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Toy producer Empire of Carolina Inc. will outsource more of its molding needs offshore and reduce its reliance on the firm's large plastics plant in Tarboro, N.C.

The money-losing company also announced Jan. 16 that it hired investment bankers to ``evaluate strategic alternatives for enhancing shareholder value.''

Lawrence Geller, Empire secretary, said in a telephone interview that the alternatives include a possible sale of part or all of the Delray Beach, Fla., company.

Geller said production problems at Tarboro figure largely in the firm's financial woes, and Empire ``will reduce expectations of what we make there.'' Empire will source newly designed toys through its Hong Kong office so as not to put any new production burdens on Tarboro, he explained.

Empire began complaining about its Tarboro plant last summer. It said it experienced production problems because of delays in the installation and startup of equipment and because of a shutdown caused by Hurricane Bertha. The firm temporarily relied on outside molders to make some of its plastic parts.

Earlier in the summer Empire's senior vice president of manufacturing Robert Mistron was diagnosed with cancer and went on medical leave. Marvin Smoller, Empire's president and chief operating officer, assumed manufacturing responsibility for Tarboro until the firm hired a new plant manager in September. Mistron died last fall.

Howard Younger, Tarboro's relatively new plant manager, said that Tarboro has 33 injection presses, 30 blow molding machines, eight extrusion lines and 12 rotary vacuum forming lines in the 1.2 million-square-foot facility. Some of the machinery was newly installed but much of it was moved from former Buddy L plants in Gloversville and Mayfield, N.Y. Empire bought Buddy L in mid-1995 and moved its equipment to Tarboro last year. Tarboro already had some plastics processing equipment.

Tarboro makes Big Wheel ride-on toys, holiday and seasonal items, children's swimming pools, sleds and various other toys, according to Younger.

Empire's investment bankers will help it try to secure additional financing required in a recent senior loan agreement. It expects fourth-quarter results to be ``significantly below expectations,'' because of Tarboro's problems and because of a ``poor retail season in the toy industry.'' Empire had a loss of $16.7 million on sales of $106.1 million for nine months ended Sept. 30.

Empire also said Jan. 16 that Marvin Smollar will no longer be involved in day-to-day management of the company, but he will remain on the board of directors. Leonard Greenberg, a director, resigned effective Dec. 31. Empire hired RDR Group, a financial consulting firm in New York, to help it streamline its financial and operating structure and to assist in day-to-day operations.

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