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Restructuring
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9 Months Ended |
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Aug. 31, 2014
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| Restructuring and Related Activities [Abstract] | |
| RESTRUCTURING |
RESTRUCTURING
On January 20, 2014, the Company announced that its Board of Directors has approved management’s plan to restructure the Company’s operations, and enter into a key business partnership with The Emerson Group, a premier sales and marketing company located in Wayne, Pennsylvania. As part of this change, the Company has outsourced to Emerson certain sales and administrative functions effective February 1, 2014. In addition, warehousing and shipping was outsourced to Ozburn-Hessey Logistics "OHL", one of the largest integrated global supply chain management companies in the United States. The Company’s inventory was moved to an OHL-managed facility in Indianapolis, Indiana and shipping commenced from there as of the week of February 3, 2014. A key benefit of the outsourcing move is that it shifted a substantial portion of the Company’s current fixed costs into a variable cost structure moving forward which can ultimately help keep expenses in better alignment with any future revenue generated by its brands. This action could also potentially save the Company over $3,500,000 per year in overhead expenses over the course of the first twelve months following the effective date of the outsourcing transition based on performance of its brands in fiscal 2014. As a result of the outsourcing, the Company will have reduced its work force from 97 to 24 employees when complete. As of August 31, 2014, the Company's workforce has been reduced to 43 employees. The reduction began as of February 1, 2014, with personnel leaving through January 2015. The Company has estimated that it will incur severance costs related to the reduction in work force of $530,522, reduced from February 28, 2014 amount of $547,047 by $16,525. As of August 31, 2014, the Company had paid $438,433 in severance costs, with the balance of $92,089 to be paid during the fourth quarter of fiscal 2014 and the first quarter of fiscal 2015.
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