Swiss Colony Cuts Staff Following Disappointing Holiday Sales

Multititle mailer Swiss Colony announced on Tuesday that it would close one call center and a production facility servicing its namesake food catalog, laying off 69 employees.

The Monroe, WI-based company decided on the layoffs following a 5% decline in holiday sales at the Swiss Colony title, says president John Baumann. But the job cuts aren’t a cost-saving measure, he adds.: “We haven’t even calculated that. These jobs are all production-related jobs, dictated by volume, and we don’t have the volume to support that number of workers.” Baumann says the layoffs will result in a 5% decline in food-related production and call center capacity.

The call center that will close is in Danville, IL, and is the last call center that was added to the company, says vice president of human resources Joe Hunter. He says the company’s four other call centers, in Monroe and Dickeyville, WI; Clinton, IL; and Hannibal, MO, will pick up any additional work left over by the closure. “We had excess capacity, and we are cutting some of that excess capacity,” says Hunter. “We may be shifting some of the work to those locations, but we have capacity in those locations as well.”

The production facility where will occur is in Mauston, WI. The company owns two other production facilities that will pick up some of the extra work left over by the reduced workforce, says Hunter. Swiss Colony’s other catalogs, which sell apparel, home goods, and gifts, include Midnight Velvet, Monroe & Main, and Ginny’s.

The last day of work for most of the majority of laid-off employees is Jan. 9, with severance packages, available to all of them, beginning Jan. 12, says Hunter. Those who worked with the company for more than 20 years will receive an enhanced pension benefit.

Despite the scaled-back workforce, there are no plans to scale back the Swiss Colony food catalog, which Baumann says is still profitable. “What we really intend to do is ramp it up,” he emphasizes. “I’d say the catalog is in transition, as is the entire food industry.”

Larger manufacturers such as Swiss Colony are competing against smaller companies that offer just a few highly specialized gifts instead of an array of more generic-looking products, Baumann says. He jokes that all you have to do is type “cheese gift” into a search engine to see just how many small, often Internet-based companies Swiss Colony is competing against. Baumann says unenthusiastic consumers may also be responding to dietary concerns when deciding not to buy from Swiss Colony, known best for its high-calorie cheeses.

By fall 2004, Baumann says, the Swiss Colony catalog will feature more novel items in the area of baked goods and candies, presented more creatively. “There is a lot of clutter in the marketplace,” he notes. “We have to design products to break through that clutter.”

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