Headquarters Staff May Be Trimmed, Wickes Memo Says

A Wickes Cos. internal memo disclosed Thursday that some of the 150 employees at its Santa Monica headquarters may lose their jobs after the first of the year when the firm is acquired by two New York investment companies. But it did not address the fate of workers at Wickes operating units.

Meanwhile, the buyers visited Wickes’ operations in Southern California and in San Jose to get acquainted with executives of various subsidiaries.

Wickes Chairman Sanford C. Sigoloff discussed the staff reductions in the interoffice memo distributed Thursday to employees at corporate headquarters. It came one day after the Wickes’ board accepted $538.9-million buyout offer from Blackstone Group, a New York investment firm, and Wasserstein, Perella & Co., a newly formed company that has become one of the hottest merger and takeover firms on Wall Street.

The four-paragraph memo, signed by Sigoloff, was issued in response to a report by the Wall Street Journal that “Wickes officials expect that most, if not all, officials and employees at corporate headquarters here will be dismissed.”

Sigoloff met privately Wednesday with James R. Birle, a partner in Blackstone and a former senior vice president of General Electric, and Robert B. McKeon, a managing director of Wasserstein Perella. The two will become co-chairmen when their newly formed WCI Holdings Corp. acquires Wickes.

“In a private meeting with me and again in a meeting with the senior corporate staff, Jim Birle and Bob McKeon stated that no decisions had yet been made regarding staffing levels at Santa Monica,” Sigoloff’s memo said. “They said that while there likely will be staff reductions, no reductions in force would be made before the first of next year--all commitments regarding employment agreements and policies will be honored.”

No other details were disclosed, and Sigoloff, who as previously disclosed will leave Wickes after a short transition period, was not available for comment. But a Wickes spokesman said the memo referred only to Wickes employees at the Santa Monica office. Wickes employs 60,000 people nationwide in three business segments: automotive and industrial products, wall coverings and decorative fabrics, and home improvement and furnishings.

Birle, reached by telephone late Thursday afternoon as he arrived at the San Jose executive offices of Orchard Supply Hardware, a Wickes subsidiary, said the memo was “accurate” and that the newspaper report was “just wrong.” He would not comment further on possible staff cutbacks, noting that “we just entered the agreement 24 hours ago.” He said a review of all operations is just beginning.

He spent most of the day in the Los Angeles area, meeting with executives of Wickes companies, including WCI Financial, Cole of California, Catalina and Builders Emporium, before flying to San Jose. “I’m making myself available to people at Wickes companies so they can see what Jim Birle looks like,” he said.

Birle added that Donald F. McCullough will rejoin Collins & Aikman, a New York-based textile firm, as chairman of a newly formed executive committee. He took early retirement as chairman and chief executive of Collins & Aikman after Wickes purchased it in 1986 for $1.16 billion. Birle, McKeon and top managers of Collins & Aikman will all be part of that committee.

Wickes management and analysts said problems at the unit are expected to cause an unexpected $40-million drop in the holding company’s operating earnings for the fiscal year that will end Jan. 31.

That decline prompted Sigoloff to abruptly cancel his own management-led buyout attempt two weeks ago.