WINSTON-SALEM, N.C. — Hanesbrands Inc. said Wednesday that it will close the New Jersey headquarters of Maidenform Brands Inc. as part of a large-scale merger of the two apparel companies.
The Winston-Salem apparel manufacturer completed the largest purchase in its six-year history Oct. 7 by buying Maidenform for $583 million in cash. The deal was announced July 24.
As a result, close to half of Maidenform’s 1,330 global workforce will lose their jobs over the next 12 months.
The Maidenform operations in Iselin, N.J., will be consolidated into Hanesbrands’ local headquarters and in its Manhattan offices by the end of 2014.
The integration also will lead to the closing of Maidenform’s distribution center in Fayetteville, with those operations being consolidated into Hanesbrands’ operations in Forsyth and Cleveland counties.
Typically, an acquiring company brings administrative, back-office and sales jobs to its headquarters. Hanesbrands’ Winston-Salem employees will be told Thursday of the local consolidation impact during a presentation made by local managers. Hanesbrands didn’t discuss where the bulk of the retained Maidenform employees will be working.
Hanesbrands said it has more than 130 vacancies at its Winston-Salem operations “that need to be filled in order to run the combined company.” Hanesbrands has about 2,500 employees in Forsyth County, including about 1,500 at its headquarters.
Maidenform employees were told of the consolidation plans during a town hall meeting Wednesday morning.
“Maidenform job reductions will primarily result from duplicative corporate and operational functions that are already in place at Hanes, and from the absorption of the Fayetteville distribution operations into the Hanes network,” Hanesbrands said in its news release.
Maidenform currently has 300 headquarters jobs. Hanesbrands said some sales, design and merchandising employees will remain with the company.
The Fayetteville distribution center has 280 employees. Operations at the center are expected to be phased out by Sept. 30, 2014.
Hanesbrands said filling the open positions is expected to add $13 million in annual pay and benefits to the Forsyth economy.
The significant job cuts were not surprising given that Hanesbrands made the purchase mostly to gain access to Maidenform’s basic apparel brands and to wring cost savings from shifting Maidenform’s production from third-party vendors to Hanesbrands’ supply chain in Asia, Central America and the Caribbean.
“The decision is not reflective of the skills and commitment of the employees affected, and we will assist employees in the transition,” said Gerald Evans, Hanesbrands’ chief operating officer. Hanesbrands will provide severance and separation benefits consistent with Maidenform policies and collective bargaining obligations.
Hanesbrands operates eight distribution centers in North Carolina with a combined 1,300 employees, not including seasonal temporary workers.
“Teams from both companies representing sales and marketing, international, direct to consumer, design and merchandising, finance, supply chain, human resources and information technology have been formed and are collaborating to develop plans around operational and functional issues,” Richard Noll, Hanesbrands’ chairman and chief executive, said in a memo to employees in September.
Noll said that as the integration teams have worked together, “we have been impressed by how well our two companies complement each other and how much opportunity there is for growth and improvement.”
The deal brings the Maidenform, Flexees and Self Expressions shapewear brands into Hanesbrands’ intimate-apparel portfolio, as well as the basic apparel heritage of a 91-year-old company.
Hanesbrands expects the deal to contribute more than $500 million in incremental annual sales, 60 cents in diluted earnings for each share, $80 million of operating profit, and $65 million of free cash flow within three years.