Burlington and Cone gel to form ITG
March 22, 2004-- Home Textiles Today,
International Textile Group (ITG) has been formed by the combination of Burlington Industries with the acquisition this month of Cone Mills by Wilbur L. Ross. The combined companies have revenues of $900 million.
At the same time, Ross announced that Burlington House, Cone Jacquards and Carlisle, the finishing and dyeing subsidiary of Cone, will be merged into ITG's newly formed Home Furnishings Business.
Ross said the company is searching both internally and externally for a president to run the newly formed home furnishings group.
On the corporate level, Joseph Gorga, who had been president and CEO of Burlington, was named president and CEO of ITG. Ross is chairman of ITG. Gary Smith, formerly Cone's executive vice president and chief financial officer, was named chief financial officer of ITG. John Bakane remains CEO of Cone Mills Denim.
ITG also is the majority owner of Nanotex, which operates the specialty chemical business.
The various divisions will operate from a single headquarters in Greensboro, N.C., "if local authorities provide the requested incentives," Ross said. Currently, the Burlington and Cone units are separate and are occupied under short-term leases.
In a conference call last week, Ross outlined his overall objectives for the company: upgrading the technical and design capabilities of the divisions; increasing the branding awareness of the Burlington and Cone names; lowering production costs and developing a strategy to survive and grow.
For the Home Furnishings Business, Ross sees opportunities in vertical integration. "There are six layers of overhead, our goal is two."
Each of the units in the merged Home Furnishings Bus-iness have specific strengths in jacquards, Ross related, and there are product synergies. Burlington's strength is in windows, top of the bed, contract and mattress fabrics. Cone's strength is in residential upholstery fabrics with looms that go up to 130-inches wide as well as a differentiator — the ability to create repeats as large as a king-sized bed.
At Burlington, said Gorga, "There is a big investment and commitment for the contract business. And we're getting there with a lot of product" to comply with the flammability regs. "We're in a position to invest in people and technology." As for Cone, Gorga added that its strength is in the "high-end, small lots with fashion work in colors and constructions."
As for Carlisle, the division is working on innovative finishes and new dye stuffs, Bakane said. Coming up, he added, is an emphasis on digital printing "on the front end of fabric production."
Discussing the global textiles situation, Ross said, "I hope Bush will look for a temporary respite for textiles as happened for steel. The textile industry is not remotely ready for the lifting of quotas altogether."
Ross also pushed for "a NAFTA-friendly Central American agreement." He is personally visiting China "to talk about what opportunities there are that make some sense and are consistent with our overall objectives."
Ross sees ITG as hitting the billion-dollar mark in revenues soon. Capital, he said, is available for the business and, "We will promote technology throughout our lines." The combined companies today, he pointed out, have debt of $75 million, compared with the $1.5 billion total for the two companies when each filed for bankruptcy.
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