Culp Announces Broad Restructuring Plan Primarily Focused On Mattress Fabrics Segment Reduce The Number Of Associates By ~240 People, Representing Around 35% Of The Segment's Total Workforce, Expected To Generate $10M-$11M In Annualized Cost Savings
Portfolio Pulse from Benzinga Newsdesk
Culp, Inc. (NYSE:CULP) announced a major restructuring plan focused on its mattress fabrics segment to reduce costs and improve efficiency, expecting to save $10M-$11M annually. The plan includes reducing the workforce by ~240 people (~35% of the segment's workforce), consolidating operations, and transitioning to strategic sourcing models. The restructuring, aimed at addressing reduced demand and excess capacity, will also involve selling real estate and equipment to fund the costs, with anticipated cash proceeds of $10M-$12M. The company expects to return to profitability and maintain competitive advantage without impacting top-line sales.
May 01, 2024 | 9:23 pm
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Culp, Inc. is undergoing a significant restructuring, primarily in its mattress fabrics segment, to save $10M-$11M annually. This includes workforce reduction, operational consolidation, and strategic sourcing transitions, funded by asset sales.
The restructuring plan is a strategic move to address the challenges faced by Culp, Inc. due to reduced demand and excess capacity. By reducing the workforce, consolidating operations, and transitioning to strategic sourcing models, Culp aims to significantly reduce fixed costs and improve efficiency. The anticipated annual savings of $10M-$11M, along with the expected proceeds from the sale of real estate and equipment, suggest a positive outlook for the company's financial health and operational efficiency. This strategic overhaul is likely to enhance Culp's competitive advantage and support its growth in a challenging market, making it a potentially attractive investment.
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