Spiegel Sheds 46% of Workforce

The shrinking of Spiegel Corp. continues: The Downers Grove, IL-based company announced on April 20 that it would lay off 225 employees, or 46% of its workforce.

Under the Workers Adjustment and Retraining Notification (WARN) act, workers were notified that the layoffs would begin April 20 and continue during the next two months. According to spokesperson Debbie Koopman, the majority of the layoffs occurred at Spiegel Catalog in “across the board” job cuts; corporate layoffs were primarily in information services and support staff.

News of the cuts comes just two weeks after Spiegel agreed to sell substantially all the assets of its Newport News women’s apparel business to Pangea Holdings for $25 million. (Pangea is the “stalking horse” bid in a bankruptcy court auction that’s expected to take place by the end of this month.) New York-based Miller Buckfire Lewis Ying & Co., which handled the Newport News deal, has advised the company to also sell its Eddie Bauer catalog/retail unit.

As for Spiegel Catalog, the company says it plans to minimize its operating losses to help facilitate a possible transaction of that business. It wasn’t clear whether a potential buyer now looking at Spiegel Catalog would assume the majority of the current Spiegel workforce.

“While we are involved in active discussions with an interested party, we are continuing to take steps to minimize the ongoing operating losses of the Spiegel Catalog business and to help facilitate any possible transaction,” said Bill Kosturos, interim CEO/chief restructuring officer of The Spiegel Group in a statement. “Although this has been a difficult decision to reach, rationalizing the Spiegel Catalog business will make it a smaller entity.” Koopman would not divulge the name of the “interested party.”

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