London Fog weighs moving

Its base in Eldersburg may relocate to Seattle, affecting 150 people

September 30, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

Officials at London Fog Industries Inc., which filed for bankruptcy Monday, said yesterday that the company is considering moving its headquarters to its Seattle office to cut costs and avoid duplicating tasks. More than 150 people work in London Fog's corporate headquarters in Eldersburg and another 130 work in the adjoining distribution center.

London Fog purchased Pacific Trail Inc., a Seattle outerwear designer, in 1994, and in March, William Dragon Jr., Pacific Trail's former president, was named London Fog's chief executive officer, though he has remained in Seattle.

A headquarters move would be London Fog's third since 1994 -- a period that also has seen four changes in top management.

In that year the then-chairman and chief executive, Arnold P. Cohen, who ruffled many feathers with his aggressive style, moved the company from Eldersburg to Darien, Conn., near his home. He was fired after a year on the job and the company moved back to Eldersburg a year later.

It is not clear if any of the employees in Eldersburg would be offered jobs in Seattle should their positions be shifted to that office.

"We haven't gotten to that point where we've made all those decisions," Lynne MacFarlane, London Fog's executive vice president for human resources and administration, said yesterday. "Some may and some may not, depending on the positions and if it made financial sense to move people across the country. We do not have a position for or against it."

In announcing the Chapter 11 filing, Dragon said the company would shift its focus away from retail outlets because officials concluded that competing with its department store partners was a bad idea.

About 115 of its 140 stores nationwide, with about 500 to 600 workers, will be closed, although the two outlets in Maryland are expected to remain open.

This summer, the company moved three functions -- customer service, graphic design and sourcing -- to Seattle and none of those approximately 20 employees were given the chance to transfer, she said.

One Eldersburg employee who recently was told she will be laid off after 14 years of service said it's been a trying time at London Fog, which was founded in Baltimore 77 years ago.

"It's sad for the company," said the woman, who asked that her name not be used. "There's a lot of anger, and there are a lot of people who have been here a lot longer than I have."

MacFarlane said the distribution facility is on surer footing because it is still central to operations. Pacific Trail uses a distribution facility in Martinsville, Va., that the company does not own.

"We are looking at how much product we could move to Eldersburg from the outsourcer," MacFarlane said. "If we can maximize the size of the space in Eldersburg, our per-unit cost would go down, so we are looking at that as well."

She said it is unlikely that any more jobs would be cut or moved before the end of the fiscal year, which concludes Feb. 29.

"The decisions we've made, everyone already knows about," she said. "Beyond that, we said, `Look, something potentially may happen but, please, we don't want you to leave, we need you here.' "

Even if more functions are moved West, she said, some operations are likely to stay, such as human resources and janitorial services.

"You need certain support functions if you have a population of people in one location," she said.

Lillie Allen-El, who works in the distribution center packing orders, said these days it's hard to find a job that offers long-term security and she feels that company officials are sharing what they know with workers.

"I just take it one day at a time," said the seven-year veteran. "I'm quite sure a lot of people here are worried about their jobs."

Pub Date: 9/30/99

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