Hanesbrands Inc. announced plans to close a high-cost distribution center in Weston, Fla., and consolidate two other distribution centers that it now operates in Winston-Salem, N.C., where the company is headquartered, into a nearby facility. The company will reportedly reduce the amount of space it leases for the distribution of men’s underwear, women's panties and sleepwear by more than 400,000 sq. ft. The consolidation will also improve the Hanesbrands' product flow within its global supply chain by moving distribution of some products from Florida to the company's new facility in California.
"We are moving quickly to drive improvements throughout our global supply chain," said Gerald Evans, Hanesbrands executive vice president and chief global supply chain officer. "We want to improve the efficiency and effectiveness of our distribution operations by operating fewer and larger distribution centers that are strategically located to support our long-term vision for a supply chain that significantly spans both the Eastern and Western hemispheres.”
The company will move distribution of men's underwear and sleepwear products handled in Weston to the company’s existing distribution centers in Rancho Cucamonga, Calif., near Los Angeles, and Rural Hall, N.C., near Winston-Salem. The company's 446,000-sq.-ft. Rural Hall DC will be upgraded to handle the work currently performed at the two other Winston-Salem centers.
"We opened our first distribution center on the West Coast in July, and it offers a preferred location for some of our products that are being distributed through Florida. In Winston-Salem, we will significantly increase the efficiency of those operations by consolidating two leased facilities into other existing leased space,” Evans added.
Hanesbrands expects to take restructuring and related charges for the Weston DC closure of approximately $8 million, including severance, lease exit and asset write-off costs. Operations at the 267,000-square-foot distribution center are expected to cease by March 2007. The company designs, manufactures, sources and sells T-shirts, bras, panties, men's underwear, children's underwear, socks, hosiery, casual wear and active wear. It has approximately 50,000 employees in 24 countries.