Despite bankruptcy filing, business as usual for Lenox: Company doesn't expect layoffs in Kinston

Nov 26, 2008 (The Free Press - McClatchy-Tribune Information Services via COMTEX) -- LENXE | Quote | Chart | News | PowerRating -- Lenox Group Inc. has announced it has filed for Chapter 11 bankruptcy.

However, company officials said this should not have much of an impact on its china manufacturing plant in Kinston.

"Our expectation is to emerge out of bankruptcy and continue on as a company," Louis Fantin, senior vice president and general counsel for Lenox, said. "We may be sold to someone else as part of the bankruptcy, but now we are going to continue to operate our business as we've done in the past without interruption, including at our Kinston facility."

Fantin also said he was not aware of any layoffs as a result of the bankruptcy at the Kinston plant.

In a press release issued earlier this week, Chief Executive Officer Marc Pfefferle indicated the intention to not make any significant changes to production or staff was widespread.

"We want to assure our employees, customers, vendors and communities that Lenox is conducting business as usual," Pfefferle said. "While fundamentally sound, our business has been significantly impacted by economic conditions and excessive debt levels incurred at the time Department 56 purchased Lenox, Incorporated in 2005.

"After exhausting all other possibilities and considering the current state of credit markets and the economy, we determined that the best way to complete a restructuring of the balance sheet and protect our franchise value was to pursue the sale of the company under court approval in a chapter 11 proceeding."

Paul Leichtnam, who has been the Kinston plant manager for 15 years and an employee of Lenox for 34, said this is not a reason for anyone to be worried in Lenoir County.

"No, we don't anticipate any layoffs or cutbacks -- we're one part of a big group who has filed for bankruptcy," Leichtnam said. "Our facility is performing well."

It's performing so well, he said, the facility actually added all the jobs it lost following a 2007 cutback, bringing its employee total to around 400.

"This is happening every day throughout the country with a lot of companies," he said, citing Circuit City and Delta Airlines. "A lot of good companies have gone through this and come out as better companies."

Chapter 11 bankruptcy does not entail a business ceasing operations and selling its assets in order to pay back creditors, such as is the case in Chapter 7 bankruptcy. Instead, Lenox will remain in control of its operations, although under the jurisdiction of the court.

Chapter 11 bankruptcy grants a company temporary relief from most of its debts and contracts. In some cases, the court might decide to leave the company's creditors with ownership of the company.

According to the press release, Lenox Group Inc. produces and sells giftware, tabletop and china products through wholesale customers who operate gift, specialty and department store locations in the U.S. and Canada, company-operated retail stores and direct to consumer channels including catalogs, direct mail, media, telemarketing and the Internet.

Lenox, which was founded in 1889, is headquartered in Bristol, Pa., and was purchased by Department 56 for $190 million in 2005. In addition to Kinston, Lenox has offices and production facilities in Lawrenceville, N.J., Langhorne, Pa., Pomona, N.J. and Hagerstown, Md.

Justin Schoenberger can be reached at (252) 559-1075 or jschoenberger@freedomenc.com.

To see more of The Free Press or to subscribe to the newspaper, go to http://www.kinston.com/. Copyright (c) 2008, The Free Press, Kinston, N.C. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index