NEW YORK — Dan River Inc. said Tuesday it plans to sell its apparel fabrics division as part of a strategy to focus on its core home fashions business.
Anderson LeNeave & Co., a Charlotte, N.C.-based investment bank, has been retained to help identify qualified buyers for the apparel fabrics segment.
Barry Shea, president and chief executive officer of Dan River, couldn’t be reached for comment, but said in a statement, “Dan River has a strong heritage in apparel fabrics, but our future is in the home fashions arena. This move will allow us to dedicate all of our resources to our home fashions business in which we see better growth opportunities for the future.”
Jim Martin, president of the apparel fabrics division, said that the group’s estimated sales for the year are $80 million. Martin declined further comment about the sale.
Founded as a yarn and fabric company in 1883, Dan River supplies fabric to the U.S. Army, Navy, Air Force and Coast Guard and produces sportswear and shirting fabrics. Calvin Barnhardt, director of human resources for the Danville, Va.-based company, said the apparel fabrics segment employs 800 people. Their jobs will depend on who buys the division.
The company’s No Trace hunting apparel business will not be part of the sale, said the company.
The sale is expected to close by the end of the year and will mark the end of a tumultuous two years spent fighting sinking revenues and rising debt. By the end of September 2003, apparel fabric sales had declined by more than 20 percent and losses had mounted to more than $120 million. The company subsequently closed several plants to reduce head count.
Losses continued, however, and in March 2004, Dan River filed for Chapter 11 bankruptcy protection under the weight of a $371.8 million debt load. Two more facilities were shuttered soon after, reducing head count to 4,100. In January 2005, the company sold its engineered products division, which made fabrics used in high-pressure industrial hoses, to an affiliate of Industrial Specialty Fabrics Inc. in a $9.4 million deal. A month later, the company was able to emerge from bankruptcy.
Filing for bankruptcy has been a frequent occurrence for most of the major domestic mills during the past five years, including Burlington Industries, Cone Mills, Malden Mills, Guilford Mills and Galey & Lord. As with Dan River, all were able to emerge from bankruptcy.