Will Beacon of light turn to darkness?
March 18, 2002-- Home Textiles Today,
Only seven months after being acquired by a group of managers and a private investor, century-old Beacon Blankets closed its doors last Wednesday and sent its workers home, possibly forever, leaving top managers scrambling to find a white knight — a buyer or a deep-pockets investor with an appetite for risk.
Tedd Smith, Beacon president and industry veteran who engineered the buyout of the venerable producer from its former parent, Pillowtex Corp., last August, told Home Textiles Today, "We're doing everything we can to keep this thing going. We're working hard to get something done. We've got a couple of people kicking the tires now, and have every reason to believe that one of them will see the value of this company and keep it alive."
Trying to dispel some of the smoke and rumors that have swirled around Beacon in recent weeks, Smith emphasized, "We may be down, but we're not out yet. It ain't easy right now, partner, but we're still in there swinging."
Smith acknowledged that Beacon's two plants — in Swannanoa, NC, and Westminster, SC — had been closed last week but added that the Westminster manufacturing plant, which produces Beacon's cotton blankets, will partially re-open this week with a handful of workers for an undetermined period of time. "We have a skeleton staff coming into the Westminster plant for critical needs, and we'll be shipping from both locations. We're not dead yet, though a lot of people seem to think we are. We're doing everything we can to keep this thing going for the sake of all the workers here who rely on us for their livelihoods. Ultimately, that's what it's all about, all these people who've spent their lives with this company. Right now, everything we're doing, is about people, not product."
Beacon has come under crushing pressure almost since the day the deal was done last August, the victim of an over-ambitious business plan, an exceptionally high cost structure, sales that never took off as hoped for, a fragile American economy and a private investor whose enthusiasm quickly chilled.
The Beacon buyout from Pillowtex was cobbled together with financial backing from Asheville, NC, investor John Kuklenski, who has since withdrawn his support and now wants out, Smith confirmed. "We wouldn't be in this position if he hadn't pulled the plug and had stuck with it until June, when you start building inventory for the winter blanket season." Ever the optimist, Smith added, "If we can keep this thing going until then, we can probably pull it out and make it work."
With its financial lifeline severed, Beacon was forced last month to announce the eventual closing of its antiquated, million-square-foot, four-story Swannanoa manufacturing plant and the layoff of roughly 300 manufacturing workers and half the company's unusually large sales staff. Under the cost-savings move, all acrylic blanket production would cease and non-woven blanket production would continue for several months in Swannanoa, before ultimately being shifted to the Westminster plant.
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