Anthony Holness, chief executive officer, Hardware and Lumber Limited.

In the face of sluggish demand and worsening local and global economic conditions, Hardware and Lumber Limited (H&L), operator of the popular Rapid True Value chain, is battening down - shedding staff and a loss-making outlet in the process.

In a bid to consolidate its operations and maintain its viability and market position as a lead player in the industry, the entity has embarked on a three-pronged restructuring exercise that involves cutting loose more than 80 workers and merging some outlets.

"It is in response to recent developments in market conditions," explains Hardware and Lumber's chief executive officer, Anthony Holness.

Of the 80 positions being made redundant, five are at the executive level, including the chief information officer, chief human resource person, supply chain manager and general managers for its retail and Agro Grace divisions.

$28 million redundancy

While the total cost of the retrenchment was not disclosed and the expected savings were unspecified, the company is doling out approximately $28 million to finance the redundancies involved, which will trim its staff complement to 600. Changes to personnel and completion of the restructuring exercise are expected to continue over the next two months.

Another $9 million is being spent on retraining for the remaining staff.

Chairman Douglas Orane said H&L is under pressure because of the decline in construction GDP, and could remain so until the economy turns around.

Just a month ago the company lost its chief financial officer, Jacqueline Johnson, who resigned with former finance manager of GK Foods, Andrew Kerr, moving in to fill the post in an acting capacity. Another development in the company's workforce is the appointment of Dave Myrie as chief operating officer and deputy chief executive officer since the start of January. Myrie joined the GraceKennedy family in 2007 where he worked in the investments division while also working closely with the management team of H&L.

H&L, valued at $3.3 billion in total assets as reported on its latest balance sheet, has also merged the Agro Grace and Rapid True Value Ocho Rios operations. This merger took effect January 5, with the company exploring the possibility for other similar consolidation.

"It is the first time we are working with this model and we continue to review with the possibility for further similar consolidation," said Holness.

Sav-la-mar branch to be closed

Citing non-performance, and what the H&L CEO described as its unique challenges, the Rapid True Value branch in Savanna-la-Mar will also be closed come the end of January.

Of the over 80 persons to be made redundant, 17 are from this location. H&L retail stores have now shrunk to 17 from 19.

The company is banking on the restructuring exercise to produce a leaner operation with a somewhat flatter structure, better equipped, it says, to respond to customers, while putting the brakes on costs. At the end of the nine-month period to September 2008 H&L racked up operating costs of $1.2 billion, with revenues totalling $5.2 billion.

H&L has been undergoing transformation since 2007 with an investment of over $80 million (US$1.2 million) on a new management information system designed to drive efficiency.

sabrina.gordon@gleanerjm.com