Interface Decides To Exit Specialty Retail Channel, Cut Jobs

(RTTNews) - Interface Inc. (TILE), a worldwide carpet tile company and global leader in sustainability, said that it has decided to exit the specialty retail channel and will eventually close the majority of its FLOR retail stores between January and the end of April 2017. Interface also will relocate FLOR's headquarters from Chicago to Interface's headquarters in Atlanta.

Additionally, it announced workforce reductions of approximately 70 FLOR team members and a number of other employees in the commercial business in the Americas and Europe regions, and write-downs of certain underutilized and impaired assets.

In connection with the restructuring plan, the Company expects to incur a pre-tax restructuring and asset impairment charge in the fourth quarter of 2016 of approximately $17-19 million, followed by an additional charge in the first quarter of 2017 of approximately $7-9 million. The planned charge in the first quarter of 2017 is primarily related to exit costs associated with the FLOR retail stores, a majority of which are expected to remain open for the first quarter of 2017.

The anticipated charges, which total approximately $25-27 million, are part of a continued effort to streamline costs and more closely align the company's operating structure with its business strategy. The charges are expected to be comprised of approximately $10-11 million of severance expenses, $6-8 million of lease exit costs, $7-8 million for impairment of assets and $1 million of other items. The plan is expected to be substantially completed in the first half of 2017, and is expected to yield annual cost savings of approximately $13-14 million beginning in fiscal year 2017, with approximately $9 million of the savings realized in selling, general and administrative expenses, and $4 million realized in cost of sales.