Wolff Fording & Company laid off 47 employees Monday, leaving just five workers at a business that employed 120 when it was sold earlier this month.
The dance costume company’s factory in Shockoe Bottom, which has operated there since the late 1970s, also will be closed, according to a letter given to employees.
Ben Droste, the company’s controller, said he and other employees were called into a meeting Monday afternoon and told they were losing their jobs.
According to several people who were in the meeting, Richard Shuster, the company’s interim CEO, announced that a further analysis of Wolff Fording’s financial situation revealed the need to cut more costs to save the company.
Shuster is an employee of Vert Capital, a California-based private-equity business that bought a controlling stake in Wolff Fording on June 3. Stuart and Jeffrey Feldstein, brothers who ran the business for 30 years before selling, took over the business from their parents, who bought Wolff Fording in 1959.
The second round of layoffs became necessary, Shuster said, after the new owners completed a more thorough analysis of the company’s financial position.
“We certainly didn’t anticipate a cut to such a small team,” Shuster said. “Right now we are evaluating our options and looking at possible strategic relationships for manufacturing.”
Shuster said his primary role is to be a consultant during Wolff Fording’s transition and that the company would likely look for a new CEO in the coming months.
After buying a controlling stake in Wolff Fording this month, executives from Vert Capital said they were looking forward to working with the company’s employees and positioning the manufacturing business for future growth. A day later, they laid off 67 people.
Some of the employees who were laid off in the first round said they were initially unable to cash or deposit their final paychecks, which were handed out Friday.
Shuster said transferring money from Vert Capital to Wolff Fording’s bank accounts had taken longer than expected and that those problems were being fixed as fast as possible.
Calvin Cash, who managed the company’s retail store, said she was able to cash her check Monday.
Cash said she’s been in touch with some of her former co-workers. She said they’ve been filing for unemployment benefits and trying to stay in touch with one another. Cash said she can’t understand Vert Capital’s actions.
“What was their goal in buying the company?” she asked.
Shuster said the factory was unprofitable, inefficient and used outdated technology. He said he understood the Feldsteins’ reluctance to make major changes and let go employees who had worked there for decades.
“It was completely inefficient, and we made the decision that there were probably others who can do the manufacturing better than us,” he said. “Changes to the business were inevitable, but it isn’t easy for anyone.”
In the letter to employees distributed Monday, Shuster wrote that workers were being notified of the layoff under the Workers Adjustment and Retraining Notification Act. The WARN Act is a federal law that requires employers to provide 60 days of notice before closing a plant or laying off large numbers of employees.
Shuster wrote that the business did not give 60 days of notice because it thought providing that notice “would have precluded its ability to obtain the new capital necessary to prevent it from completely ceasing operations.”
Shuster also wrote that Vert Capital “faced business conditions at (Wolff Fording) that were not foreseeable at the time of purchase and thus were unable to anticipate the need for this plant closing until now.”
The WARN Act says companies are exempt from the 60-day rule when they intend to close the plant and where giving notice would “ruin the opportunity to get the new capital or business.”
Shannon McCallister, who worked as a marketing specialist before losing her job Monday, said employees were proud that the company’s dancewear was made at a factory in Richmond, not overseas.
“We’re hurting. We did everything right,” McCallister said. “We showed up, worked hard, gave 110 percent and then we were kicked out on our butts with the feeling that no one had our backs.”
Jacob Geiger is director of Work It, Richmond. He can be reached at firstname.lastname@example.org or (804) 649-6874.