SAO PAOLO, Brazil–Springs Global has reported a net loss of $253.2 million for its 2007 fiscal year, compared with a net loss of $171.1 million for 2006.
In a statement accompanying the financial results, the company attributed the results to “the tremendous amount of work performed to adjust the cost structure of our North America subsidiary, Springs Global U.S.” This included the closing of nine manufacturing plants in the United States, the last of which was closed in the first quarter of this year.
The increased loss also reflected soft sales in the U.S. and Canadian markets last year. Overall, Springs Global’s net sales fell 25.6 percent in 2007 to $2 billion, led by a 24.2 percent drop in sales of fashion bedding and a 21.8 percent decrease in sales of bath products.
In a presentation accompanying the financial results, the company said it is making progress on initiatives to reduce its costs and boost sales going forward. Regarding the former, Springs Global said its initiative to reduce general and administrative expenses “continue to yield results.” Among these is the closing of an additional U.S. factory, the Piedmont plant in Alabama, which will take place in the second quarter of this year. The company also completed the sale of two non-core businesses, the baby-products and juvenile-products businesses, which will lower fixed operating costs and allow the company to focus on its core bed, bath and basic-bedding businesses.
On the sales side, Springs Global cited its relaunch of the Springmaid brand, which will take place in September of this year and reach retailers in spring 2009. In addition, the company’s license agreement with Cindy Crawford, its refocusing of the Wamsutta brand (due to relaunch in 2010) and its partnership with Walt Disney World Resort are expected to turn sales in a positive direction in the years ahead.
