Knickerbocker Plands 25% Staff Cut

L.A. Times Archives

Sept. 29, 1998 12 AM PT

<i> From Times Staff and Wire Reports</i>

L.L. Knickerbocker Co. Inc. said Monday that it plans to eliminate about 25% of its 290-employee work force in the U.S. to save money.

The Lake Forest company, which markets a variety of collectible dolls and toys, lost $4.4 million last year, and its revenue for the first two quarters this year has fallen below year-earlier levels.

The stock also has been in a slump, hitting a 52-week low of $1 earlier this month. So far this year, the shares have lost 80% of their value. The stock closed Monday at $1.13, up 3 cents a share, in Nasdaq trading.

In addition to eliminating about 70 jobs, the company also said it plans to close facilities in Maine, New York and Pennsylvania. Its Georgetown Collection production line of porcelain dolls will be transferred from Portland, Me., to California.

The company, which lost more than $2.5 million in the second quarter on a 24% drop in revenue, said it expects to save $2 million annually from the cost-cutting moves. It did not provide more details on the locations of the job cuts. Executives were unavailable for further comment.

The company is attempting to focus on its core business, streamline operations and return to profitability, Chief Operating Officer Robert West said in a prepared statement.

In August, Knickerbocker formed a new wholly owned unit to manage the investment arm of the business. The company began diversifying two years ago, investing in Pure Energy Corp., which holds the exclusive license to manufacture and distribute an alternative fuel developed at Princeton University.

Knickerbocker said its Magic Attic product line will remain in Maine at its existing 40,000-square-foot facility, and 13 of the 50 employees assigned to the Georgetown Collection line are being transferred to Magic Attic operations, the company said.

The Magic Attic product lines consist of the Magic Attic Club and the Magic Attic Press divisions. The Magic Attic Club is a catalog collection that features a series of vinyl dolls, doll clothing and accessories, all of which are based on theme books published by Magic Attic Press, targeting girls in the 6-to-12 age group.

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Grim Figures

L.L. Knickerbocker, which has posted losses and declining sales, is cutting 25% of its U.S. work force. The stock also has been slumping. The company’s sales, net income and monthly closing stock prices:

Net Sales (millions)

1997

1st qtr.: $13.44

2nd: $17.61

3rd: $14.11

4th: $23.13

1998

1st qtr.: $11.48

2nd: $13.43

Net Income (millions)

1997

1st qtr.: $-3.84