Harris Teeter 1998 Annual Report Download - page 16

Ruddick Corporation
and Subsidiaries
14
American & Efird
either through the creation of wholly
owned subsidiaries or licensing arrange-
ments such as the one we currently have in
Sri Lanka. We also made the decision in
the third fiscal quarter to withdraw from
the Korean market. Results for the year
were impacted by $5.4 million in lost oper-
ating profit related to these operations and
withdrawal.
A&E remains focused on continu-
ous improvements in quality, productivity
and service.
Changing Environment
In addition to the Asian financial cri-
sis, three significant market challenges had
an impact on A&E during fiscal 1998. First,
apparel produced domestically continued
to shift to Mexico, Latin America and
Canada for manufacture. Second, imports
from Asia continued to increase at a
record pace as more retailers sourced pri-
vate store brands direct. Third, consumer
buying trends toward designer-branded
apparel hurt basic apparel items such as
jeans and this trend reduced total units
sold at retail. Despite these influences,
A&E was able to retain strong operating
margins during the year.
Reacting Rapidly
In response to these dramatic changes
in our operating environment, A&E took a
number of steps, including reducing operat-
ing schedules, conserving and redeploying
assets, increasing productivity, decreasing
inventories and containing costs. We
strengthened our manufacturing and dis-
tribution capabilities in Mexico and Latin
America, which continue to experience
steady growth. We are also aggressively
focused on finding new opportunities for
sales growth and profit potential in Asia,
Senior Vice Presidents
Craig Stover (Finance),
Ron Ensley (Manufact-
uring) and Les Miller
(Sales) lead a group of
experienced, motivated
and skilled associates at
A&E who strive to contin-
ually enhance the quality
of thread and its delivery
to customers worldwide.