CHATTANOOGA, TENN.—The Dixie Group recently implemented a number of cost reduction plans, the latest of which includes a realignment of its organizational structure. According to COO Dan Frierson, the moves are intended to reduce expenses by approximately $8 million to $10 million for 2010 from current levels.

The largest initiative is combining Dixie’s three residential carpet units into one business with three distinct brands: Masland, Fabrica and Dixie Home. As a result, the residential business will be organized much like Dixie’s commercial business and more like the rest of the industry.

“We have held these businesses as different units because they came through acquisitions,” Frierson said. “That structure worked well in a growing environment, but in the one we’ve had for the last year, it simply was too expensive.”

Under the new structure, Kennedy Frierson, formerly president of Masland Residential, will become COO of the company with responsibility for all sales and manufacturing. Paul Comisky, formerly president of Dixie Home, will assume leadership of residential sales and marketing for all three brands, and Ken Dempsey will continue leading commercial sales and marketing. Craig Lapeere, who was president of Fabrica, will stay on as the West Coast vice president of sales.

“The new structure should enable us to improve our responsiveness to customers’ changing needs and market conditions as well as enhance our operating capability while significantly reducing costs,” Frierson said. “We will continue to build and invest in our brands—each has a distinct character and is designed to appeal to and attract different customers.”

Frierson noted the company previously had three separate organizations on the residential side of the business, including product development and accounting. “What we’re doing is collapsing that into one but continuing to have the three brands—it’s very important the brands continue to be separate and distinct.”

With the move, Dixie eliminated a fair amount of sales management, Frierson added. In some cases, there was not enough business to support individual salespeople for a particular brand.

Gary Harmon will retire as CFO at the end of the third quarter, and David Polley, vice president of marketing, will also be retiring in the fourth quarter.

Frierson reassured customers there “will continue to be a commitment to each brand. We’ve introduced more product in 2009 than we ever have in each brand.”

For more information, please call 423.510.7010.