Atkins Reorganizing to Face Increasing Competition

Atkins Reorganizing to Face Increasing Competition

RONKONKOMA, N.Y.AtkinsNutritionals Inc. is reorganizing to deal with heightened competition in the lowcarb industry. The company said it will take certain measures to bring someclarity to the recent proliferation of low carb products. One of the changesincludes deemphasizing the companys Long Island distribution facility infavor of increased distribution from its two new facilities located in Atlantaand Denver. Another change is the reduction of its workforce, a difficultdecision the company said [will provide] far greater operationalflexibility in a demanding marketplace.

The company also reported it has retained turnaroundspecialist AlixPartners to provide additional expertise in the financial andsupply chain management areas.

There has been a huge explosion of low carb products frommanufacturers of every conceivable size, said Atkins spokesman RichardRothstein in a Reuters piece. We are dealing with a very differentmarketplace than existed a year ago.

The companys announcement follows a May lawsuit by a manwho attributed his heart disease to the Atkins diet and the release of a Danishstudy that challenged the idea that low carb diets are more effective than otherdiets in helping people lose weight. The declaration was also made in the wakeof a medical report that disclosed Robert Atkins, M.D., founder of the diet, mayhave had a heart condition when he died last year.

Atkins has made remedial adjustments to its image followingthe negative publicity. According to Reuters, analysts have speculatedinvestment banking firm Goldman Sachs and private equity firm Parthenon Capitalmay ask the company to make additional changes in preparation for an initialpublic offering of stock.