Troubled US baked goods group Interstate Bakeries is to close down its bread business in Southern California, making around 1,300 employees redundant.
Interstate said it plans to close four bakeries, 17 distribution centres and 19 outlets, and eliminate 325 routes by 29 October, as it exited the bread sector in that part of the state..
The company said it expects to take charges of about $29.2m in relation to the closures and redundancies.
However, Interstate said it would continue to bake, sell and deliver Hostess and Dolly Madison snack cakes and donuts in the Southern California region.
“Because of its impact on employees and their families, exiting a market is probably the most difficult decision a company can make,” Interstate Bakeries CEO Craig Jung said. “At the same time, our primary consideration has to be the company’s long-term survival and financial health. While IBC has made marked progress in several problem markets over the past six months, bread operations in Southern California continue to be unprofitable.”
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In June, Interstate Bakeries won a four-month extension to file its Chapter 11 reorganisation plan, detailing how it will repay creditors.
The company, whose brands include Hostess Twinkies and Wonder bread, filed for Chapter 11 bankruptcy protection three years ago.