L.A. Gear Plans Store Closures, Layoffs in Bid to Slash Costs : Apparel: Athletic-shoe maker will cut 160 jobs. Firm’s restructuring also includes hiring former Nike executive.

L.A. Gear Inc., the once high-flying athletic-shoe maker that has fallen on hard times, said Thursday it is laying off about 30% of its U.S. work force and that it expects to close some or all of its seven retail stores.

In all, the Santa Monica-based company said it is eliminating about 160 jobs, most of them at its headquarters and an Ontario distribution facility. The company will also eliminate some positions in its sales force.

L.A. Gear, which lost $22.2 million last year, described the move as a bid to cut costs by $25 million and return to profitability. The company said it will take a one-time restructuring charge of $3 million to $5 million at the close of its fiscal year, which ends Nov. 30.

The move also marks a retreat from L.A. Gear’s 1993 expansion into factory-outlet retailing. The company opened three California stores and four in Texas, Arizona and Florida. It will decide by Nov. 30 whether to close some or all of its the stores.

Some store closings are likely because several of the outlets are poor performers, company executives said. Its California stores are in Oxnard, Lancaster and Gilroy. Factory outlet malls are generally “overstored,” a spokeswoman said.

The same problem was cited Thursday by Phillips-Van Heusen Corp. in announcing the closure of about 200 outlet stores and three plants in a restructuring.

L.A. Gear, the nation’s fastest-growing athletic shoe company in the 1980s, began to slide in 1990 because of marketing gaffes and a poor performance by its apparel division.

After failing to make gains on rivals Nike and Reebok in the men’s shoe market, L.A. Gear last year announced that it would focus on its more successful women’s and children’s lines of shoes.

But sales have continued to tumble. Revenues in the six months ended May 30 dropped by 37% and the company posted a loss of $17.6 million. And in July, L.A. Gear said one of its key customers, Wal-Mart Stores Inc., slashed its 1995 orders to $50 million from $80 million.

In a bid to boost sales, L.A. Gear also announced the hiring of Jim Moodhe as senior vice president of design, development and marketing. Moodhe, a former Nike employee, was most recently president of Guess Athletic.

Initially, Moodhe’s main job will be to reduce the time it takes to produce a new shoe style, said L.A. Gear President William L. Benford. The company aims to reduce the average production cycle from 12 months to 10 months.

“Our goal is to get the whole company closer and more responsive to customer,” Benford said. “We view this as a positive move to get the company focused on the task ahead.”

Wall Street responded favorably to the announcements Thursday. L.A. Gear stock jumped 25 cents a share before falling back to close at $2.75, up 12.5 cents on the New York Stock Exchange.

“Everyone is shortening their [production] cycle time,” said Jay Meltzer, director of the New York-based Johnson Redbook, which conducts research on the apparel and shoe industries. “It will put L.A. Gear in a better position, but it doesn’t ensure success because the competition is making similar moves.”

L.A. Gear ranked fourth in sales behind No. 1 Nike, No. 2 Reebok and No. 3 Adidas in 1994, according to Sportstyle magazine.