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  • fastmoneyla Aug 18, 2010 11:11 AM Flag

    $2 Million - BUY

    Frederick's of Hollywood to Save Approximately $2 Million in Annual Costs by Streamlining Distribution Processes and Outsourcing its Remaining Manufacturing
    Wednesday 08/18/2010 9:33 AM ET - Pr Newswire

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    Symbol Last %Chg
    FOH 0.96 -1.84%

    As of 11:00 AM ET 8/18/10
    Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) ("Company") today announced that it has completed its plan to outsource its remaining manufacturing processes and is in the final stages of consolidating its distribution facilities, which will result in a total annual savings of approximately $2 million.

    The Company has ceased manufacturing at its facility in the Philippines, which is expected to reduce annual costs by approximately $1.5 million. This is the last step in the Company's strategy to fully outsource its manufacturing in order to reduce costs and operational risks.

    The Company is also in the final stages of consolidating its retail and wholesale distribution capabilities into its 168,000 square foot facility in Phoenix, Arizona. As a result, the Company will cease operations at its wholesale distribution facility in Poplarville, Mississippi by November 30, 2010. The Company expects to save approximately $500,000 annually as a result of consolidating its distribution capabilities. Once the integration is completed, the Phoenix facility will serve as the Company's U.S. distribution, customer contact and information technology center.

    "The latest changes to our manufacturing and distribution capabilities are in line with the strategy we have implemented over the past 18 months, which is aimed at streamlining our operations and reducing costs. These changes are expected to reduce total costs by $2 million annually, and positively impact our operating margins," stated Thomas Lynch, the Company's Chairman and Chief Executive Officer. "Consolidating the distribution of our products to the Phoenix facility and fully outsourcing our manufacturing will allow us to dedicate more resources to the marketing and design of our products in order to strengthen our brand."

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