By  on January 18, 1994

NEW YORK -- The acquisition of Cone Mills' apparel corduroy business by Majestic Mills last month should be a good deal for both firms, according to executives from the two companies as well as industry analysts.

The move gets Cone out of apparel corduroy, a business it has been deemphasizing for the past two years, allowing it to put more muscle behind its core business in denim, along with its specialty fabric offerings.

At the same time, it provides an easy expansion route for Majestic, the largest U.S. converter of corduroy fabrics, when for the first time since the mid-Eighties, the domestic corduroy market is showing upbeat activity.

Majestic purchased the apparel corduroy segment of Cone's business Dec. 27, for an undisclosed amount.Under terms of the transaction, which was announced Dec. 27, Majestic got all of Cone's inventory of finished corduroy production, its forward commitments and all apparel corduroy bookings. The purchase price was not disclosed.

In addition, Majestic and Cone have entered into a partnership whereby Cone, acting as a contractor, will cut, dye and finish apparel corduroy exclusively for Majestic. The deal does not include real estate or machinery.

Plans call for no Cone employees to be displaced.

With the acquisition, Majestic is broadening its range of offerings in cotton corduroys. Additions include a 19-wale cord, which is aimed at the better children's and dress markets; a heavyweight wide wale for the outerwear market, and a 16-wale and an 8-wale for general apparel applications.

Fred Baumgarten, Majestic president, said that about 10 years ago corduroy fell out of fashion and became a commodity-type fabric."From what we are seeing, it's starting to come back into fashion," he said.

Various industry executives said corduroy used to be an alternative to denim. However, with the myriad looks and finishes developed in denim, corduroy went from being "the other choice to a forgotten fabric," said one executive requesting anonymity.

Now, however, said Baumgarten as well as others, corduroy is regaining fashion status, particularly in Europe, and the trend is starting to be felt here.

"With this deal, along with the general increase in the corduroy business, we expect about a 50 percent increase in our total business in 1994," said Baumgarten. "We wouldn't have made this deal if the signs didn't point to a resurgence in corduroy."

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