The sum of Thomaston's parts...
December 10, 2001-- Home Textiles Today,
After trying for several months to be sold as a whole entity, Thomaston Mills has begun to sell to sell off its assets individually, recently unloading a warehouse and manufacturing facility as well as a Finishing Division plant.
Thomaston voluntarily filed for Chapter 11 protection in June, listing as its main creditor Foothill Capital Corp. for "real estate Accounts and all other assets" for the amount of $27.9 million. The company had maintained hopes a buyer could be found that would be willing to purchase it as a whole and keep the Thomaston name on the rapidly shrinking roll call of home textiles manufacturers. It was not to be, however, and the piecemeal sale of properties has begun in earnest.
According to Bill Ott, acting president and ceo of Thomaston, the company realized in August that it would have to sell off its assets piece by piece.
"The people side of this is really very important," Ott said. "Our people have acted with a high degree of professionalism and grace and they have completed the task that was asked of them."
1888 Mills and Standard Textile Co. have both stepped up to purchase two of the company's facilities.
The purchaser of the 522,000-square-foot Finishing Division plant is the Griffin, GA-based 1888 Mills, a towel manufacturer that recently inked a manufacturing and importing joint venture with bath towel and kitchen textile manufacturer/importer ESN Inc. 1888 will pay approximately $240,000, subject to bank approval, for the building that it hopes to begin cleanup on by Jan. 1 and occupy by early May. According to Doug Tingle, ceo, the purchase represents an excellent opportunity to help 1888 in its growth plans.
"This was a good opportunity to expand. It was just an attractive purchase for us and within our budget," he said, adding that 1888's final cost would be significantly higher than the purchase price since extensive clean-up operations had to be undertaken as well as the removal of some of the remaining equipment.
1888 plans on using the almost century-old building for warehousing and manufacturing. The company currently utilizes 115,000 square feet of manufacturing space, 55,000 square feet of printing space and 75,000 square feet of warehousing space, so the purchase more than effectively doubles the working size of the company. Approximately 120 employees will also be added to the company's roster of 284.
"A lot of those folks will be drawn from an already experienced pool of workers," Tingle said, citing the high numbers of skilled workers left jobless by the demise of Thomaston.
Also looking to tap into Thomaston's resources is Cincinnati-based Standard Textile. The manufacturer of health care, hospitality and institutional products, will purchase a 700,000-square-foot former Thomaston warehouse and manufacturing facility as well as capital investments for approximately $5 million and begin operations by February 2002. Standard declined comment, citing the lack of bank approval of any proposed sale.
In addition, in October ATD-American, a wholesale furniture manufacturer, purchased a sewing plant and the Thomaston trademark for North America. According to Ott, ATD plans on rebuilding Thomaston's name in the institutional sheet market.
Negotiations have also started with another, non-textile company for the purchase of the 322,000-square-foot Lakeside facility, its only remaining asset, where the company had manufactured comforters, top-of-bed and items for its bagged ensemble businesses.
Excluding the purchase of the Lakeside facility, up to 600 former Thomaston employees, from a pool of 1,400, may soon find themselves back to work, Ott said. The prospective purchaser of Lakeside is also looking at hiring 250 more with the possibility of hiring a total of 700 over a period of seven years.
"Initially, there was a sadness, but certainly there was a resolve; and with these announced sales people's outlooks are brighter," Ott said.
Thomaston's troubles began five years ago when it posted a profit of only $615,000. As the years passed, losses widened significantly, reaching $41.7 million in 1999. The new millennium brought no relief, as losses peaked at $14.6 million in 2000. The 2001 fiscal year remained a challenge, as the company soon reported losses of $3.6 million and $5.9 million for the first and second quarters, respectively.
The company's troubles continued as Neil Hightower, George Hightower and Stewart Davis, three of the company's top executives, all resigned days after the second quarter filing.
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