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Springs adds area rugs with Beaulieu purchase

Fort Mill, SC — Springs Industries late last week signed a letter of intent to acquire the nation's No. 3 area rug supplier, the Beaulieu Rugs division of Dalton, GA-based Beaulieu of America.

The purchase, which is expected to close in February and was completed for an undisclosed amount, includes Beaulieu Rugs' manufacturing and related assets in Dalton, GA, and in Stratford, Ontario.

The acquisition marks a major milestone for Springs, which through the purchase adds area rugs to its offerings for the first time. The Beaulieu Rugs division acquired by Springs manufactures woven area and accent rugs and tufted bath rugs. In 2001 Beaulieu reported $125 million in sales — a figure unchanged from 2000.

"Adding Beaulieu rugs will enable Springs to expand into a new product line and fits our strategy of offering fashionable products for every room in the home," said Crandall Bowles, chairman and ceo, Springs. "Beaulieu is known for its quality rugs, and we look forward to adding these products to our array of home fashions."

Another noteworthy aspect of the purchase is that it is Springs' first acquisition since private equity firm Heartland Industrial Partners — of which financier David Stockman is a lead partner — bought approximately 44 percent of the company last September.

Springs already produces its own line of accent and bath rugs under many of its brands, such as Wamsutta, as well as through its Regal Rugs brand division. Springs acquired Regal in January 1999 and last month relocated its main production facility from North Vernon, IN, to a new, state-of-the-art, 200,000-square-foot facility in Ellijay, GA. This is where Regal manufacturers and distributes domestically made and imported accent and bath rugs of assorted constructions — handgun, printed, tabletop handsewn rugs. The largest rug produced by Regal is 30' x 50'.

Beaulieu's rug division had been pursued by other major area rug manufacturers and suppliers for several weeks prior to Springs' final purchase last week.

For some shoppers, Beaulieu's most attractive asset was its store placement at home centers and some discounters. But many did note that one point to consider would be the need to spend money upgrading Beaulieu's plants and aging equipment.

The purchase by Springs has received federal antitrust clearance in the United States and is also subject to antitrust approval in Canada.

Springs Industries, which became privately held in September, operates facilities in 13 states and in Mexico and owns marketing and distribution subsidiaries in Canada and Mexico.

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