DECOTECH: A NEW NAME AND PATH FOR MARION FABRICS

Byline: Michael McNamara

NEW YORK--The new owners of Decotech LC are determined to turn a loser into a winner.
Decotech, the former unprofitable Marion Fabrics gray goods unit of Texfi Industries, is setting a strategy that its executives think can allow it to hit $50 million in sales this year.
And, even more importantly, get it back in the black.
The agenda includes:
Continuing to beef up its line of fancy novelty fabrics, and staying away from basic commodity textiles.
Starting up a yarn sales business.
Marketing its own fabrics in-house.
Decotech, as reported, came about when a team led by former Texfi chairman, L. Terrell Sovey Jr., last month bought Marion, based in Marion, N.C., from Texfi for about $10.7 million.
In addition to Sovey, who serves as Decotech's chairman, president and chief executive officer, the management team is Daniel Sixsmith, executive vice president of sales and marketing, and Norman Guthrie, executive vice president of manufacturing. All executives, as well as several outside investors, have a stake in the company. Texfi had had Marion on the block since 1993, and the new owners acquired it when an earlier proposal fell through.
In July, Forstmann & Co. had signed a letter of intent to acquire Marion for an estimated $14 million to $15 million. However, in September, citing "difficult conditions in the equity market," Forstmann called off the deal, having planned to sell stock for financing.
So, having acquired a company that had losses of roughly $1 million on sales of about $38.9 million in 1994, the three executives are out to rally the firm.
"Marion had been up and down," said Sixsmith, interviewed last week at Decotech's sales and marketing offices here, the same site Marion had occupied. "It had some good years, and it had some years where it lost money. The thrust of the business had been in commodity apparel fabrics. And if you're not a huge, major mill, you shouldn't be doing those things."
Sixsmith said Decotech will be producing more fancy, yarn-dyed, high-twist and multiple blend fabrics, including blends of polyester and rayon, rayon and linen and cotton and linen, "things that are less import-sensitive and things we can get paid good prices on."
"Still, with fiber prices going through the roof, it is getting harder to pass those costs on in both apparel and home furnishings," Sixsmith said, adding that Decotech should generate about 60 percent of its sales from apparel fabrics and 40 percent from home furnishings products.
Sixsmith, 32, who joined Marion in December 1993, following an eight-year career at Milliken & Co., said many of the problems Marion experienced had to do with shifting from a commodity mill to production of fancy, novelty products two years ago.
"There were shorter runs, which led to scheduling difficulties, and the people we had, while they were great people, weren't used to dealing with those things," Sixsmith said. "In any operation you're going to have growing pains," he said, "and we feel we are turning the corner and coming out of it."
Another area where Sixsmith feels Marion can gain is through selling yarn. Since the company has a spinning operation at its plant, "it's a natural for us to get into."
Traditionally, the spinning facility had serviced Marion's weaving operations, but once Decotech staffs it and sets up the infrastructure, Sixsmith said it can be a "source of profit and several million dollars worth of sales volume."
Another transformation is that Decotech has brought in a national sales manager, Marvin Robinson, the longtime head of the Buffalo Division of United Merchants and Manufacturing. The company's fabrics had been marketed by Hathaway Fabrics, an agent here.
"We've also added representation on the West Coast," Sixsmith said. "It's tough to service it from New York."
Polatorres Associates, Los Angeles, is handling Decotech's western sales.
Jane Laug, director of styling, is also getting more involved in merchandising.
In addition, Decotech has cut its employee force by about 10 percent, and now it totals about 600.
"For the type of volume we were doing, I felt we were a little heavy in the overhead department," Sixsmith said. "That's a key for profitability.
"We also plan on investing money in plant and equipment, and will upgrade as we move forward," Sixsmith added. "But we have to come out of the shoot and get the profit picture in order first."

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