Virginia Beach
The December layoffs at Lillian Vernon Corp. stemmed from rising postal costs, the falling U.S. dollar and lower-than-expected holiday sales, its chief executive told a trade publication.
"The most damaging was the postal rate increase of 20 percent," said Michael D. Muoio, who also cited the parcel carrier rate increase of 25 percent, according to a story posted Wednesday evening on the Web site of Multichannel Merchant magazine.
"Basically, FedEx and the U.S. Postal Service reached down into our pocket and took out $8 million," Muoio said. "For us, there was no choice."
Muoio also said that while 2007 holiday sales exceeded those in 2006, they were not good enough.
With rising costs chipping away at profits, the retailer has to change, he said. "We just have to become a smaller business," Muoio said.
So the Virginia Beach-based company laid off about a quarter of its permanent work force of more than 500 on Dec. 20.
Muoio did not return calls to his office and cell phones this week.
Mark McGowan, the catalog retailer's vice president of human resources, told The Virginian-Pilot this week that the company had no public comment, and would not even confirm the number of year-round workers who lost their jobs.
"It's obviously a sensitive subject for the folks who have been impacted," he said.
The 57-year-old business sells low-cost gifts, gadgets and household goods through its catalog and Web site. It specializes in personalized merchandise.
The layoffs cut across the company, affecting people at both high and low levels. The cuts were separate from the normal hiring and firing of roughly 3,000 temporary employees each fall to handle the surge in holiday orders.
Two executive vice presidents lost their jobs, as did many order processors and sales representatives, according to documents provided by the company to terminated employees. Even the company's spokesman lost his job. Roughly 374 employees remain after the terminations, the documents show; however, the trade magazine said about 500 are left.
Most of the jobs were cut at the company's headquarters and distribution center off Lynnhaven Parkway, but a few were trimmed at Lillian Vernon's former headquarters in White Plains, N.Y., where it maintains a small presence, according to Multichannel Merchant.
More than 100 of the 137 terminated employees were 40 or older, according to the documents, prompting a handful of employees to consider filing an age discrimination lawsuit against Lillian Vernon.
"There's several of us that would love to do something," said Virginia Hudgins, a 47-year-old Norfolk resident who worked in the company's call center for six years.
However, age discrimination cases are difficult to prove, said Arlene F. Klinedinst, a labor and employment lawyer with Vandeventer Black LLP in Norfolk.
Hudgins and others say they are upset with how the company handled the termination. They said they were given no advance notice that their jobs were being cut, and that they were escorted out of the building as soon as they were given notice.
By firing the employees before Christmas, they said the company was able to avoid giving them holiday pay for Christmas Eve and Christmas.
"Every person is going to have their own account of it," McGowan said of the termination process, declining further comment.
Lillian Vernon also trimmed its staff last year after the company lost the contract to handle the call center and distribution business for Time-Life books and movies. It said the cuts "affected" about 230 workers.
Lillian Vernon was acquired in May 2006 by Sun Capital Partners Inc., a privately held Boca Raton, Fla.-based investment company. Muoio took charge soon after. Muoio has said he set out to revamp operations as the company was losing money. In December 2006, he said Lillian Vernon's annual revenue was about $175 million.
Muoio told Multichannel Merchant that he expects Lillian Vernon to survive this tough period.
"We're going to recover," he said.
Gregory Richards, (757) 446-2599, gregory.richards@pilotonline.com
Delicious
Digg
Reddit
Facebook
Google
Yahoo
It's just Standard Operating Procedure
And totally typical for american businesses 101. It's a pretty bad sign of things to come when the producers of the work get fired in order to keep the profit margins high and the stockholders happy. At some point when there are no more american workers producing, what then? No worries. To cut even more expenses and continue to keep the profit margins high, the stockholders happy and the CEO with his billion dollar parachute, they'll ship the call centers and all other aspects of the business overseas. Who needs american workers, obviously not american corporations. Soon enough another american company will be gone. Because american CEOs and corporations are concerned only with taking profits and raping the average american, we will soon be owned by the chinese and indians. We are being decimated from within and will brought to our knees in the name of profits.
Lots of layoffs recently...
But the Big Wigs stay rich... Terry-Peterson Residential (the local builder that bought Duck-In) laid off a bunch of us just before Thanksgiving. Lots of other companies are laying off too. I hope these Lillian Vernon people can find work, I hope we all can, but it doesn't look so good right now...
Well,
They won't be recovering on money I spend with them because I'll never buy anything from them again-
Laying people off just five days before Christmas is nothing short of CRUEL.
LOL @ OLD COMPANIES
So sad, they could have offered special deals via an email based distribution, and moved a portion of the customer base to electronic mail distribution. Of course, emails can't sit on the toilet tank. But it could have provided savings. And split up warehouses for regional distribution, which may lead to shorter shipping routes (perhaps by product popularity, based on data queried from sales databases). Also, FedEx Ground offers huge savings over standard FedEx. Need to ship something big? Talk to FedEx ground (which used to be RPS). If you don't, you're missing out. Lastly what about smaller carriers like DHL. Might be possible to negotiate better rates.
Here is Wisdom....
The Old way of hanging on to the same ol' job is gone! Get your experience, at the same time learn and educate yourself on a new skill and move on! Companies will feed you the same tired line, expecting loyalty from workers, but as soon as they look at their numbers and they are not up to par, the easiest thing for them to axe that has immediate impact on numbers is employees. you will be gone before your can say, what happened. Be Wise and Be Smart! It is not the same working world as it use to be. Save while you work, and always plan your next move, do NOT get complacent, because while these decision making Executives are out on the Country Club Golf Course, you and your family will be suffering financial hardship and looking for that next job. I am thankful I am gainfully employed, but suffer from no illusions it can end at anytime!
blame
first off Duoio why dont you check other carriers fed ex is not the only one that covers the world the post office like your self only want to get richer forget them. You need to thin your wallet some and stop laying off the people that make you rich, You do nothing but sit on your fat butt while hard working people strugle to make a living. Why dont you come down to our level and see how tough it is to live on what you pay. You probly have a million doller home two jags, your wife has her nails and hair done every week, votox. I could go on and on but you get the picture.
Tough stuff
They had to make a business decision and you got caught up in it. It's tough when a company does that or is forced to do that. I know shoving folks around isn't a good business model and they'd much rather not make the media by having to do just that. Terrible time of year to have to do it also. Now you've got to pull your bootstraps up and get some employment. I don't think they owe you any more than they gave you. A paycheck for a fair day's work. This is a "right to work state." I'm sure all the Human Resources bases were covered before the decision was made.
Other option is to retain everyone, let the business go down the tubes completely at which time everyone is out looking for work. There's an owner of that business out there somewhere that wants it to succeed.