Timex group to move call center operations in the Philippines, they will close the North Little Rock distribution center by the end of 2017, the company said Wednesday.
The closure marks the end of seven decades of the Middlebury, Conn., company’s presence in Arkansas. The decision fits within the context of a watch industry struggling to stay profitable in an era of cheaper, outsourced production and the growth of smart watches.
Sixty-four employees at the location handle the distribution, customer-call center and repair and service operations for the entire U.S. and Canada markets, the company said. The distribution, repair and service operations will be taken over by a third-party logistics company in Indianapolis, and the call center will shift to Timex’s existing facility in Cebu, Philippines.
A spokesman for Timex, Patricia Rappaport, said the decision took “about a year of careful discussion and consideration” and was ultimately a “business decision which allows us to better control costs in a dynamic marketplace.”
North Little Rock Mayor Joe Smith said in a statement, “Timex has been part of North Little Rock for many years, and we had hoped that it would continue to be part of the fabric of our community for many more, but our economy often brings changes beyond our control.”
John Owens, president and CEO of the North Little Rock Chamber of Commerce, said the closure is a “sign of the times.”
“Outsourcing distribution to third-party companies who do distribution for multiple companies is much more efficient. You are seeing it in many other industries,” Owens said.
Ariel Adams, founder and editor of A Blog to Watch, an online publication focused on the watch industry, said Timex didn’t reshape itself to meet current trends.
“They just failed to adapt in a market that was looking for style and substance and not cheap, efficient time-telling.”
Rob Bates, news director for JCK, a leading jewelry trade publication based in New York, said the lower segment of the watch market that Timex operates in has faced challenges for several reasons.
“There is weak demand overseas, a weaker economy here and tough competition from smart watches on the lower end of the market,” he said.
Timex is a private company and would not release an approximation of annual revenue but said it employs over 4,000 people worldwide.
Timex opened its first Arkansas manufacturing plant in Little Rock in 1945. At its peak in the early 1970s, the company was one of the state’s largest employers, with about 5,000 employees between three locations in Little Rock and one in Hot Springs. In 1975 Timex lost a contract to manufacture Polaroid cameras and laid off more than 2,000 people.
The company’s Arkansas and American presence has been shrinking ever since.
The final Little Rock factory, which closed in 2001, was the last major watchmaking factory in the United States. At the time, the facility handled about 80 percent of Timex’s annual production of watchcases and shipped the parts to the Philippines for assembly. Now it purchases its watch parts from outside vendors, and assembly has continued in the Philippines.
In 2000 the company closed its Shelton, Conn., distribution center and moved those operations to North Little Rock. From its opening in 2001, the Arkansas distribution facility had 250 employees at its peak.
Staffing has steadily decreased since, said Owens of the Chamber of Commerce. Owens said he has been told by a manager that the company plans to keep the call center employees on staff until April and the distribution operations staff on until June. A company news release said it will cease operations by the end of year.
“They’re obviously a big, important part of their business community and a part of our city,” Owens said. He said his team is being “proactive” and working to organize a job fair in the coming weeks for the Timex employees.
“We’re going to try to pull something together for them so they can start understanding what their options are,” he said.
Owens said he has reached out to the city’s largest employers for this event, including Caterpillar Inc. and Ben E. Keith Foods.
In the release the company also said it would provide “outplacement services” and “career-counseling support” to its employees.
“We are hopeful that Arkansas’ current low unemployment rate will benefit these skilled workers in their search for new employment,” Smith said.
While Owens reiterated that this is a “sign of the times,” he concluded, “it’s just unfortunate to see it happen here where we need the jobs for our community.”