Burlington sales down 16% in 3Q

Don Hogsett, July 27, 2001

Greensboro, NC — Stung by a widespread consumer slowdown and the sale of its area rug business, third-quarter sales of interior furnishings dropped off by more than a fourth at Burlington Industries Inc., falling to $83.6 million from $116.1 million last year, a shortfall of $32.5 million.

And hobbled by retail bankruptcies and slowdowns in its plants as it works down inventories, the home business recorded a loss of $5.1 million, reversing a year-before profit of $2.2 million.

Pulling about $13 million away from home sales in the quarter was the earlier sale of the tufted area rug business, said Charles Peters Jr., senior vp and cfo, in a conference call with investors. But even excluding the impact of the asset sale, third-quarter sales in the home still fell by 19 percent, he said.

Scoping out specific business segments, Peters said Burlington's core window business continued to get a boost from Martha Stewart, increasing the company's presence at Kmart and offsetting sales lost in the collapse of Wards. The bedding business continues to improve, said Peters, but is expected to remain "soft" until consumer spending improves.

With weakness in apparel acting as a further drag, overall sales tumbled by 16.4 percent, to $351.1 million from $419.8 million last year, a decline of almost $69 million. Slowing down its plants to work off excess inventories and putting heavy pressure on margins, Burlington posted a modest third-quarter profit of $1.5 million, virtually flat with last year.

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