BlueLinx may close distribution centers

BlueLinx Holdings, an Atlanta building product distributor, announced a restructuring plan this week that could include closing distribution centers.

BlueLinx lost $12.7 million in the first three months of the year, and in a statement last month, former president and CEO George Judd said specialty sales declined in two of the company’s largest regions. Tuesday, the company announced a “strategic restructuring plan” to improve efficiency in its operations that it said includes realignment at its headquarters. It will also review five distribution centers, and will consider selling or closing them.

The decision is expected in the third quarter of the year.

The move will be used to support growth, the company said. It will take between $11.5 and $12.5 million in pre-tax restructuring charges related to the plan, and Judd’s departure, which was announced earlier this month. Without the distribution center changes, the company expects to save between $9 and $10 million. After the changes, the company said it expects its business to generate between $25 and $27 million in operating cash a year, some of which will be used to pay down long-term debt, and some of which will be invested in other markets.

“The actions we announced today better focus our business and demonstrate our strong commitment to returning BlueLinx to profitability in the current operating environment,” executive chairman Howard Cohen said in a statement.

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