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Interstate Bakeries gets court OK to consolidate North Central, South Central, Southeast profit centers
By Caroline Salls
Pittsburgh, Dec. 15 - Interstate Bakeries Corp. obtained approval to consolidate sales and retail operations in its North Central, South Central and Southeast profit centers by standardizing distribution and consolidating delivery routes and bakery outlets, according to a Wednesday filing with the U.S. Bankruptcy Court for the Western District of Missouri.
The company's 16 bakeries within these regions are expected to remain open.
Interstate expects to complete the consolidations by mid- to late-December. The consolidations are expected to affect about 450 workers.
Following these consolidations, Interstate will have completed the restructuring of nine of its 10 profit centers and closed seven bakeries. The company expects to complete the last of its consolidations, the one affecting its Upper Midwest profit center, in the first quarter of 2006.
The preliminary estimate of charges to be incurred in connection with the consolidations in the North Central, South Central and Southeast profit centers is $3 million, including about $1 million of severance charges and about $2 million in other charges, with virtually all charges resulting in future cash expenditures.
In addition, the company intends to spend about $3 million in capital expenditures and accrued expenses to implement the consolidation.
The consolidations are part of Interstate's nationwide restructuring efforts. Recently, the company announced the closing of its bakeries in Lakewood, Wash.; Davenport, Iowa; San Francisco; New Bedford, Mass.; Miami, Fla.; and Charlotte, N.C., and the consolidation of routes, depots and thrift stores in its Northwest, Florida, Northeast, California and Mid-Atlantic regions.
The Kansas City, Mo., bakery operator filed for Chapter 11 protection on Sept. 22, 2004. Its case number is 04-45814.
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