None of your business
April 26, 2004,
During lunch last week with some folks from one of the industry's many "quiet" companies, the talk turned to the current state of the mills.
It wasn't the first time I'd heard that sentiment, which raises the question of whether there's anything to be gained these days in the home textiles world by being a public company.
Then you look around and realize maybe the market is answering that question itself.
Most obviously, there are the current bankruptcies of WestPoint Stevens and Dan River, two of only three domestic traditional mill operations still standing. WestPoint, expecting at latest report to emerge sometime mid-year, has gone on the record stating it would prefer to come out as a private company. Dan River, whose reorganization has just gotten underway, might be better off following suit.
Mohawk Home is part of a public company, but one that doesn't break out the division's performance numbers. So it's afforded a measure of protection. Ditto Shaw Living, a division within a division of mighty Berkshire Hathaway. Corporately speaking, Shaw's home fashions division is a mere mote within a multi-billion operation, so its results are also buried under layers of conglomeration.
Even those that are doing relatively well in terms of performance (and among publicly held textiles companies, the concept of doing "well" is nothing but relative) have stock prices that are, shall we say, extremely affordable. As of last week, Quaker Fabrics was trading at under $9 per share, Wellman at less than $8, and Crown Crafts at 60 cents.
The most prominent non-public company, of course, is Springs Industries. Springs voted to switch to the private side of the street in 2001 before embarking on its acquisition and expansion tear. Since then, its sales have grown 33 percent, from $1.8 billion in 2001 to $2.4 billion last year. It's difficult to imagine Springs could have pulled it off if it had to flash its debt load to Wall Street along the way.
It's ironic, but Spring will probably be the company to answer the truly intriguing question about whether there's a future in the publicly held realm for home textiles companies. When it went private, Springs had in mind a five-year endgame under which it would double sales and return public. That was also the exit strategy for the controlling Close family and financier David Stockman.
That scenario may ultimately play out, but it would be surprising if it happened any time in the near future.
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