Pluma ravels by not sticking to knitting.

Foreign competition has left most textile makers strapped -- financially, that is -- tighter than an overweight redneck in Wranglers. But despite logging quarter after disappointing quarter, the state's heavyweights such as Unifi Inc. and Burlington Industries Inc. have stayed afloat by moving jobs and axing unprofitable lines.

It's a different story for Pluma Inc., the Eden-based fleece and sportswear maker, which closed in September after 13 years in business. Not only bad conditions but bad decisions helped sink the once-plucky company.

Pluma went public in March 1997. It had a premium product for which it got a premium price -- custom apparel for big brands such as Nike. That December, it bought two wholesale distributors, Verona, Wisc.-based Stardust Inc. and Los Angeles-based Frank L. Robinson Co. "They went from high-value-added, high-margin down to where it's dog eat dog," notes Wachovia Securities Inc. analyst Kay Norwood. "The market is cutthroat, and prices are going down 20% a year."

The transition meant Pluma was competing with customers. Net income dropped from $2 million in '97 -- the company had been profitable since 1986 -- to a $36 million loss in '98. Its stock, which peaked at $15.75 in mid-'97 was trading at about $1 a share when the board removed CEO R. Duke Ferrell Jr. in February.

Pluma shut four of its seven plants and laid off hundreds of its 2,300 employees. In May it filed for Chapter 11 bankruptcy protection -- with $118.9 million of debt and $137 million in assets -- and hired John Wigodsky, formerly executive VP of a Delta Woodside Inc. division, as CEO. He completed closing Robinson and sold Stardust, getting only $10.5 million for the company Pluma bought for $33.5 million. "We were going back to the high end, focusing on our roots," he says.

He was six months too late, the syndicate of lenders led by Bank of America Corp. told him when they pulled the plug in June. "[The banks] were facing a situation where they could lose a lot of money ... and were unwilling to continue," he says. Management spent the rest of the summer trying to woo investors.

Wigodsky says the acquisitions were factors in a slew of circumstances that crushed Pluma, such as the April bankruptcy of a major customer and problems with a new computer system. Norwood suspects had it stuck with what it knew best, Pluma might have survived. "Hindsight is a wonderful thing."