Cone Mills enlists JP Morgan
March 13, 2001-- Home Textiles Today,
GREENSBORO, NC — Dropping a strong hint that it's put itself up for sale — without actually having to say so — financially troubled Cone Mills, which hasn't made a nickel since 1994, said it has hired JP Morgan as a strategic advisor to "provide guidance on all aspects of its strategic plan and capital structure."
Weighed down by ongoing restructuring charges, century-old Cone, the world's largest producer of denim fabrics and the nation's largest commission printer of home fashions fabrics, posted a sharply widening loss of $29.0 million during the fourth quarter of last year — vs. a smaller loss of $5.7 million the year before. And the loss would have been even deeper but for a $14.9 million tax credit.
For all of last year, Cone recorded a loss of $25.3 million. Without the big tax break, the company produced a pre-tax loss of $41.8 million. That's a sixth straight year of losses for Cone, which has lost $66 million since 1995, and which last recorded a profit in 1994. In addition to last year's $25.3 million loss, Cone generated a $19.1 million deficit in 1999; a $6.7 million loss in 1998; a $9.4 million loss in 1997; a $2.2 million loss in 1996; and a $3.3 million loss in 1995.
In its core denim business, Cone has struggled in recent years with a worldwide glut of denim fabrics, sharp downward pricing pressure and wavering sales of jeans to U.S. consumers. At the same time, the company's home fashions business was battered by a downturn in print sales, as consumers increasingly favored heavily textured jacquard fabrics.
In a series of drastic actions over the past several years, trying to rebuild its business and regroup its operations, Cone has ousted its long-time ceo Pat Danahy, replacing him with chief financial officer John Bakane; and launched a sweeping restructuring, shutting down some operations and cutting more than a thousand jobs.