Ralph, left holding bag, still supportive of WPS
June 16, 2003-- Home Textiles Today,
Even though Ralph Lauren Home was left holding the bag on the WestPoint Stevens bankruptcy, owed more than $3 million, the two companies are still tied together, with no change contemplated in the relationship.
One big surprise in the WestPoint bankruptcy was the conspicuous positioning of Ralph Lauren Home as the big mill's third-largest unsecured creditor, just behind Bank of New York.
"That's the royalties we owed them," explained Chip Fontenot, interim ceo at the major mill.
Even though bankruptcy allows both parties to review licensing agreements, and even though Lauren came up short in the bankruptcy filing, the marriage is still intact and and holding together, Fontenot told Home Textiles Today. "We will assume that license and at some point they will be taken care of. And they're standing by us."
Fontenot emphasized, "They think the restructuring is overdue and good for us."
Said Fontenot, "You know, the relationship is so intertwined. And they appreciate the relationship. They recognize why we're in bankruptcy, and they're being very supportive."
Did WestPoint contemplate using the bankruptcy as leverage to renegotiate the licensing fees and royalties downward? "We had that option, but we chose not to. It doesn't make good business sense. If it worked before, it still works now. We had the option, but we never even thought about it."
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