changes, it replaced its own slate of director nominees with some nominees of its investors.

        David Nierenberg, who owns 5.5 percent of Elder-Beerman, has called for the resignation of its top management.

        “I'm sorry that 130 people are going instead of two,” he said Friday.

       



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