TEXFI DUMPING AREAS OF WEAKER SALES
NEW YORK — Texfi Industries said Monday it is discontinuing its commodity yarn operations in High Point, N.C., and its corduroy and diaper fabric operations at Jefferson, Ga.
“We decided to close those operations due to weak market conditions for ring-spun yarns and diaper fabrics and to enable us to focus on core businesses,” said Andrew Parise Jr., Texfi’s president and chief operating officer.
About 300 employees will be affected: an undetermined number to be laid off and others to be offered jobs within Texfi, a spokesman said. He added that the company is actively pursuing the sales of both divisions. If a buyer is not found for its commodity yarn operations, which produced mostly ring-spun yarns, Texfi said, the High Point plant will be closed on April 1.
Texfi said it will continue to operate its Southworth plant in Jefferson. It produces fabrics of man-made fibers for Texfi Blends, one of Texfi’s core businesses.
The discontinuation of the businesses will result in an $8 million charge that will be taken in the first quarter, which ends today. Due to the noncash nature of many of the charges and because the cash to be realized as inventories and accounts receivable come from the affected operations, the company expects to realize net cash of about $3 million on the move during the fiscal year ending Oct. 31, 1995.
For the fiscal year that ended Oct. 31, 1994, Texfi lost $8.4 million on sales of $282.9 million. The discontinued operations combined for sales of $26.2 million and operating losses of $4.6 million.
With the moves, Texfi, based in Rocky Mount, N.C., is consolidating its operations into two divisions: apparel, which consists of the Kingstree Knits T-shirt operation, and fabrics, which consists of Texfi Blends, the company’s knit converting operation, elastics and gray goods. Previously, the company had three divisions: finished fabrics, gray fabrics and apparel.