Spiegel Cuts 300 Jobs, Faces SEC Investigation

On Jan. 31, The Spiegel Group laid off 300 workers from two of its call centers — nearly one-third of the 950 employees at the facilities. Spiegel laid off 200 of the 650 workers at its Bothell, WA, call center, which handles orders for the Eddie Bauer, Newport News, and Spiegel catalogs. The company also let go 100 of its 740 staffers at its Hampton, VA, call center, which handles primarily Newport News orders.

Although some of the jobs were scheduled to end after the 2002 holiday season, Spiegel spokesperson Debbie Koopman says that the layoffs also reflect the company’s 27% decline in catalog sales. “We need to adjust our staffing to be in line with our business needs,” she says. In addition, the company is receiving more orders via its Websites and therefore requires fewer telephone order-takers.

Might Spiegel be on the verge of consolidating the facilities? “That would be totally premature,” Koopman says. “We have no plans to close any facilities. But like any business, we’ll continue to monitor our needs and make any adjustments as necessary.”

And as if didn’t have enough on its plate, Spiegel is being investigated by the Securities and Exchange Commission (SEC) because of its late filings of its 2001 annual report and its 2002 quarterly reports. Koopman says the investigation began in January. The investigation focuses on “a lot of things that transpired in 2002,” Koopman says. “We’re cooperating.”

Furthermore, Spiegel’s auditor on Feb. 4 raised serious doubts that the catalog company can continue as a going concern in response to Spiegel’s most recent 10-K report. But Koopman says that the auditor’s opinion “is in accordance with accounting rules and regulations that say you have to raise these matters under [Spiegel’s] circumstances.”

The 10-K report acknowledges that Spiegel is not in compliance with an agreement to obtain an amended settlement with the insurer of its asset-backed securitization transactions. “We continue to work with our bank to restructure these matters,” Koopman says.

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