WestPoint to acquire Chatham
November 20, 2000,
ATLANTA -Extending its reach into woven blankets and at the same time shoring up its newly acquired Ralph Lauren license for the same product lines, WestPoint Stevens will purchase the Chatham Mfg. blanket operations of CMI Industries.
And now it has acquired the capacity to produce the woven cotton, acrylic and woolen blankets that form the heart of the Ralph Lauren blanket line that WestPoint takes over from Pillowtex Corp. next year.
Moreover, adding Chatham blanket and throw sales of $35 million to its own, WestPoint is now poised to take over as the nation's number-one blanket producer, with '00 sales that will likely exceed $140 million.
THE OTHER SIDE OF THE COIN
But in an intricate, 3-D spider's web of interlocking, and sometimes competing, relationships, the deal directly involves the interests of four of the nation's largest home textiles suppliers. In addition to WestPoint and Chatham, the deal has direct and considerable impact on major mill Springs Industries and blanket producer Charles D. Owen Mfg.
In this tangled web, Chatham is now producing a highly successful line of blankets under license from Springs; and Owen is marketing blankets under the WestPoint and Martex nameplates under a similar licensing agreement.
At this point, the only certainty about those two existing licensing agreements is that they won't last for long, and the deal is leaving behind a lot of bruised feelings in a public relations imbroglio.
"This whole thing has been very badly handled," said Charles Owen Jr., chairman of Owen Mfg. "Nobody has had the decency to call me directly, and WestPoint let us know about this thing only a half an hour before they sent it out in a press release. And then they had the gall to ask us to continue making non-woven blankets for their Disney product line because they can't get it made as cheap anyplace else."
So where does this leave Owen's licensing agreement with WestPoint? "We're cancelling it, of course, as soon as we work out what to do with the inventory. We're finished with them."
As successful as the WestPoint program has been for Owen in the two years it's had the license, it hardly leaves the company high and dry. "We're not worried about it," said Owen. "We've got something up our sleeve, and I'm hoping that by Nov. 28 we'll be able to announce a new relationship with a very powerful brand name."
And where does this leave Springs and its licensing agreement with Chatham? The company issued a terse statement saying, "Nothing has been decided about that license. We're looking at our options."
The former Chatham Mfg. Co., once controlled by the Chatham family, has been weaving blankets for more than a century in its Elkin, NC, plants, and later began producing upholstery fabrics and automotive upholstery. Bought out years ago by Clinton Mills, the blanket unit more recently functioned as the consumer products division of CMI Industries, the company newly formed following the acquisition.
But with CMI's large greige goods business battered by foreign competition, losing money and still deep in debt, CMI has been dismantling the former Chatham operation, selling it off piece by piece, culminating with the sale of the blanket business.
Chatham's blanket business had declined to as low as $14 million in recent years but gained considerable strength after the company joined forces with Springs. Largely through the strength of the Springs nameplates, the Chatham business has grown rapidly, with combined blanket and throw sales now at $35 million.
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