Buffett strikes again; buys Fruit of the Loom
November 5, 2001-- Home Textiles Today,
Berkshire Hathaway Inc., the investment company owned by billionaire financier Warren Buffett, the "Oracle of Omaha," has cut a deal to acquire Fruit of the Loom Ltd., the bankrupt underwear and activewear producer, for about $385 million in cash.
Fruit of the Loom, once owned by maverick financier William Farley, filed for bankruptcy protection in December 1999, weighed down by a punishing debt load and stung by a drop-off in sales. Farley had earlier driven home fashions giant WestPoint Stevens into bankruptcy after an abortive hostile takeover and a failed attempt to create the world's largest public textiles company out of the marriage of WestPoint and Fruit of the Loom.
Driven out as WestPoint chairman and ceo, Farley was later squeezed out at Fruit of the Loom as well.
Recently, Fruit of the Loom has been backing into home fashions by licensing out its name, one of the most formidable brand franchises in the entire American apparel business. Haywin Textile Products Inc. has licensed the Fruit of the Loom name to produce a line of bedding.
The move virtually assures the continued existence of Fruit of the Loom under the steady hand of Buffett, one of the nation's most conservative, and successful, investors, who has a long history of buying under-valued companies at low prices, especially those with strong brand franchises, and nursing them to success.
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