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Polo Ralph Lauren to move distribution operation

November 09, 2009|By MATTHEW UMSTEAD

MARTINSBURG, W.VA. -- Polo Ralph Lauren Corp. announced Monday it will move distribution operations from Berkeley County to North Carolina in the next nine months, a relocation that will affect "100 or so" full-time and part-time workers, a company spokesperson confirmed.

Those workers will have an opportunity to move to the Greensboro/High Point, N.C., area or receive severance packages and assistance in finding other employment, said Julie Berman, senior vice president of corporate communications for the company.

"We take this very seriously," Berman said.

She said the company's employees are like "family" and deserved advance notice of the company's cost-saving move.

The company -- which designs, markets and distributes apparel, home accessories and fragrances -- leases a 187,000-square-foot building for the Ralph Lauren Childrenswear product line at 748 Novak Drive. The building is in the John D. Rockefeller Technology Business Park next to West Virginia Eastern Regional Airport.

S. Schwab Co., which originally had a licensing agreement with Ralph Lauren when the facility opened in 1999, remains the building's owner, Berkeley County Development Authority Executive Director Stephen Christian said Monday.

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"We have known for several months that the lease on the Martinsburg facility was ending, and that there was a significant possibility that the company would look to cut costs and consolidate into underutilized facilities," Christian said in a news release.

"This was strictly a decision made on corporate internal structural analysis to lower overhead and create efficiencies within existing facilities," he said in the release.

"The company has been very pleased with the work force, and business environment here in Berkeley County. They just have an empty facility in North Carolina, and so they can't justify continuing to lease the Martinsburg building. I'm very disappointed, but it's as simple as that," Christian said.

The facility in North Carolina serves a number of other clothing divisions, Christian said.

The company's board of directors on Friday declared a regular quarterly cash dividend of 10 cents per share on the company's common stock, which was a 100 percent increase over the previous quarter, and the board authorized an additional $225 million stock repurchase program for a total of $431 million, according to an investor relations news release posted online.

The New York-based company's decision comes about five years after it bought its licensing agreement with S. Schwab in July 2004, according to Christian and Berman.

Christian, who was working with the state economic development office at that time and helped bring the project to West Virginia, and the late Gov. Cecil Underwood attended the distribution center's dedication in May 1999. At that time, S. Schwab Co. was expected to employ about 140 people. Christian said Monday he believed employment topped 200 at one point before declining with the economy.

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