G&K Services Nets $6.6M In Two Divestitures
G&K Services, Inc., divested two business units and said Monday that the $6.6 million in proceeds will improve the company’s overall profit margins and return on invested capital.
The Minneapolis-based company—which manufactures uniforms and provides facility cleaning and storage supplies—sold its direct sale program business (which sells products directly to consumers from fixed retail locations) and its clean-room division in Ireland (which provides apparel and services to micro-electronic, pharmaceutical, and med-tech companies).
“These divestitures allow us to place even greater focus on our rental and direct-sale catalog operations, where we see the company’s greatest opportunity for future growth,” CEO Douglas Milroy said in a statement.
G&K Services said its latest two divestitures are part of a restructuring effort that the company began in 2009. It said that the two businesses it sold accounted for about $42 million in revenue and $500,000 in adjusted operating income in 2013. The divested businesses will be treated as discontinued operations in future financial reports, the company said.
Although G&K Services is eliminating its direct-sale program business, it will continue to operate its direct-sale catalog business, which provides ready-to-ship casual and work apparel, outerwear, safety gear, and other products.
G&K Services serves customers in numerous industries, including automotive, warehousing, distribution, transportation, energy, manufacturing, food processing, pharmaceutical, semi-conductor, retail, security, airline, and hospitality. The company employs approximately 7,800 worldwide and operates roughly 165 facilities in the United States. It reported $907.7 million for the fiscal year that ended June 29—a 4.4 percent increase from the prior year.
Last year, Milroy was named a 2013 Ernst & Young “Entrepreneur of the Year” awards finalist. Click here to learn more.