Facility Closures & Downsizings: Hostess Wind-Down a Wind-Up for Other Bakeries

After winning bankruptcy court approval to close down its business, Hostess Brands began the process of shuttering its 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores resulting in the loss of 18,500 jobs.

---

Share this story with your followers Tweet

---

Among other provisions, the court order provides Hostess Brands with added liquidity through an amended debtor-in-possession financing agreement and consensual use of cash collateral; and authorizes the company to implement a non-executive employee retention plan to ensure the company has the necessary personnel to wind down its operations.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands. Bidders have already started to emerge. This week, Cookies & Sweets Bakeries with headquarters in Pine Bluff, AR, filed a motion with the courts to buy Hostess Brands. The bakery said it would take itself public in December, which would allow it to offer employee stock options and it would set up a new headquarters in Detroit to run the business.

Another potential buyer could be Flowers Foods Inc. Moody’s Investors Service said a liquidation of Hostess would be credit positive for Flowers Foods because the fresh bakery company would likely purchase some of Hostess’ bakery assets, which would allow it to accelerate its expansion in the northern United States.

Flowers recently stepped up its acquisition activity to accelerate expansion beyond its core territories in the U.S. South. The company expects acquisitions to generate 2%-5% of its annual sales growth. Last March, the company raised $400 million in senior unsecured notes partly to fund acquisitions. In July, Flowers completed the acquisition of Lepage Bakeries Inc., an Auburn, ME-based regional producer of breads, rolls, and donuts, for $370 million. The acquisition was Flowers’ largest to date, and completed its US east coast distribution coverage through Maine.

Hostess Plant Status

Birmingham, AL: Closed
Anchorage, AK: Closed
Los Angeles, CA (Hostess): Closed
Los Angeles, CA (Dolly): Closed
Oakland, CA: Closed
Sacramento, CA: Closed
Denver, CO: Closed
Jacksonville, FL: Closed
Orlando, FL: Closed
Columbus, GA: Closed
Hodgkins, IL: Closed
Peoria, IL: Closed
Schiller Park, IL: Closed
Columbus, IN: Closed
Indianapolis, IN: Closed
Waterloo, IA: Closed
Emporia, KS: Closed
Lenexa, KS: Closed
Alexandria, LA: Closed
Biddeford, ME: Closed
Boonville, MO: Closed
St. Louis, MO: Closed
Billings, MT: Closed
Henderson, NV: Closed
Wayne, NJ: Closed
Rocky Mount, NC: Closed
Cincinnati, OH: Closed
Defiance, OH: Closed
Northwood, OH: Closed
Tulsa, OK: Closed
Philadelphia, PA: Closed
Knoxville, TN: Closed
Memphis, TN: Closed
Ogden, UT: Closed
Salt Lake City, UT: Closed
Seattle, WA: Closed

---

P&G Nearly Doubling Layoff Projections

Procter & Gamble reiterated its plans to shave about $6 billion from its cost of goods sold, $1 billion from marketing efficiencies and $3 billion from core selling, general and administrative (SG&A) overhead costs. In doing so, it upped the number of job positions it plans to eliminate.

Earlier this year, Cincinnati-based P&G said it was targeting non-manufacturing employment reductions of 5,700 positions by the end of fiscal year 2013.

Now, P&G is upping the layoff number an additional 2% to 4% per year through fiscal years 2014 to 2016 to strengthen its ability to achieve its savings objectives. That would amount to additional job reductions of from 2,280 to 4,560 positions.

---

TI To Cut 5% of Workforce

Texas Instruments (TI) plans to reduce costs and focus investments in its wireless business on embedded markets with greater potential for sustainable growth. Cost reductions include the elimination of about 1,700 jobs worldwide. The layoffs amount to about 5% of the Dallas-based firm’s total workforce.

TI estimates that these actions will be substantially complete by the end of 2013. Total charges for these actions are estimated to be about $325 million.

As a result of these actions, TI expects annualized savings of about $450 million by the end of 2013.

---

Facility Closures & Downsizings

.	Company	Address	City	State	Closure or Layoff	Layoff Number	Impact Date
.	Joie De Vivre Hospitality (Hotel Durant)	2600 Durant Ave.	Berkeley	CA	Layoff	79	12/21/2012
.	NBC Universal Media	3000 W. Alameda Ave.	Burbank	CA	Layoff	50	12/31/2012
.	Technicolor Creative Services	2255 N. Ontario St., Suite 300	Burbank	CA	Closure	60	12/17/2012
.	Walt Disney Pictures	500 S. Buena Vista St.	Burbank	CA	Layoff	67	12/1/2012
.	Rome Research Corp.	18000 E. Perimeter Road	Camp Roberts	CA	Layoff	56	12/31/2012
.	Carewise Health (Landacorp Division Of Shps)	500 Orient St., Suite 110	Chico	CA	Closure	88	12/31/2012
.	Parsec	17225 E. Arenth Ave.	City of Industry	CA	Closure	44	12/31/2012
.	Wells Fargo	1220 Concord Ave.	Concord	CA	Layoff	57	12/30/2012
.	Ralphs Grocery	9091 Garfield	Fountain Valley	CA	Layoff	51	12/9/2012
.	Renaissance Doors & Windows	2452 W. Commonwealth Ave.	Fullerton	CA	Closure	78	12/4/2012
.	Corix Utilities	11752 Markon Drive	Garden Grove	CA	Closure	33	12/20/2012
.	NBTY Acquisition LLC	7366 Orangewood	Garden Grove	CA	Layoff	44	12/19/2012
.	Caterpillar Logistics	25972 Eden Landing Road	Hayward	CA	Closure	10	12/14/2012
.	Southern California Edison	18 Centerpointe Drive	La Palma	CA	Layoff	17	12/31/2012
.	Cricket Communications	1100 Glendon Ave., Suite 1900	Los Angeles	CA	Layoff	15	12/9/2012
.	Deluxe Laboratories	1377 N. Serrano Ave.	Los Angeles	CA	Layoff	55	12/21/2012
.	NBC Universal Media	5750 Wilshire	Los Angeles	CA	Layoff	156	12/31/2012
.	Parsec	750 Lamar St.	Los Angeles	CA	Closure	61	12/31/2012
.	Toyota Central (McCall Automotive)	1600 S. Figueroa	Los Angeles	CA	Closure	130	12/14/2012
.	Bimbo Bakeries	480 S. Vail Ave.	Montebello	CA	Layoff	121	12/31/2012
.	W Silicon Valley Hotel (W Hotel Management)	8200 Gateway Blvd.	Newark	CA	Layoff	68	12/18/2012
.	Philips (Discus Dental)	12121 W. Bluff Creek Drive, Suite 100	Playa Vista	CA	Closure	58	12/31/2012
.	Southern California Edison	5000 Pacific Coast Highway	San Clemente	CA	Layoff	90	12/14/2012
.	Abercrombie & Fitch	90 Horton Plaza	San Diego	CA	Closure	66	12/29/2012
.	Cricket Communications	5887 Copley Drive	San Diego	CA	Layoff	49	12/9/2012
.	Bigpoint	500 Howard St., Suite 300	San Francisco	CA	Layoff	47	12/22/2012
.	Janssen Alzheimer	700 Gateway Blvd.	South San Francisco	CA	Layoff	119	12/21/2012
.	Bimbo Bakeries (Earthgrains Baking Cos.)	2651 S. Airport Way	Stockton	CA	Closure	125	12/29/2012
.	Stockton Sportservice	248 W. Fremont St.	Stockton	CA	Closure	86	12/9/2012
.	W&F Manufacturing	10635 Keswick St.	Sun Valley	CA	Closure	28	12/7/2012
.	St. Jude Medical	15900 Valley View Court	Sylmar	CA	Layoff	114	12/31/2012
.	NBC Universal Media	100 Universal City Plaza	Universal City	CA	Layoff	74	12/31/2012
.	NBTY Acquisition LLC	27655-B North Avenue Hopkins	Valencia	CA	Closure	68	12/19/2012
.	Corix Utilities	6941 W. Goshen	Visalia	CA	Closure	45	12/20/2012
.	Citygrid Media	8833 W. Sunset Blvd.	West Hollywood	CA	Layoff	80	12/9/2012

---

Keep up weekly on national news, trends and property leads with the Watch List Newsletter, a weekly pdf that includes other news and leads not found on the CoStar Group web news pages. Sign up for the Watch List E-Mail Alert. A new issue is published late each Wednesday.

---

Advertisement:
Freedom Realty Exchange (FRE.com)- Land, Office, Industrial, Residential, Commercial Real Estate Auctions