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Tropical defines new priorities
By MARK ALBRIGHT, Times Staff Writer
TAMPA -- After swallowing some big losses and forcing out a chief executive accused of lavishing too much on frills, the new regime at Tropical Sportswear Int'l Corp. wanted shareholders to know the struggling company is on a cost-cutting kick. They printed the annual report in black and white with no slick color photos. Instead of croissants and fresh fruit, the only solid food offered at the company's annual shareholders' meeting on Tuesday was sugar cookies from Sam's Club. Officials said both of the apparelmaker's corporate jets are being sold, an attempt to start a new luxury brand is being ditched and as much as to two floors in Tropical's new $16-million, five-story corporate headquarters on West Waters Avenue in Tampa may be rented to outsiders. In addition to former CEO Bill Compton, who agreed to leave partly because of health reasons, Tropical eliminated the jobs of "fewer than 50" supervisors and middle managers in the past two months, according to Tropical executives. They declined to say why or how much salary was saved. But some who lost their jobs think they were purged because of loyalty to Compton, who revived the 75-year-old company, took it public and was Tropical's principal creative force. An internal report accused Compton of spending company funds for personal reasons, which he denied. Officials expect no more job cuts, but said cost-cutting remains a priority. "If we don't need something, we are learning to live without it," said Christopher Munday, Tropical's new president and chief executive. "There are no sacred cows." Shareholders at the meeting nonetheless lashed out at performance bonuses that doubled salaries for the company's five top executives last year. They called the new headquarters building that opens in March a "white elephant" and the $17.9-million purchase of Duck Head Apparel a "dead duck." They jumped on a board they accused of letting problems get out of hand. "All these problems should not have been a big surprise to the board," said Richard Reina, a Tampa retiree who invested in Tropical stock months before the company's dismal performance caused the price to collapse. "They should be embarrassed." Despite such complaints, shareholders approved quadrupling the number of stock options available for future management incentives. "The new management team did seem to be suitably contrite," said Richard Flemings, a retired CPA who has a small stake in Tropical. Now comes the hard part for management. "We have lost a lot of shareholder confidence in the last 90 days," Munday said. "Eliminating costs and building equity in our key brands is the way to regain it." The company doesn't expect to get its inventory back to normal until later this quarter. It's still suffering from the bungled consolidation of a closed plant in El Paso, Texas, that helped turn Tropical's holiday season into a disaster. The company's strongest brand, Savane, has been losing market share to Levi's Dockers and Haggar. After Tropical recently decided to sell Savane through moderately priced chains such as JCPenney, Mervyn's and Kohl's, department stores such as Dillard's stopped carrying the line. Instead, Dillard's carries Tropical's private label khaki pants. Tropical, which spends a minimal amount on advertising, also developed a stain-resistant, Teflon-coated fabric and an expandable waistband. Both are supposed to counter new features heavily promoted by Levi's Dockers. Meanwhile sales of Tropical's Farah and Flyers brands declined at Wal-Mart and its Sam's Club unit to 31 percent of revenues in 2002, down from 36 percent in 2001. Long term, however, Tropical, which does most of its assembly work in Mexico and the Caribbean, faces competing more directly with Chinese manufacturers when protectionist quotas are phased out in 2005. Shares in Tropical closed at $5.05 on Tuesday, up 6 cents. -- Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.
 © 2006 • All Rights Reserved • St. Petersburg Times
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From the Times Business report
From the AP
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