CMI greige biz fades to black
June 11, 2001-- Home Textiles Today,
COLUMBIA, SC — After closing its greige goods factory in Clinton, SC, less than a month ago, the only link CMI Industries had remaining to the home textiles industry was its Clarkesville, GA, plant, which specialized in weaving filament warp fabrics for sheer window curtains as well for other applications.
Now, that too is gone.
CMI, based here, announced that it had entered into a non-binding letter of intent to sell substantially all of the assets of the Clarkesville facility to a management group that will include former and current CMI executives.
The sale will close the book on CMI's greige fabrics division which Joe Gorga, ceo, previously told Home Textiles Today had been unprofitable since 1998, due to the Asian crisis and the subsequent decreased costs of importing goods from overseas. Profits from the sale will go towards expediting CMI's efforts to grow its elastics business.
Joshua Hamilton, former president of CMI's greige fabrics division, and Ronald Luzzi, executive vp, marketing of CMI's greige division, are part of the management group that is buying the plant. Providing the group with its services is The Capital Corporation, an investment banking firm based in Spartanburg, SC. Alan Austin, principal with The Capital Group, said the management group hopes to have the sale finalized by July.
Gorga pointed out that the management buyout of the plant was the best way to assure the continued operation of what had been a successful business and that CMI supported the purchase.
"This management team is the same team that has been successfully running this business for CMI," Gorga said. "They know this business and are, therefore, the group best equipped to run the Clarkesville specialty fabrics business for the future benefit of their customers, employees and the future owners."
Luzzi said the unique nature of the fabrics produced by the plant and the high level of new product development associated with the business led to the decision to operate Clarkesville as part of a stand-alone business.
"We work very closely with our customers to develop new styles and products to meet their specific needs and the needs of their customers," said Luzzi. "Under this new ownership structure we will continue to be customer focused and should be able to respond even more quickly to our customers' requirements."
Three of CMI's plants are already scheduled to be closed. The company is currently fighting an attempt by holders of the company's Senior Subordinated Notes to declare involuntary Chapter 11. Chancellor/Triton, Mt. Washington and Atlantic Global are owed almost $12 million by CMI. The three companies had filed the petition with U.S. Bankruptcy Court, District of Delaware in early May, but CMI is seeking its dismissal.
Related Content By Author
Industry Related Content
More From the NY Market: It's All About Product!