Danier Leather Inc.

Danier Leather Inc.

April 07, 2009 15:00 ET

Danier Leather to Reduce Costs

TORONTO, ONTARIO--(Marketwire - April 7, 2009) - Danier Leather Inc. (TSX:DL) today announced initiatives to reduce costs and position it for improved financial performance.

Mr. Jeffrey Wortsman, President and Chief Executive Officer of Danier Leather Inc., stated: "In light of the current uncertain business and economic environment, we are taking the necessary steps to reduce our costs while continuing to execute our strategy of providing our customers with exciting merchandise at remarkable prices and value."

Danier is implementing a number of initiatives to reduce costs including:

- Head office staff - Danier's 130 person head office staff will be reduced by approximately 22 individuals for anticipated annualized savings of approximately $1.3 million. A one-time charge of approximately $0.6 million for severance payments for the affected employees is expected to be recognized in the third quarter.

- Domestic manufacturing - Approximately 13% of Danier's garments are produced at its manufacturing facility in Toronto. Danier will be reducing its domestic manufacturing capacity by approximately 50% resulting in a workforce reduction of approximately 56 employees. The workforce reduction is anticipated to reduce Danier's domestic manufacturing cost base by approximately $1.3 million. A one-time charge of approximately $0.8 million for severance payments for the affected employees is expected to be recognized in the third quarter. The domestic manufacturing process has been reengineered to be more flexible and allow for faster turnaround. In addition, capacity can be scaled up should volume requirements increase in the future.

Mr. Wortsman added, "The Company remains committed to work towards achieving sustained profitability. In addition to these initiatives, other expenses will be examined with a view to maximizing operational efficiency at Danier."

About Danier

Danier Leather Inc. is a leading integrated designer, manufacturer, and retailer of high-quality leather and suede clothing and accessories. The Company's merchandise is marketed exclusively under the well-known Danier brand name and is available only at its 89 shopping mall, street-front, and power centre stores, or through its corporate sales division. Danier's products are also available at the Dubai Mall and the Festival City Mall in Dubai. For more information about the Company and our products, see www.danier.com.

Note: This press release contains forward-looking information and forward-looking statements which reflect the current view of Danier with respect to the Company's objectives, plans, goals, strategies, future growth, results of operations, financial and operating performance and business prospects and opportunities. Wherever used, the words "may", "will", "anticipate", "intend", "expect", "estimate", "plan", "believe" and similar expressions identify forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the statements in this press release containing forward-looking statements or forward-looking information are qualified by these cautionary statements.

Forward-looking statements and forward looking information are based on information available at the time they are made, underlying estimates and assumptions made by management and management's good faith belief with respect to future events, and are subject to inherent risks and uncertainties surrounding future expectations generally. Such risks and uncertainties include, but are not limited to, fashion and apparel and leather industry risks that can affect demand for the Company's products and inventory markdowns, a real or perceived slowdown in the general economy which can result in a reduction in consumer spending and can affect demand for the Company's products, changes in consumer shopping patterns away from shopping malls and power centres, unseasonably hot weather or severe or unusual weather that prevents customers from going to the Company's stores, seasonality, heightened competition including new competitors and expansion of current competitors, foreign currency fluctuations which result in increased costs, leather availability and prices, consumer demand, disruptions in the credit markets, risks associated with foreign sourcing and manufacturing, existing and potential legal proceedings, ability to successfully implement the Company's business strategy, ability to realize anticipated cost savings, war and acts of terrorism, higher utility and fuel prices which can result in increased costs, the ability of the Company to attract and retain key executives and key employees, the ability of vendors to maintain, support and upgrade management information systems, catastrophic or other events that impact the use of the Company's head office and distribution centre, increased inflation and interest rates, changes or disruptions in the securities markets, the ability of the Company to obtain new locations or renew or relocate existing locations at existing or favourable lease terms, changes to the regulatory and economic environment in which the Company operates now and in the future, including changes in accounting policies or pronouncements introduced by regulatory authorities, changes in the Company's tax liabilities, either through changes in tax laws or future assessments, and performance of third party service providers, among other things.

Danier cautions readers that this list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual events, performance or results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. Potential investors and other readers are urged to consider these factors carefully in evaluating forward-looking information and forward-looking statements and are cautioned not to place undue reliance on any forward-looking information or forward-looking statements.

For additional information with respect to certain of these and other risks or uncertainties, reference should be made to Danier's continuous disclosure materials filed from time to time with Canadian Securities Regulatory Authorities, including the Company's annual information form, quarterly and annual reports, and supplementary information, which are available on SEDAR at www.sedar.com and in the Investor Relations section of the Company's website at www.danier.com. Additional risks and uncertainties not presently known to the Company or that Danier currently believes to be less significant may also adversely affect the Company. Danier disclaims any intention or obligation to update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Investor Relations Contact
    Danier Leather Inc., Jeffrey Wortsman
    President and Chief Executive Officer
    (416) 762-8175, ext. 302
    (416) 762-7408 (FAX)
    Danier Leather Inc.
    Bryan Tatoff
    Senior Vice-President and Chief Financial Officer
    (416) 762-8175, ext. 328
    (416) 762-7408 (FAX)