Glenoit sales boosted by home fashion buys
November 27, 2000,
NEW YORK -Glenoit Corp., working its way through Chapter 11 as it revamps its operations and beefs up its home fashions business, said in a federal filing that it expects to post a third-quarter pre-tax loss of about $6 million, compared to a year-ago deficit of $14.4 million, when the company rang up more than $13 million in one-time restructuring charges.
As its big apparel fabrics business has floundered, swamped by a wave of low-cost foreign imports, Glenoit has been overhauling its sprawling operations, downsizing the apparel business and beefing up its rapidly growing home segment, first with the acquisition of American Pacific Enterprises in Oct. 1998, and later Ex-Cell Home Fashions in Feb. 1999.
Driven by the buyout strategy engineered by president Thomas O'Gorman, Glenoit's home fashions business had grown to $56.4 million during the second quarter, accounting for almost 70 percent of total company sales of $81.3 million. Underlining the importance of the now crucial home fashions business, sales there grew by 15 percent during the second quarter, while apparel sales continued to erode, declining by more than 21 percent.
Glenoit included its forecast for sales and earnings in a Securities and Exchange Commission filing, saying it will be late delivering its third-quarter results due to "ongoing negotiations" regarding its existing credit facilities and senior subordinated notes.
According to the company, since filing a pre-packaged bankruptcy filing on Aug. 8, "These activities have demanded substantial management time and attention and directly impact the disclosure in the company's quarterly report."