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Applica Set to Downsize, Relocating Headquarters
Apr 13, 2004
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Small appliance maker Applica is relocating its corporate headquarters and 284 workers from Miami Lakes. FL, U.S. to Miramar, FL, U.S. to help cut costs.

The company is in talks with the city of Miramar about collecting incentives for bringing the high-wage jobs, with average pay of more than U.S. $50,000 a year, to the city. No formal deal has been reached, according to company and city officials.

The move to the former Kellstrom Industries headquarters is expected to take place by October 2004.

Applica cut its global workforce 25 percent last year in an effort to shave $25 million to $30 million off its annual expenses, according to U.S. Security and Exchange Commission (SEC) filings.

Those cuts included 16 jobs at its Miami Lakes headquarters and shifting some product development initiatives to factories in China, Applica CEO Harry Schulman said.

The move to the smaller location in Miramar is another prong in the cost-whacking effort, he said.

Applica, which changed its name from Windmere-Durable Holdings in 2000 as part a rebranding strategy, is selling its 145,054-sq-ft headquarters, which it built in 1988. The property's appraised value is $7.4 million, according to county records.

Miami, FL, U.S.-based Isaco International Corp. has signed a contract to buy the building, according to real estate sources. Isaco markets men's and boy's underwear, boxers, sleepwear, loungewear, hosiery, and neckwear under Perry Ellis and other designer brands.

More than half of Applica's Miami Lakes headquarters is warehouse space, which it no longer needs as a result of acquisitions and consolidation of its U.S. distribution operations at an 800,000-sq-ft hub in Little Rock, AR, U.S.

Applica is now leasing 110,000-sq ft of office space in Miramar, FL, U.S.. The 545,000-sq-ft building was built in 1999 by Aviation Sales Co. and fully leased to Kellstrom until March 2004, when it was sold to a Pennsylvania REIT for $26 million.

Applica is the latest in a series of Miami-Dade County companies in Florida, U.S. to jump the border, fueling a running feud between economic development officials in the two counties.

In recent months, the spat appeared to be settling as the economic development agencies in Miami-Dade, Broward and Palm Beach counties in Florida, U.S. worked to create a spirit of regionalism through a joint executive committee meeting in January 2004.

If Miramar decides to hand over incentives to Applica for the move, it could rekindle the feud. The city has been among the most aggressive in paying incentives to Miami-Dade companies.

Carlos Leonard, assistant executive vice president of the Beacon Council, a business-development council for Miami-Dade' County, said the group was aware of Applica's relocation, but there was little it could do to stop the firm from downsizing into an existing building in Miramar.

"We are not aware of any incentives being offered," he said.

City Manager Robert Payton said Miramar's policy is to make sure a company has made a corporate decision to relocate before discussing public relocation incentives to ensure that they are not just fishing for cash.

Mr. Payton said the city has primarily offered to expedite building permits so that Applica can renovate its new headquarters space quickly. But there also is the possibility that the city could pay out cash incentives for the incoming jobs, he said.

"We have to build the best possible city with the highest quality jobs and balance the fact that we are part of a region and don't want to raid Miami-Dade County," Mr. Payton said. "We are making a strong attempt to look at economic development from a regional approach." (South Florida Business Journal)

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