Springs Trims U.S. Exec Ranks

Brent Felgner, Staff Staff, February 9, 2009

Springs Global has thinned its U.S.-based executive and professional ranks in merchandising, marketing, design and sales, nudging or pushing more than a dozen people out the door, including at least three vice presidents. As a result, it is in the midst of a significant shift in some job responsibilities and in the organization of its markets.

Like innumerable businesses today — including many of its retail customers — Springs is struggling to find ways to do more with less. But the effort seems particularly vexing for Springs, which still bills itself as the world's largest home textiles company, even as its U.S. business today is a fraction of what it was a mere three years ago.

Among the top echelon of the departed are Susan Carroll, John De la Roche and Leslie Gillock.

Carroll is the former vp of bath merchandising; De la Roche the one-time president of Springs Canada, then promoted to senior vp, bedding merchandising, and who most recently oversaw the company's European sales efforts; Gillock was vp of brand management.

Springs Global executive vp Tom O'Connor, who leads the U.S. effort, confirmed the partings and said a new organizational chart was in progress. “We're still working on it, and we're just not prepared to send it out at this point,” O'Connor explained.

O'Connor indicated that at least a portion of the reorganization involved managing the company's talent pool as well as wrestling with the economics. Pointing to last week's hiring of Tina Gunther to head the bath rug business, he indicated there would likely be a few other such moves.

He also confirmed that all merchandising authority — bed, bath and utility bedding — has been placed under Harvey Simon's purview.

“We're looking at it on two fronts,” O'Connor told HTT. “We're making some changes and some people are going to be added to the organization, and second, we're dealing with the realities of today's economics. And we're dealing with those two things simultaneously. Our decision now to reorganize our business is centered around our two businesses: our branded business and our private label business.”

The reorganization comes at a time when Springs is in a heavy sell of its Springmaid relaunch in a retail environment far below optimum. That effort is going well, the company has insisted, and has not been impacted by the management changes.

Among others who have left the company are Steven Pianowski, who formerly managed bath rugs and reported to Carroll; and Blake Bell, who managed both the Shanghai and Delhi offices for Springs. Miller Deaton, who headed all U.S. and Mexican manufacturing and distribution, has retired. Jeff Nigh, who headed the basic bedding business, has been reassigned to a “high-profile important project with huge consequences,” O'Connor said. He declined to elaborate.

The changes are not surprising. And if not entirely dictated by economics and lagging results, they are admittedly heavily influenced by those factors. Confronted by continuing losses at both the top and bottom lines, O'Connor and ceo Josue Gomes da Silva have made it abundantly clear that they will manage the business for profitability with a sharp eye on SG&A expenses. During the third quarter, the most recent reported, Springs posted a sharp 32% drop in sales (22% from continuing operations) and a loss of nearly $39 million. Gomes da Silva deferred all comment to O'Connor.

“These transitions have as much to do with the trade realities of today's world than they do with our particular transition and mergers,” O'Connor said. “We're all dealing with a new world, and that new world started to impact all of our companies in this industry long before the economic downturn.”

Indeed, those factors have only exacerbated the company's situation during a time of massive transition from its U.S. manufacturing base to one based largely in Brazil, Argentina and Mexico. Limited manufacturing and distribution remain in the United States, but those, too, are shrinking further. Springs is currently closing its Griffin, Ga., towel facility.

The most recent cuts also involved the departures of sales executives Renald Fenton, who was on the Wal-Mart team; Jon Murphy, who oversaw department store sales; and Todd Keasler, closeouts and off-goods.

Also leaving the company were New York designer Judy Dodd; and designers Mij Adams and David Williams, who handled Wamsutta and Springmaid, respectively.

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