DULUTH, Minn. - ARI Network Services is planning to move to a new, bigger downtown location here, but 20 former 50 Below employees won’t be making the move.
The owner of 50 Below recently laid off the 20 employees that had duplicate functions after ARI bought 50 Below for $5 million last year. ARI hired 133 of the website and e-commerce company’s nearly 160 retail division workers, including all the managers. The retail division included 50 Below’s powersports accounts. ARI moved its own powersports staff to Duluth, which boosted the Duluth staff. The layoffs reduced the Duluth staff to 121, CEO Roy Olivier said.
“Basically, we periodically review the cost structure and revenues,” Olivier told the Duluth News-Tribune. “We felt we needed more efficiency to get the cost structure in line with our revenues.”
Milwaukee-based ARI was one of two companies that purchased the assets of bankrupt 50 Below in 2012. Both buyers promised to keep most of 50 Below’s 225 jobs in Duluth. ARI retained the 50 Below trademark when it acquired the retail division.
When ARI bought 50 Below’s assets out of bankruptcy, 50 Below was doing $8.9 million in revenue with 130 employees, while ARI had $29 million in revenue with the same size staff, Olivier said.
Most of the 20 jobs cut are in operations and publishing. The layoffs come as ARI prepares to consolidate its Duluth staff — currently in two locations — into one larger office. The 25,000 sq. ft. buildout, reportedly a "state-of-the-art office space," cost the company $450,000 and is nearing completion.
Olivier said the company’s 50 Below division will do $10.5 million this year. As it grows, they will add staff in Duluth, he said.
Posted by Holly Wagner