DAN RIVER INC. CUTTING CAPACITY, PLANTS, PEOPLE
Byline: Scott Malone
NEW YORK — Dan River Inc. on Wednesday said it plans to cut its apparel fabrics manufacturing capacity and close two plants over the next four months, reducing its overall head count by about 190 people.
The Danville, Va.-based mill expects to move most of its apparel fabrics operations out of its home city to Sevierville, Tenn., where it currently has an apparel fabrics plant. It also plans to close one home fashions mill in Greenville, S.C., and and a home division cut-and-sew facility in Newnan, Ga.
That will result in a total of 396 layoffs; however, the company said it will add employees in Sevierville and in several Virginia facilities. After the closing, the two plants and adding jobs at other facilities, the company will employ about 6,800 in the U.S.
“These consolidations are designed to improve manufacturing performance through reduced costs and better capacity utilization,” chairman and chief executive officer Joseph Lanier Jr. said in a statement.
The company expects the cuts to result in a charge of $4.5 million to $5 million, or 13 to 14 cents a share, for the quarter ending Dec. 31. In the prior-year quarter, the company recorded a net loss of $2.3 million, or 10 cents a share.
The move came two days after Dan River reached an agreement with its lenders to change the terms of its debt, including new covenant levels and interest rates, to allow for continued liquidity.
Unifi Inc. on Wednesday also said it had reached a new five-year agreement with its lenders. Cone Mills Corp. last month said it had forged an agreement with its lenders to extend its credit through January 2003.
Over the past month, other major textile companies have had a harder time seeing eye-to-eye with their lenders. Burlington Industries and Malden Mills are just two of the largest mills to have sought bankruptcy court protection in an effort to resolve debt issues and continue operating.