Springs Will Not Abandon U.S.
October 31, 2005,
Fort Mill, S.C. — The merger of Springs Industries with Brazilian manufacturer Coteminas will not spell the end of Springs’ U.S. manufacturing operation, the company’s CEO told employees recently.
The new entity, Springs Global, will be headquartered in Brazil after the merger closes later this year. The chiefs of both Springs and Coteminas — Crandall Bowles and Josue Christiano Gomes da Silva, respectively — will serve as co-CEOs of the new company.
“We’ve structured the organization to have a U.S. operating company and a Brazilian operating company,” Bowles said in a video message to employees.
Bowles noted that the mill had already moved most of its towel and bedding production to Coteminas, which has been Springs’ exclusive partner in Brazil for nearly five years. Although she did not rule out plant closings in the United States, Bowles said: “Right now, we have too much demand to close another plant here in the U.S., and I don’t foresee ever that we won’t need grey, finishing and fabrication capacity here in the U.S. for service and lead-time reasons.”
She added: “I want to assure you our U.S. operations will continue to be based in Fort Mill just as they have been, in the same offices my grandfather built in 1952.”
A portion of both companies’ businesses will not be folded into Springs Global. Springs recently spun off its hard window business as an independent firm. For the time being, Springs decorative rug business will also operate outside the Springs Global company, as will Coteminas’ denim and twill fabrics businesses.
Coteminas is Brazil’s largest textiles manufacturer and sells product throughout South America as well as in North America and Europe.
The company’s sales in 2004 were $583.6 million, up nearly 17 percent over 2003. Its return on sales — profits measured as percentage of sales — was 13.4 percent.
In addition, Coteminas recorded an average gross margin of 31.7 percent last year. Its operating costs totaled 9.7 percent of sales.
Bowles said Springs Global “will continue to rely on the same managers to run our U.S. operations and business units. Josue will have his management team. We will work together to blend the companies where this makes sense.”
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