A year after acquiring San Luis Obispo-based Dioptics Medical Products, FGX International has announced it is shutting down the local distribution center and laying off 70 percent of the work force.
The eyewear manufacturing company plans to eliminate some 45 jobs by the end of March 2010. Twenty employees will be retained.
No reason for the layoffs was given. Calls to corporate headquarters in Smithfield, R.I., were not returned and the local business office said a news release issued Thursday is the only information that will be made available.
“We regret the need to reduce employment,” Alec Taylor, FGX chief executive officer, said in the release. “We understand the disruptions that layoffs cause in people’s lives and in the community.”
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
The layoffs will primarily impact warehouse, distribution and administrative positions. All the laid-off employees will receive severance packages.
The Dioptics distribution center will be closed and consolidated with FGX’s facility in Smithfield. Those keeping their jobs locally will be marketing, product development and sales personnel.
In spite of the layoffs, the company is committed to maintaining a presence in the San Luis Obispo area, Taylor said.
The news of the layoffs is disappointing, said Dave Garth, president of the San Luis Obispo Chamber of Commerce.
“I hope they will lease out the rest of the building and we can help them find new tenants,” he said.
The loss of the distribution center follows a familiar pattern, Garth said. Local entrepreneurs build a successful business and then sell it to an out-of-town company. High land values and the cost of doing business on the Central Coast are often cited as reasons for closing local facilities.
“When a company sells to out-of-town people, the odds are that we’ll lose the business,” Garth said.
Dioptics Medical Products was founded in 1979 and has been in San Luis Obispo since 1989. It manufactures sunglasses and optical accessories.
In 2005, the company built a sprawling, 116,500-square-foot manufacturing and distribution center on Vachell Lane, valued at more than $4.5 million. There was no word from the company Friday on the fate of the structure.
Long-time Dioptics President and Chief Executive Officer Henry Lane left the company in August 2008. FGX International acquired the company in November for stocks and $35 million in cash.
According to the company’s Web site, FGX International is a leading designer and marketer of nonprescription reading glasses and sunglasses in North America. Two of its most famous trademarked brands are Foster Grant and Magnivision. Its products are sold in more than 57,000 retail outlets worldwide.
FGX stock is traded on NASDAQ (FGXI).
For the six months ended July 4, the company reported net income attributable to FGX International Holdings as $2.28 million, down 64 percent from the year-earlier period.
The company’s earnings for those six months of this year was 10 cents per share, about a third of what it was a year earlier.
Third-quarter results will be released next week.
FGXI closed Friday at $13.19 per share, down .38.