GUILFORD EXITS BANKRUPTCY: Guilford Mills Inc., which filed for bankruptcy in March at the tail end of a slew of filings in the textile industry, on Friday became the first company of that wave to return to solvency. As spelled out in the company’s reorganization plan, the Greensboro, N.C.-based mill issued new stock and turned over 90 percent of ownership to its former creditors. Former shareholders got the remaining 10 percent. Since its filing, the company has largely pulled back from the apparel fabrics business — its sole apparel-related venture is a plant in Mexico. The company focuses on the automotive and industrial fabrics trades. It reduced its debt from $270 million to $145 million by reorganizing.
This story first appeared in the October 7, 2002 issue of WWD. Subscribe Today.
l DIAMONDS IN THE ROUGH: Tiffany & Co. plans to open its first diamond cutting and sorting plant in the rugged Canadian mining town of Yellowknife next year. The $3 million plant is designed to complement the company’s 15 percent minority investment in Toronto’s Aber Diamond Corp. — which will open the Diavik mine in Lac de Gras, 250 miles to the north — at the same time as the plant. Tiffany has a 10-year contract worth at least $500 million with Aber to purchase stones from the Diavik mine. In the past, Tiffany has purchased finished diamonds from wholesalers in New York, Tel Aviv and Antwerp. The new proprietary facility is intended to give the firm more control over its supply chain.
NEW DEAL: CIT Commercial Services on Friday added Bernard Chaus Inc. to its family of apparel clients. Chaus signed a three-year contract for a $40 million revolving line of credit and a $10.5 million term loan. Nick DiPaolo, chief operating officer for Chaus, said that the new agreement with CIT “replaces an existing facility with BNY and GMAC that was due to expire on April 1, 2003.” According to DiPaolo, the amount of the revolver remained about the same, but the term loan was reduced to $10.5 million from $15 million under the old facility.
FAMILY (TREE) DOLLAR: Howard Levine, president and chief executive officer of Family Dollar Stores, will succeed Leon Levine, the store’s founder, as chairman upon his father’s retirement next January. The elder Levine will take the new title of chairman emeritus. Leon Levine founded the Charlotte, N.C.-based discount retailer in 1959 with $3,000 of his own money and another $3,000 from his cousin. It took more than 40 years, but the company broke onto the Fortune 500 list last April, entering at number 443, with $3.67 billion in 2001 sales and earnings of $189.5 million. The firm will take a $1.3 million charge in its fourth quarter to account for Leon Levine’s retirement benefits, corresponding to the amount of his retirement package. Company contributions to his 401K will be discontinued following his departure.
MEISTER ADDING SPORTSWEAR: Bridge dress designer David Meister will launch a sportswear line in fall 2003. Stephen Ruzow, president of women’s wear at Kellwood Co., which has David Meister under its portfolio, said the company decided to expand into sportswear based on the success of the line at retail. Ruzow said the sportswear component should help bring the brand into the U.K., where David Meister dresses are already sold at Harrods and Selfridges, and then into the rest of Europe.