Val-Pak's owner to reduce its staff

About 20 percent of Cox Target Media's work force will be let go as the company merges its direct mailings.

By MARK ALBRIGHT

© St. Petersburg Times, published April 5, 2001

LARGO -- Cox Target Media, owner of the blue Val-Pak and Carol Wright advertising envelopes that show up in millions of mailboxes each week, is closing two printing plants and reducing its work force by about 20 percent.

The direct marketer is closing plants in Las Vegas and Washington, N.C., and this week eliminated the jobs of 75 of about 1,000 employees at its Largo headquarters. Company officials said Wednesday that the cutbacks were part of a recent decision to merge the Carol Wright national advertising mailings with Val-Pak mailings that are filled with local ads sold by 250 franchisees across North America.

The decision comes at a time when advertisers are holding back on spending because of the slowed economy. While many companies that rely on advertising revenues have been tightening their belts, Cox said that did not figure into the cost-cutting.

"We haven't been affected (by the soft advertising climate) yet," said Bill Disbrow, chief executive of Cox Target Media, a closely held unit of Atlanta-based Cox Enterprises. "January was soft, but February and March were pretty strong."

The company thinks producing a single mailing will cost less and require fewer resources to distribute.

The plant closings and job cuts came two weeks after Cox said its two advertising vehicles would be merged. The merged Val-Pak mailing will go to 55-million homes. The Carol Wright mailing that was going to 22-million homes will disappear.

In the process, the company's four production facilities will be cut to two, in Largo and Elm City, N.C.

The Las Vegas plant, which will close in August, employs 250. The Washington, N.C., plant, which closes today, employs 22. The Las Vegas employees will lose their jobs in August, and the printing equipment will be moved to the former Carol Wright plant in Elm City. Most of the 270 employees at the Elm City plant have been furloughed until August, meaning they retain their health insurance benefits but get no hourly pay.

"Tough business decisions are never easy to make, but these are necessary for us to move forward," said Joe Bourdow, executive vice president of operations.

- Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

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