A 121-year-old company started in Chattanooga, long known for making fragrance and cosmetics test samples for magazines and advertising samplers, plans to lay off its production workforce and close its plant in the city.
But Arcade Beauty, which for many years was known as Arcade Marketing, will keep research and office jobs in Chattanooga.
The company, now headquartered in New York, plans to lay off 84 people and shut its Amnicola Highway plant by April 2024 and shift those operations to South Plainfield, New Jersey, according to the business.
The move comes as part of Arcade's efforts to streamline operations, achieve greater economies of scale, improve efficiency and ensure long-term sustainability in an increasingly competitive market, the company said in a statement.
"The plant closure will allow us to improve our asset utilization in North America and further reduce our fixed cost base," Trevor Deighton, Arcade's general manager for North America, said in the statement. "We will work closely with our customers to seamlessly transition our supply chain to other company sites in North America."
The company will keep about 40 employees in Chattanooga, said Steve Hiatt, the Chattanooga Area Chamber of Commerce's director of existing business development.
He said in an email that those jobs mostly are in research and development as well as human resources and accounting.
In Chattanooga, the Arcade Print Shop was opened in 1902, according to the company. In 1979, Arcade pioneered scent strip technology, and it continues to produce the popular samples that capture the essence of fragrances.
The company long operated at an East Main Street facility before settling into a renovated 122,000-square-foot factory on Amnicola Highway in 2010, according to news archives. At that time, Arcade employed about 240 people in Chattanooga.
In 2011, Arcade's then parent company purchased a 45,400-square-foot adjacent building on Amnicola where it planned to build office and laboratory space, archives show.
Carl Allain, Arcade's current president and CEO, said the decision to close the Chattanooga production plant was a direct result of continued declines in print media.
"The decision to close the plant was not made lightly," he said in a statement. "We remain committed to doing what is right, treating everyone with respect, and delivering on our commitments to our people, customers, shareholders and the communities where we operate."
The company said it is providing support and assistance to affected employees during the transition period, including severance packages, job placement services and retraining opportunities where applicable.
Arcade has a global footprint with 11 facilities servicing more than 400 beauty brands worldwide, according to the company. Arcade Beauty was formed in 2014 with the merger of Arcade Marketing and Bioplan, two prominent sample packaging businesses based in New York and Paris, respectively, the company said.
Last March, Arcade concluded a recapitalization with the support of its lenders and shareholders that it said then strengthened the company's financial foundation and positioned the business for success and growth.
As part of the recapitalization, the company extinguished a substantial amount of debt and received a new capital infusion. Arcade Beauty is now owned by a consortium of global investment firms, the company said.