A STITCH IN TIME...
OK, Wilbur, you've got Burlington and Cone Mills now. Whatever in the world are you going to do now?Somewhere around the time you are reading this, financier and all-around takeover guy Wilbur Ross will officially get the keys to the front door of these two textilian trouble spots. Each will emerge from Chapter 11 bankruptcy in different form than when they went in: Burlington being drastically different, Cone less so.
Ross has indicated he will probably roll these two companies -- perhaps the most well-known names in textiles manufacturing and the cornerstones of the industry in the Carolinas -- into a combined business and operate them as one unit, thereby achieving some cost savings, making the deals pay off.
Like countless other textiles industry outsiders -- from David Murdock in the 1980s, who took over Cannon Mills, to David Stockman, who is now a significant owner of privately held Springs Industries -- Ross sees potential in the American textiles industry that warrants his aggressive posturing.
All one can ask is this: What in the world is he thinking?
The textiles industry in this country has become the equivalent of the DMZ, a no-man's land where no one with any smarts dares go and hardly anybody gets out alive. The industry has a long and distinguished history of attracting outsiders who think they see something that's not really there and then proceed to find out how true that really is once they get on the inside.
Look at Stockman, the former Reagan financial whiz kid best known for being the sage of trickle-down economics. Through his Heartland investment company, he has taken a controlling interest in Collins & Aikman, once a diversified textiles company but now focused on automotive interiors, namely the seats and carpets and such that go into vehicles. It's been a long hard road for Stockman since he took over C&A and a couple of CEOs later, Stockman is now running the joint himself, but is seemingly at the mercy of a Detroit establishment that never met a price increase it liked.
Not content with just one textiles company, Stockman turned around and helped take Springs private a few years back. While the founding family, led by Crandall Bowles, still has the biggest chunk of the company, Stockman is in there, lock, stock and dobby.
While no one on the outside has access to their numbers anymore, the past two years have not been kind to textiles manufacturers -- witness WestPoint Stevens in bankruptcy and Pillowtex in heaven (then again maybe it ended up somewhere south of there).
But Springs' plan to double the size of the company and cash out is halfway through its timetable and the top line at least isn't there, never mind the bottom line. It's difficult to believe this story will have the kind of ending envisioned when it all started.
Many people are equally as skeptical about Ross' plans for Burlington and Cone. Each still derives a fair share of its business from the apparel side of the textiles equation and nobody has made that model work in a long time. The one notable exception is Milliken, which seems to operate on a separate plane all its own, while answering to a higher authority: Roger Milliken.
That all of these outsiders keep giving textiles a shot is just incredible. You could say it's so funny it keeps us all in stitches, but you know I would never say something like that.
Letters to the editor can be sent via e-mail to warren.shoulberg@fairchildpub.com or via mail to HFN, 7 West 34th Street New York, NY 10001
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| Title Annotation: | financier Wilbur Ross and acquisitions Burlington Industries and Cone Mills |
|---|---|
| Author: | Shoulberg, Warren |
| Publication: | HFN The Weekly Newspaper for the Home Furnishing Network |
| Geographic Code: | 1USA |
| Date: | Nov 3, 2003 |
| Words: | 602 |
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