Bed retailer Select Comfort Corp. said Tuesday it is cutting 120 jobs at its Plymouth headquarters, or about 22 percent of its workforce there, as sales slowed further during the holiday shopping season.
The job reductions, along with other cost-saving measures, are expected to save the company about $15 million a year, Select Comfort said in a prepared statement. The company expects to take a fourth-quarter charge of about $35 million, including $4 million in severance and other costs.
"During the course of the year, we've navigated through an extremely difficult macroeconomic environment by focusing on reducing our cost structure and improving product margins," Select Comfort CEO Bill McLaughlin said in the statement. "We expect these macroeconomic challenges to continue and possibly worsen in 2009."
For the first nine months of this year, Select Comfort reported a net loss of $12.7 million, and revenue was down more than 20 percent as consumers cut back on discretionary spending. Third-quarter sales at stores open at least a year, or same-store sales, were down 27 percent. The company's shares, which have lost 96 percent of their value this year, closed at 26 cents before Tuesday's announcement.
Select Comfort, which said in October that it would close about 20 of its 471 stores in the first quarter of 2009, said it now expects more closings later in the year as it looks to cut more costs.