Jeff Hollander grabs lion's share of P'tex
February 26, 2001-- Home Textiles Today,
BOCA RATON, FL -In a novel situation that smacks of David running down Goliath, Jeff Hollander, president of Hollander Home Fashions, has become the largest single shareholder of bankrupt Pillowtex Corp., buying 81,441 shares of preferred convertible stock, a move that ultimately gives him about a 19.2 percent stake in the troubled textiles giant.
And the price? A bargain basement $10,000 for a pile of preferred stock that ultimately converts into 3.4 million shares of Pillowtex common stock, almost 20 percent of the company.
Hollander's holding puts him in the cat-bird seat, ahead of former chairman and ceo Chuck Hansen, with whom Hollander competed in the basic bedding business; and Mary Silverthorne, widow of the company's founder, John Silverthorne.
Hollander told Home Textiles Today he acquired the stock from private investor Jess Ravich, who in turn acquired the stock from corporate financier Leon Black, who picked up a major stake in Pillowtex when the company defaulted on its debt.
Hollander said that in the coming days he will submit a 13-D filing with the Securities and Exchange Commission detailing the transaction.
Hollander, who owns a 53 percent stake in Hollander Home Fashions, a company founded by his grandfather Phil Hollander, and built up by his father, Leo Hollander, pointed out the potential synergies between his own basic bedding business and that of Pillowtex Corp. "There's a lot that could be done. It's a fascinating situation. We would certainly contemplate the acquisition of some of their assets in pillows and pads."
Among his possible options, said Hollander: "I may seek a seat on the board of directors. And one of the things we could explore is some form of business combination. There's a lot that could be done. They have a lot of very attractive assets. So I would expect to explore the various ways in which we might benefit from this thing. It's something I'll investigate over the next few weeks."
Hollander Home Fashions, with sales last year of $211 million, is the nation's 11th largest supplier of home fashions products, according to the Home Textiles Today exclusive ranking of the industry's top 15 suppliers. It is the nation's third-largest supplier of sleep pillows, with sales last year of $98 million; the third-largest supplier of down comforters, with 2000 sales of $52 million; and the fifth-largest producer of mattress pads, with $11 million in sales last year.
The Pillowtex business that Hollander clearly eyes includes a number-one position in pillows, with $160 million in 2000 sales; a $70 million mattress pad business; a $145 million synthetic fill comforter business; and a $76 million down comforter business. Not to mention the sheets and towels.
Whatever Hollander's ultimate ambitions, they may be fleeting, said textiles analyst Bryan Hunt of First Union Securities, Charlotte, NC. "It looks good on paper, but in reality, the banks and bondholders own Pillowtex. So I don't know what it really gets him. It's tantalizing, but in reality the stock is worthless."
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