Taking stock at Dan River
May 17, 2004,
New York — Easing in gently, and trying hard not to make waves — or further ruffle the feathers of an already skittish workforce — turnaround specialist Woolard Harris is slowly settling in as chief restructuring officer at Dan River Inc.
Harris was recently charged with steering the troubled company through the shoals of Chapter 11 and helping to draft a new vision for its future.
Leaning forward in his chair and speaking in a lulling Southern drawl, Harris, a bankruptcy specialist at New York-based Carl Marks Co., explained, “It’s a complicated and complex process, and I’m at that first phase now, where I try to understand the company and get to know the team. Every organization has it own unique culture, and you’ve got to learn the ways people do things and why they do them the way they do.”
He also has to allay the fears of anxious workers and find ways to win over a management team that may be understandably suspicious of an outsider suddenly thrust into its midst and told to make changes. “The whole process now is to get everybody reading off the same page, like a team playbook,” said Harris. “And you’re not going to accomplish that by coming in and acting like you know everything there is to be known. You have to go gently. There are a lot of sensibilities you have to deal with.
“So the initial challenge is that everybody is nervous, nobody knows what to expect. So you’ve got to win over the people and get them focused on the task. And you’ve got to understand the business.”
That done, said Woolard, it’s on to Phase II, “and that’s when you work with the management team to start to lay out the plans. Because you don’t do anything by yourself, you do it with the team. They’re the ones who are going to be managing this company long after I’m gone. And you have to think long-term, not just how to get the company out of its current situation.”
And ultimately, he said, the process of working Dan River out of bankruptcy and developing a new vision of its future is made simpler “because you’ve got a team here that’s very operational-minded, very seasoned, and very responsive. That takes us a long way down the road.”
An incalculably valuable asset at Dan River, said Harris, is its chairman and CEO, Joseph Lanier Jr., who earlier turned WestPoint Stevens into an industry powerhouse, and later transformed Dan River from a stodgy, marginal player into a force to be reckoned with in the home fashions industry.
“Joe’s got a track record. He’s a very smart guy who built a very strong company, which had just a little more debt on its books than it needed. This is one of the most widely respected guys in the business. That makes this job of getting the company back on its feet a whole lot easier,” he said.
Woolard joined Dan River as chief restructuring officer, a title now in vogue and a job that relieves a company’s management team of much of the time-consuming, day-to-day tedium of dealing with the bankruptcy process and all its attendant minutiae. In this particular case, said Harris, “I’m functioning as chief restructuring officer for operations. So I’m focusing on just that one piece. I won’t be doing that whole balance-sheet thing. I’ll be working with management, helping to stimulate the thought process, so we can position the company for a long future and a strong future.”
Unencumbered by dealing with banks, bondholders, lawyers and the court, “I’ll be working with the management guys here to explore all the alternatives that the company may have to do business. You know, when you’re under a lot of financial pressure, the way these guys have been, you don’t have the luxury of doing a whole lot of strategic thinking. Now, we can start to bounce some ideas around. In the simplest terms, I’m sort of a change agent, helping a company’s management team go from its past to its future.”
If past is prologue, Dan River might expect to emerge from bankruptcy a more focused, flexible and formidable player, much in the way of Glenoit and Excell Home Fashions after Woolard earlier steered Glenoit successfully out of a bankruptcy. Glenoit’s problems were only compounded by the death of the company’s chief, the much beloved Tom O’Gorman, and a flood and fire that crippled some of the company’s plants.
“Glenoit was a difficult challenge,” said Harris. “You had several different companies going in several different directions. So we had to get the folks there calmed down and settled on what needed doing. We sold the fabric division, because that didn’t fit in with the company’s core competence. American Pacific was a good business, but a different type of business, so we sold that as well. That got us more focused on the two core businesses, Excell and Glenoit Consumer Products. We decided that was the core to reorganize around.
“And then Tom O’Gorman died, and we had a flood and a fire. But you know, the people really rallied around despite all those setbacks. Every one of these events just energized the people. It was a real case-book study of how to build a really good, successful company.”
Reflecting on the Glenoit experience and Woolard’s tenure there, Barry Leonard, Glenoit CEO, commented, “He’s really great at analyzing a situation and putting the pieces together. Woolard did a really good job evaluating the situation here and rationalizing the expense structure, but in such a way that even after the cost-cutting, the operation of the company was seamless.”
Asked what Dan River can expect of Harris, Leonard said, “They’ll find he’s a great listener, and in his job that’s probably the greatest characteristic of success. He’s there for only a short time, so he’s got to utilize the talents and skills of the team that’s already there, and that means he’s got to listen very closely. He’s a really great listener.”
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