Industry Applauds Buffett’s Interest in Textile Sector
NEW YORK — Hurray!
The U.S. textile industry gave Warren Buffett’s arrival on the scene a major thumbs up Tuesday. The move gives industry executives confidence there is potential to rebuild the long-downtrodden sector — but...
The U.S. textile industry gave Warren Buffett’s arrival on the scene a major thumbs up Tuesday. The move gives industry executives confidence there is potential to rebuild the long-downtrodden sector — but they acknowledged that Buffett is far from the industry’s white knight.
"Burlington should be one of the survivors of the U.S. textile industry," said Gail Strickler, president of the Textile Distributors Association. "I think Warren Buffett rarely makes bad decisions and he’s getting the company for a steal."
Berkshire Hathaway also owns Fechheimer Brothers Co., a leading uniform manufacturer for the public safety, postal, military, corrections, and transportation markets. Meanwhile, Burlington specializes in wool and polyester-wool blends used in career apparel and uniforms.
"He could probably be his biggest customer," said Strickler. "Some of the uniform divisions in Burlington are by far the leaders in that area. I think he’s smart enough to know the U.S. market is limited, but understands the potential impact of a U.S.-based global company that understands its market [from the inside]."
Parks Shackelford, president of the American Textile Manufacturers Institute, said he found the move encouraging and is hopeful that Buffett has faith in the remaining sectors of the domestic industry.
"He’s got a record of acquiring companies that are undervalued," said Nicholas Hahn, founder and managing director of Hahn International Ltd., a textile consulting firm. "Though I don’t know his game plan, he must feel there’s latent value to be realized in the industry when the economy turns around. He doesn’t usually jump in where fools tread."
Hahn noted that during Burlington’s latest reorganization plan, the company began outsourcing much of its production to overseas facilities. Hahn said he questioned whether Buffett found potential in the U.S. textile industry or the outsourcing business strategy, with an in-house focus on marketing and product development.
Bill Ghitis, president of global apparel at DuPont Textiles and Interiors, said the acquisition is a purposeful strategy for Berkshire Hathaway since they’ve taken an interest in textile and apparel companies in recent years, such as Fechheimer Bros. and Fruit of the Loom."If Mr. Buffett thinks there is money to be made in textiles, it makes me feel good," said Ghitis. "It makes sense to me and I think it will bring more confidence to the business. Maybe there will be some followers."
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