G.E. pulls the plug on Spartan biz

Don Hogsett, May 7, 2001

SPARTANBURG, SC — In a second straight jolting blow in just two weeks to an already battered textiles industry, Spartan International, a 111-year-old textiles producer has shut down operations, the victim of a U.S. economic downturn, the steady flow of imports and an increasingly demanding financial backer, G.E. Capital Corp., which finally pulled the plug.

Just one week earlier, Thomaston Mills, another century-old producer, put itself on the auction block by hiring a business broker to find a buyer for the company or sell it off in pieces.

The end for Spartan came with a stunning swiftness when financial backer G.E. Capital Corp., which only months ago shut down ailing retailer Montgomery Ward, seized the company's assets last Thursday, putting 1,200 workers in three states out of a job.

In 1999, G. E. Capital Corp had lent the struggling textiles supplier $40 million, and when the company recently went into default, G.E. Capital wasted no time in shutting down a company with $200 million in annual sales and a work force of more than 1,200.

It was a particularly bitter blow for home fashions veteran Barry Leonard, who joined Spartan as president in 1999 after a long career at Springs Industries. Now, only three weeks after being promoted to ceo, Leonard had to deliver a speech at company headquarters last Thursday afternoon telling workers that as of 8 a.m. the following morning they would be without a job.

"It was the hardest thing I have ever had to do in my life," Leonard told Home Textiles Today. "I had worked like crazy to dig this company out of the hole, and now I had to tell everyone that the whole thing is going away. I promise you, that's a speech you never want to have to give."

In his brief tenure at Spartan, Leonard worked tirelessly to re-engineer and refocus Spartan, trying to shore up a company whose greige goods business had virtually disappeared, and whose finishing and printing operations had been bludgeoned by the double-whammy of imports and a retail and manufacturing slowdown.

Perhaps in recognition of the new global environment in which Spartan suddenly found itself, the company changed its name last year to Spartan International, as if trying to rejuvenate the image of an aging, smoke-stack survivor.

Acting rapidly to augment Spartan's struggling core operations, Leonard created a new home fashions bath business, marketing storage items, bath rugs, shower curtains and towels, which had grown from ground zero to roughly $12 million in sales in little more than 18 months, supported by programs at Kohl's and at Sears.

Trying to stay alive in a newly hostile and threatening textiles environment, Spartan had shuttered plants and laid off thousands of workers over the past several years. The Spartan work force had dwindled over the past decade from roughly 5,500 in 1988 to less than a fourth of that, just 1,200, by last Thursday, when the plug was pulled. In the intervening years, the company had undergone a wrenching process of dislocation and change, closing one plant after another — Whitney Yarn in 1996; Startex Finishing a year later; the sale of Spartan Technologies in 1997; and the closing of Startex Mill in 1998.

And that was just the beginning. In a continuing, gradual dismemberment, Spartan later closed the Beaumont Mill in Spartanburg and the Montgomery plant in Chesnee in 1999, and laid off another 165 workers at the Spartan Plant. Most recently, last December, Spartan shut its Cherokee Finishing unit in Gaffney, SC.

And as tough as it is for Spartan, it's just as tough for its customers, the many home fashions companies that used Spartan as a contract supplier for printing, dyeing and finishing, and find themselves very far out on a very short limb.

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