Hightowers exit Thomaston posts

Marvin Lazaro, February 20, 2001

THOMASTON, GA — The resignation last week of three top executives capped off a period of tumultuous change for Thomaston Mills, Inc.

Neil Hightower, president and ceo, George Hightower, executive vp and president of the Apparel Fabrics Division, and Stewart Davis, executive vp and president of the Consumer Products Division, have all stepped down from their respective positions. The three are all members of the Hightower family, which has had a controlling interest in Thomaston Mills since its founding in the late 1800s.

The company accepted the resignations during a board of director's meeting on Feb. 15. The board has elected William Ott, the company's treasurer and cfo, as the acting president and ceo, and also instructed its audit committee to conduct a search for a turnaround management firm to "address the company's turnaround efforts and liquidity needs," the company stated in a news release.

According to Ott, the Hightower's stock position will not change and the family will retain its control of the voting shares. Both Hightowers and Davis will continue to serve with Thomaston as directors.

"I am thankful to Neil, George and Stewart for their longstanding loyalty and contributions to the company and look forward to their continued involvement as directors," said Ott.

"Thomaston is really a great company. It's got great people. We view [the resignation] as a positive move to make the company stronger," Neil Hightower told Home Textiles Today, about his decision to step down.

"In an environment of new challenges for domestic textile manufacturers, it is time for us to turn our attention to building our core competency as a low-cost provider of consumer products and apparel fabrics and expanding our customer base," Ott said. "We are energetically pursuing strategic initiatives designed to strengthen our sales and further lower our cost structure."

Ironically, Neil Hightower said "change" was the theme at Thomaston for 2000 and beyond in his last letter to company shareholders.

Some of the changes the company has undergone within the last year include getting out of the denim, sales yarn and industrial markets, reducing its work force from 2,300 to 1,600 and the combining or elimination of certain departments. These were all part of its mission to change from a diversified textile company to a consumer products and apparel fabrics company.

Net sales for Thomaston have decreased steadily since 1998, when they totaled more than $195 million, to $167 million for 2000. However, some of that has been generated by the sales of its denim and sales yarn businesses. The company cut its loss from continuing operations during its last fiscal year, which ended in July 2000, to $5.0 million from $7.8 million the previous year, and also cut its operating losses by 87.7 percent, to $716,000 from $5.8 million in 1999.

Although the company's losses from continuing operations at the close of its most recent full fiscal year were reduced dramatically from 1999, to $10.6 million in 2000 from $17.3 million, the numbers were still astronomically higher than its operating losses of just $216,000 in 1996.

Shareholders' equity per share of common stock has also bottomed out since 1996, falling by more than 71 percent from $16.68 per share to just $4.90 per share by the end of the most recent full fiscal year. By the time of last week's announcement, Thomaston's shares were trading at $0.20.

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