Columbia Sportswear is laying off about 80 employees due to weakened demand for its fall 2012-13 cold-weather products.
Officials with Columbia’s Portland, Ore.-based eponymous parent company, which also holds the Mountain Hardwear, Montrail and Sorel brands, said orders for next fall/winter season product were down because many retailers still have large inventories on hand following this year’s mild winter.
Though warmer temperatures are boosting spring/summer outdoor product sales, it likely won’t make up for the bad winter, said Ron Parham, Columbia’s senior director of investor relations and corporate communications.
“For us, our revenue is two-thirds fall [product] and one-third spring,” Parham told SNEWS. “Retailers have been placing their fall ’12 orders as we speak and during the past few months, and their mindset coming out of this past winter is very cautious.”
The layoffs amount to a 2 percent reduction of Columbia’s global 1,400-person workforce and mostly will affect its U.S. and European operations, Parham said, adding that the cutbacks were across the board for the company’s brands. Spared were Columbia’s facilities in Japan, Korea and elsewhere in Asia, where business is growing faster, he said.
In early February, when reporting its fourth-quarter earnings, Columbia officials hinted that cost reductions were ahead. President and CEO Tim Boyle said Columbia’s sales are expected to slow to single-digital percentage growth in 2012, compared to 19 and 14 percent growth achieved in 2010 and 2011.
“As a disciplined response to these slower growth assumptions, we have begun implementing a number of measures designed to limit full year 2012 expense growth to a rate that is comparable to our anticipated sales growth,” Boyle said in the earnings report.
Parham said the company began with cutting back as many activities and programs as it could before having to move on to employee cuts. The layoffs, which began in February, are being conducted gradually over a few months, he said. Boyle and Columbia Chairman of the Board Gertrude Boyle have agreed to a 50 percent cut in their salaries. The company has yet to report those salaries, but in 2010, each made more than $800,000, not including bonuses and stocks options.
“We’re determined to move past this and stay focused on product innovation,” Parham said.