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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report
July 22, 1998
(Date of earliest event reported)
RUSSELL CORPORATION
(Exact name of registrant as specified in its charter)
Alabama
(State or other jurisdiction of incorporation)
0-1790 63-0180720
(Commission File No.) (IRS Employer Identification No.)
755 Lee Street
Alexander City, Alabama 35011
(Address of principal executive offices) (Zip Code)
(256) 500-4000
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On July 22, 1998, Russell Corporation ("Russell") announced
its intent to undertake a major restructuring. Information concerning the
restructuring plan is included in a press release of Russell made on July 22,
1998, a copy of which is attached as an exhibit to this filing and which is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 - Press release dated July 22, 1998 with respect to
proposed restructuring.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
RUSSELL CORPORATION
(Registrant)
Date: July 22, 1998 By: /s/ Eric Hoyle
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Eric Hoyle
Chief Financial Officer
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EXHIBIT 99.1
For Immediate Release: Contact: Roger Holliday (Financial)
(256) 500-4832
Nancy Young (Public Relations)
(256) 500-5446
RUSSELL CORPORATION ANNOUNCES PLANS
TO RESTRUCTURE AND TAKE CHARGE OF UP TO $125 MILLION
PLAN WOULD IMPROVE OPERATIONS AND RETURNS, REDUCE COST, ENHANCE MARKETING
EFFORTS
ALEXANDER CITY, AL, July 22, 1998 - The Board of Directors of Russell
Corporation (NYSE-RML) today announced its intent to undertake a major
restructuring to improve the Company's global competitiveness. The ultimate
impact of the restructuring and reorganization would be in a range of $100 to
$125 million after tax. It is anticipated that the restructuring will occur over
the next three years with a substantial charge taken in the third quarter of
1998.
At the heart of the program is a multi-year strategic plan to significantly
improve shareholder returns. The plan will couple increases in marketing efforts
with improved asset utilization and cost improvement to increase profitability
and return on assets.
"To remain competitive in the market, we have to focus our efforts on reducing
costs, increasing our spending on consumer marketing, and improving our return
on investment," said Jack Ward, Russell's new chairman, president and chief
executive officer. "We have to ensure that we are producing the highest quality
products at the lowest possible cost. From a financial standpoint, we must
produce consistent earning growth."
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Elements of the multi-year strategic plan that is being considered include:
closing approximately 25 of the Company's 90 worldwide facilities over the next
three years, including selected manufacturing plants, distribution centers and
offices; expanding production outside the United States; consolidating the
licensed products business; disposing of owned shopping center real estate;
reorganizing the corporate structure; establishing a dual headquarters in the
metropolitan Atlanta area; and other cost savings activities. It is anticipated
that approximately 4000 positions will be eliminated. A portion of the savings
will be reinvested in consumer marketing in order to build long-term sales and
profits.
"Every aspect of this plan is designed to make Russell stronger and more stable
for the long-run," Ward said, continuing, "Our new structure, for example, will
be responsive to both our financial and consumer markets and will create an
organization that prepares Russell for future growth. We plan to employ
strategic business units in order to align our organization with our markets,
and the consumer. All of our efforts going forward focus on making Russell
Corporation a leader in the athletic, sportswear and casualwear apparel
categories."
The restructuring plan should begin lowering operating costs in 1999 and should
generate increased savings in subsequent years. Savings from the planned actions
will improve earnings and fund initiatives to increase business growth. Enhanced
consumer marketing efforts will be a priority.
Details of the plan will be released over the coming months, after
implementation steps have been developed. Employees who will be impacted by the
changes will be eligible for a severance package that has been substantially
improved from past practices and an assistance program aimed at helping
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employees replace their earnings. "Obviously, we've not made every decision at
this point," Ward added. "Our goal is to communicate with our financial
partners, employees and communities each step of the way."
This release contains certain statements that describe the Company's beliefs
concerning future business conditions and the outlook for the Company based upon
currently available information. Wherever possible, the Company has identified
these "forward-looking" statements (as defined in Section 21E of the Securities
and Exchange Act of 1934) by words such as "anticipates," "believes,"
"estimates," "expects" and similar phrases. These forward-looking statements are
based upon assumptions the Company believes are reasonable; however, such
statements are subject to risks and uncertainties which could cause the
Company's actual results, performance and achievements to differ materially from
those expressed in, or implied by, these statements. Some forward looking
statements in this release concern anticipated sales levels, cost estimates and
resulting earnings that are not necessarily indicative of subsequent periods due
to the mix of future orders, at once orders and product mix changes, which may
vary significantly from quarter to quarter. The Company assumes no obligation to
update publicly any forward-looking statements whether as a result of new
information, future events or otherwise.
Russell Corporation is an international consumer products company specializing
in activewear, casualwear and athletic uniforms. Its major brands include
Russell Athletic, Jerzees and Cross Creek. The Company's common stock is listed
on the New York Stock Exchange under the symbol RML.
