Springs to next level with Burlington buy
March 4, 2002,
Making good on its promise to rapidly build Springs Industries into a dominant force on the world textiles stage, the major mill has cut a deal to buy the window and bedding business of bankrupt Burlington Industries Inc. — including a license to use the venerable Burlington House name.
When Springs went private last September after receiving a massive cash infusion from investor David Stockman, it was with a clear mandate to virtually double the size of the largest producer of home fashions in the United States over the next three to five years.
Clearly on a fast track to achieve that ambitious goal, Springs has now announced its second acquisition in as many months, adding a combined total of more than $300 million in annual sales. Last month, Springs got off to a heady start, buying the nation's No. 3 area-rug supplier, the Beaulieu Rugs division of Beaulieu of America, with its $125 million in annual sales.
The latest Burlington move propels Springs into the top tier of American curtain and drapery producers, allowing it to leapfrog over mill rivals WestPoint Stevens and Pillowtex.
In addition to the Burlington House window business, Springs picks up a bedding business that last year generated about $60 million in sales. It also enters into an agreement for the supply of jacquard and decorative fabrics for some of Springs' home fashions lines.
The price and terms of the acquisition were not disclosed by either company.
"Strategically, the deal makes a lot of sense for Springs, since it helps them to round out their product line," said analyst Bryan Hunt of Wachovia Securities, Charlotte, NC. "Springs is trying to build out its business to be a one-stop shop, and this clearly goes a long way towards that end."
For cash-strapped Burlington, which entered Chapter 11 in November, the deal provides some much-needed liquidity and flexibility.