TULTEX CORP. FILES FOR BANKRUPTCY
NEW YORK — Tultex Corp. filed for Chapter 11 bankruptcy court protection Friday, a move that will help the company stem the flow of red ink but has resulted in an immediate loss of 2,600 jobs.
As part of its restructuring, Tultex said it has closed six manufacturing facilities in Virginia, North Carolina and Jamaica. The company also shut its distribution center and downsized its manufacturing operation in Martinsville, Va. Going-out-of-business sales has started at its 25 retail outlets.
O. Randolph Rollins, president and chief executive officer, said in a statement, “The only way to survive in the face of foreign competition is to outsource manufacturing needs. Simply put, America’s textile and apparel industry has too much high-cost, domestic manufacturing capacity.”
He added that the filing was the “only alternative that will give us breathing space and relief from certain contractual obligations.”
The petition, filed with the bankruptcy court in Lynchburg, Va., was not immediately available. The company said it has a $150 million debtor-in-possession financing facility to fund day-to-day operations.
Tultex reported a $35.4 million net loss on sales of $120.5 million for the third quarter ended Oct. 2. In the comparable period last year, the net loss was $2.4 million on sales of $136.4 million.
The company manufactures activewear under the Discus Athletic and Track Gear brands, and under the Tultex label. The apparel is sold in department stores, sporting goods stores and specialty chains.
Shares of Tultex last traded at 9/64 on Thursday, before trading was suspended by the New York Stock Exchange because of the low selling price.