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Topps Co., the maker of Bazooka bubble gum and baseball trading cards, is no longer pursuing a sale of its confectionery business, but will cut management jobs to save money, according to Reuters.
Company officials said Topps was unable to find a buyer willing to pay what the company thought the confectionery business was worth. It did not specify an amount.
The company said it is eliminating an unspecified number of upper- and middle-management jobs, saving about $2.5 million a year, and adding marketing and product development personnel at a cost of nearly $900,000.
Topps had hired Lehman Brothers Inc. earlier this year to help with a review of its U.S. businesses. The review lasted nearly seven months.
A portfolio manager at Pembridge Capital Management LLC, a New York investment firm that launched a proxy contest this year complaining about Topps's operating performance and stock price, criticized the company's announcement. "It's incredible that the best idea that Topps management came up with is $2.5 million of annual cost savings," said Timothy Brog of the Pembridge Value Opportunity Fund. "Shareholders are tired of excuses from the board and management. Individuals on the board and in management should voluntarily resign."
Topps did not immediately return a call seeking comment. In a statement, CEO Arthur Shorin called the changes "important steps in an ongoing process of improvement."
In June, Topps said Pembridge agreed to stop its efforts to name three directors to Topps's board. Topps agreed to pay Pembridge's proxy costs and not to adopt a "poison pill" to thwart hostile takeovers, without stockholder approval, before June 30, 2006.
Topps on June 28 said first-quarter profit fell 78 percent, hurt by declining sales of trading cards and legal costs from the proxy fight.