Apparel producer Russell Corp. to lay off employees, restructure

ATLANTA (AP) -- Athletic apparel producer Russell Corp. will lay off up to 110 employees by year's end, citing higher costs of raw materials and pricing pressures.
The move, which amounts to a 10 percent staff reduction, is part of a restructuring of the company's athletic, outdoor and active wear apparel business after net earnings in the third quarter fell 21 percent, company officials announced. The positions are in marketing, administrative and support areas.
The cuts will result in an annualized pretax savings of $8 million to $10 million with about $3 million in severance and other expenses, the company said.
Russell, which has dual headquarters in Atlanta and Alexander City, Ala., plans to create groups of businesses for active wear and athletic apparel.
To support the active wear business, the company will build a $50 million textile factory in Honduras to employ up to 700 people. It will be completed in late 2004 with production starting by early 2005.
In August, Russell announced it will no longer provide uniforms to Major League Baseball teams after 2004, having lost its bid for the contract to Pennsylvania-based rival Majestic Athletic.
Russell still sells thousands of youth and high school baseball uniforms and supplies uniforms to 180 NCAA Division I college athletic teams. Its subsidiary, Spalding, also provides game balls to volleyball and basketball leagues.
As rivals have offered to pay higher prices for the right to supply game uniforms and sell replicas of them to the public -- an area in which Russell has concentrated in the past -- Russell has been concentrating on acquiring sporting goods and athletic-apparel makers.