UK apparel manufacturer Coats has exclusively confirmed to GlobalData’s Just Style that it has made a number of UK-based redundancies and replaced other roles as part of its global strategy – in the same week the company announced the sale of its Brazil and Argentina business.

Laura Husband, Managing Editor of GlobalData’s Just Style, commented, “Coats, which describes itself as the world’s leading industrial thread manufacturer, has made some organisational changes to its UK operating model as part of its global strategy, according to an official statement provided to GlobalData’s Just Style.”

A spokesperson for Coats told GlobalData’s Just Style: “One element of this [strategy] is to ensure that our regional operating activities are closer to our customers. As a result, some roles have been replaced and some have been made redundant.”

Earlier last week (10 May), Coats announced the sale of its Brazil and Argentina businesses to Reelpar S.A., which is based in Sao Paulo, Brazil.

Coats explained the decision to sell these businesses had not been made lightly, especially given the legacy that Coats had in these countries.

Focus on “strategically important” regions

The company explained: “Coats Brazil has been an integral part of Coats Plc for over 100 years and we are extremely proud of the company and the service it has provided to its customers and communities over many decades. The business enjoys a strong customer base across both B2B and crafts consumer markets, a market-leading stable of brands and experienced, committed employees.”

Coats Group chief executive Rajiv Sharma added: “We believe that, for the Brazil and Argentina business to prosper in the future, it has to reinvent itself to meet the specific needs of the local markets. With this in mind, we felt the best decision to safeguard the future of the organisation was to sell the business to new owners who will be solely focused on the local markets. I would like to take this opportunity to thank all Coats employees in Brazil and Argentina for your continued commitment and wish you all the best for the future.”

Coats pointed out the exit from the businesses in that region is in line with its’ strategic initiatives that were announced in March to accelerate profitable sales growth and transform the company.

The company said it intends to use its strong balance sheet to invest in sustainability, innovation, growth capex and acquisitions.

In March, Coats reported that it had achieved a 3% reduction in waste in 2021 and said 19% of its sales of premium polyester threads were those made of recycled materials in the year.

Reelpar is said to be experienced in building local businesses into profitable enterprises and aims to drive Coats Brazil and Argentina forward.

Husband added, “Following this transaction, Coats said its presence in South America will be focused on Colombia, which continues to be profitable and cash generative. Coats added the sale will allow the group to focus on profitable sales growth in what it describes as the strategically important regions of Asia, Europe, and North/Central America.”