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AFTER GLOOMY FINANCIALS, REEBOK HINTS AT CHANGE IN TACTICS
Published February 3, 1998
Reebok Int'l, citing "difficult industry conditions," said it will take a pretax restructuring charge of $25M to $35M in the current quarter, according to Jon Auerbach of the WALL STREET JOURNAL. Reebok said the charge will be used for "eliminating management layers" and to combine business units. Company CEO Paul Fireman said the moves "allow us to compete more effectively in the short-term." The news came as Reebok released its fourth-quarter and year-end financial reports, which were generally "in line with analysts' expectations." For the year, net income fell 3% to $135.1M, down from $139M. The latest figure included pretax charges of $58.2M and a $40M income tax credit related to the sale of Avia. Reebok said that results from the first quarter of '98 would continue to lag, but it is expecting profit margins to improve in the second half of this year (WALL STREET JOURNAL, 2/3). The BOSTON GLOBE reports that Reebok said it will cut management jobs, combine units and centralize operations. It will also emphasize apparel and shoes carrying the Greg Norman and Ralph Lauren brands and increase its efforts to sell more casual brown leather shoes (BOSTON GLOBE, 2/3).