WOONSOCKET – Summer Infant Inc., doing business as SUMR Brands, will enact a restructuring plan that the company on Friday said will save it $7.5 million annually.
The infant and juvenile products company was hit particularly hard by the closure of Toys R Us and Babies R Us. The company was also impacted by recent tariffs.
The company reported a $1.7 million loss in the third quarter of 2019, its most recent quarterly report. In 2018, the company reported a $4.3 million loss.
Mark Messner stepped down from the CEO post in December and interim CEO Stuart Noyes has since taken over and begun implementing a turnaround effort.
The restructuring plan includes a sublease of a warehousing facility in California, and a plan to vacate a United Kingdom distribution center, centralizing international distribution to a third-party facility in China.
The company also noted that it has already made job cuts and implemented supplier cost concessions – actions that are included in the company’s cost-saving projection.
A company spokesman said that the “company’s staff reduction includes 8 percent of the its global workforce and 15 percent of its Rhode Island workforce.”
According to company filings, the company had 159 employees at the end of 2019.
“We continue to focus on the fundamentals – reducing costs and taking steps designed to speed products to market – as we work towards improving the company’s underlying financial performance.” said Noyes. “Recently enacted initiatives and those in process are expected to save … approximately $7.5 million on an annualized basis, and, in the near future, we will begin benefiting from tariff changes already announced with China. Specifically, a 50% reduction in the List 4A tariffs – from 15% to 7.5% – becomes effective Feb. 14, positively impacting cash flow. We remain committed to delivering higher bottom-line results and increasing shareholder value.”
SUMR Brands also reminded investors that it was holding a shareholders meeting in March to vote on a potential reverse stock split. The move is part of an effort to avoid being delisted on the NASDAQ due to a sustained low share price.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.
