Manufacturing News

No more manufacturing for Pacific Brands

Pacific Brands chief Sue Morphet has announced the company is pulling out of manufacturing with 1850 jobs including 553 in Victoria and 597 in New South Wales to go.

Sue Morphet said after a lengthy review of the group’s stable of famous brands, she concluded that there is “no longer a sustainable advantage for us from local manufacturing”.

Pacific Brands had persevered longer than competitors with local manufacturing, “but our future is not in manufacturing,” she said.

Internal pressures on Pacific Brands drove this change: after being acquired by private equity investors, the group refloated in 2004, with a debt load that worked then, but left it exposed after the financial crisis as dates for debt renegotiations loomed.

Part of the problem was Pacific Brands was supporting too many brands – or at least, too many brands that were generating insufficient income: in a presentation Morphet gave to analysts it showed that the group owns 200 brands that have sales of less than $500,000 a year, and that these brands between them represent only 2% of sales.

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