London Fog moving its base back to Md.

January 14, 1995|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

As part of a restructuring that will include layoffs at its Maryland and New York-area operations, London Fog Corp. yesterday announced that it will move its headquarters back to Eldersburg in the next two months, less than a year after moving it to Darien, Conn.

"Long term, I think this is nothing but a positive for the Baltimore area," said Robert E. Gregory Jr., the company chairman and chief executive officer. "I think this will improve the coordination and give us a little bit better focus," he said.

The company also said it will lay off an undetermined number of workers in closing the Darien office, which now has 85 employees, and at Eldersburg as part of the consolidation and a push to scale back some of its product lines. Some Darien jobs will be moved to Eldersburg, others to New York.

In addition to moving executive offices and financial operations from Darien to its Carroll County administrative and distribution center, London Fog is combining its three New York City offices into one, where marketing and design personnel will be located.

Although the move back to Maryland -- where the company was founded -- would return only 15 to 20 jobs, it provides a morale boost to a state that has seen several prominent companies leave in recent years.

"This is truly magic," said Mark L. Wasserman, secretary of the state Department of Economic and Employment Development. "A wayward corporation returns to the fold is perfect."

The return was not contingent on any economic aid to the company, he said, though the state and the company are in discussions about helping in refurbishing the Eldersburg facility, where about 500 people work.

Mr. Gregory, who became head of the company Tuesday, said the move should improve communications in the company. "Every time I tried to have a meeting, two people would be in Maryland, two people would be in New York and two people would be here," he said.

London Fog had been promised $1.5 million in grants in loans from Connecticut to make the move. But the first of the checks received at the end of the year -- when Mr. Gregory was being considered for the top job -- was not accepted. "We have avoided accepting and picking up any problems with it," Mr. Gregory said.

The company's fast action was little surprise to industry experts, who say the company is struggling to stay afloat.

"Given the crisis at London Fog, I expect things to start happening immediately, because I think the company is in a life-or-death situation as we speak," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting firm.

London Fog's biggest problem is trying to persuade creditors to restructure its $425 million debt. Mr. Gregory, who has said the company will not be able to make all its quarterly interest payments this year, says he is confident that a deal can be struck with creditors and the company will not be forced into bankruptcy court.

Mr. Davidowitz is skeptical.

"Ninety-five percent of restructurings that are attempted out of court end up in court," he said. "The problem with it is, in order to make it happen you have to get a lot of people to agree to a lot of things in a certain time period."

The company over the past year has closed five factories in Maryland and Virginia, eliminating 1,300 jobs, and moved production overseas. The last remaining London Fog factory in Baltimore is scheduled to reopen at the end of this month after a three-month renovation.

While the company moved about 15 to 20 top executives to Darien in the middle of last year, it left the distribution and administratives offices in Eldersburg.

The country's pre-eminent maker of men's and women's raincoats, London Fog was founded in Baltimore in 1922. It moved its corporate headquarters in 1976 to Eldersburg.

The move of the company's executive headquarters to Darien in the middle of last year was part of a series of actions by former London Fog Chairman and Chief Executive Officer Arnold P. Cohen, who was ousted from his position last August.

Mr. Cohen, who lived in Westport, Conn., said the headquarters was moved to Connecticut so that executives would be closer to the hub of the clothing industry, New York. At the time, Mr. Cohen said the fact that he lived nearby had little to do with the move.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.