Spiegel lays off 300, loses CFO

On Jan. 31, The Spiegel Group laid off 300 workers from two of its call centers—nearly one-third of the 950 employees at both facilities. Spiegel laid off 200 out of 650 workers from 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 the layoffs were partly due to the conclusion of seasonal workers’ jobs following the 2002 holiday season, Spiegel spokesperson Debbie Koopman says they were also reflective of the company’s 27% decline in overall 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, negating the need for as many telephone order-takers.

With one-third of the Hampton call center’s staff gone and nearly 31% gone from Bothell, might Spiegel be on the verge of consolidating either facility? “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 company can continue as a going concern in response to Spiegel’s most recent 10-K report. The auditor’s opinion “is in accordance with accounting rules and regulations,” Koopman says, “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.

The company will have to handle these matters without a chief financial officer for the time being. On Feb. 5, executive vice president/CFO James Cannataro resigned to take a similar position in another industry, according to a Spiegel release. He leaves the company on Feb. 12. No replacement has been found yet.

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