OPERATING NET OFF 30.6% AT BURLINGTON APPAREL
GREENSBORO, N.C. — Burlington Industries said operating profits at its apparel fabrics operation slumped 30.6 percent in the fourth quarter ended Oct. 1, hurt by higher raw material costs and continuing problems in its knitted fabrics division.
This weakness more than offset increasing demand for apparel products in Burlington’s other divisions, including men’s wear, denim, Klopman and yarn.
Operating earnings in the apparel divisions fell to $26.8 million from $38.6 million. Sales were up 7.1 percent to $339.8 million from $317.2 million.
Corporatewide, however, after special items in both periods, Burlington showed a substantially improved bottom line, posting final net income for the three months of $11.8 million, or 17 cents a share, against a net loss of $25.7 million a year ago.
Park R. Davidson, treasurer, said Burlington’s apparel divisions outside of knitted fabrics “all had a good, strong business” with strong backlogs going into 1995.
However, he said margins for these products were hurt by a sharp hike in wool prices, as well as higher prices for cotton and polyester. The company was unable to offset these higher costs with increased selling prices because of a poor apparel market at retail.
Regarding the knitted fabrics division, Davidson said that “demand is good” for knitted fabrics, but the division is still suffering from internal operational problems. As reported, a new management team was put in place in late September to address the problem.
The bottom line in the latest quarter includes a previously announced $7.5 million provision to further restructure the knitted fabrics area.