After a very difficult couple of quarters, Elizabeth Arden has announced some cuts of its own that include eliminating jobs, brands and retail partners. The company board of directors approved a broad restructuring and cost savings program that is intended to reduce the size and cost of the company's overhead structure and exit low-return businesses, customers and brands to improve gross margins and profitability in the long term.
The 2014 Performance Improvement Plan includes the exiting of certain unprofitable retail doors and fragrance license agreements, changes in customer, distribution and supply chain relationships, the discontinuation of certain products, the elimination of employee positions globally and the closing of the company's Puerto Rico affiliate. The 2014 Performance Improvement Plan is only a part of the company's ongoing broad restructuring and cost savings program, and the company is continuing to target annual savings in the range of $40-$50 million upon full implementation of the program.
The company currently estimates that the 2014 Performance Improvement Plan will result in pre-tax charges beginning in the fourth fiscal quarter of 2014 and through fiscal 2015 of $65-$72 million, of which an estimated $32-$36 million is comprised of future cash expenditures. The company anticipates annualized savings resulting from the 2014 Performance Improvement Plan activities of approximately $27-$35 million.