Blog: Time for a detox at Constellation
Olly Wehring | 25 March 2009
After every high comes a low, and so it is for Constellation Brands, which is looking to shed pounds as rapidly as a catwalk model in January.
The California-based group has today (25 March) announced plans to cut 5% of its global workforce, while it also reduced earnings guidance.
Granted, 5% of its workforce amounts to around 450 jobs worldwide - something that would barely cause a ripple in the car industry these days - but the move marks a period of firm retrenchment for a company that has spent years focusing on acquisitions.
In hindsight, ample forewarning was given in Constellation's third quarter results, when the group said that it would focus on cost savings and debt repayment for the remainder of its fiscal year and in the 12 months following.
Troy Christensen, president of Constellation's European business, told just-drinks in January that the firm would look to "clean up" its wine portfolio in 2009.
It is like the company has visited the sales, bought a bundle of clothes without trying them on, and is now working out what it wants to keep.
For the rest of the industry, Constellation's move will undoubtedly cause concern. Constellation, afterall, is the biggest wine firm in the world. In other words, if Constellation is having problems, what lies in store for everyone else?
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