Crocs gives boot to Quebec City plant
Footwear maker Crocs Inc. is closing a manufacturing plant in Quebec City, putting 669 people out of work, as the company moves production to cheaper areas.
The company, which is based in Niwot, Colo., said late Monday that the closure comes amid reduced demand for its products.
Crocs said 262 of the plant workers have already been laid off in recent months. The remaining 407 will lose their jobs by the end of July.
"The retail environment in the U.S. has become increasingly challenging as consumer spending and traffic levels have slowed," said Crocs CEO Ron Snyder.
"Retailers in general are planning more cautiously, and therefore, we did not experience the level of … business we originally expected. In addition, because of our current expense structure, a shortfall in sales versus our expectations disproportionately impacts our earnings results," Snyder said in statement.
Production from the Quebec City plant will move to plants in Mexico, Brazil, China and Romania, while about 100 sales and marketing jobs will remain in the city, a company spokeswoman told Bloomberg.
The company said it will take a $16 million US charge to cover the cost of shutting down the Quebec City plant.
Amid the weakening retail situation, Crocs cut its financial outlook for the first quarter and the full year.
The company said it expects its first quarter revenue to be in the approximate range of $195 million to $200 million US, and it expects a report anywhere between breakeven and a loss of five cents per share. In February, the company said it was expecting revenues of $225 million US and a profit of 46 cents per diluted share.
Investors reacted to the weaker outlook by sending shares of Crocs down 43 per cent on Nasdaq. The stock was off $7.68 US at $10.11 US.