DYERSBURG SET TO LIQUIDATE
Byline: Scott Malone
NEW YORK — It’s the end of the road for Dyersburg Corp.
After 10 months in Chapter 11 bankruptcy, the Charlotte, N.C.-based knitter is liquidating.
While the Delaware Bankruptcy Court may yet convert the case to a Chapter 7 proceeding, chairman and chief executive officer T. Eugene McBride said Thursday that one way or the other, the company is closing up shop. The mill was founded in 1929 and went public in 1992.
“Either way, there will be an orderly liquidation,” he said in a phone interview. “We are notifying all of our customers that we are liquidating and we are working with each of them to try to meet their last needs. Under no circumstances will we be producing beyond the end of August.”
Dyersburg is a mill that has seen a dramatic reversal of fortunes over the past five years. In 1997, the company was riding high. It had acquired Alamac Knitting, while a division of the Indonesia textile conglomerate Texmaco took a substantial 23 percent stake in the mill and had talked about upping its holdings in the firm to 50 percent.
When it closed the books on its next fiscal year, in October 1998, the firm recorded record sales of $417.5 million. But profits were off 43 percent. The effects of the Asian financial meltdown had reached the U.S., setting off a chain of events that would prove devastating for the textile industry.
Dyersburg was particularly hard hit, both because the polyester fleece business, which had peaked in the late Nineties, was hard hit from the flood of low-priced imports that washed out of Asia at the time, and because Texmaco found itself in troubled financial straits.
In the years that followed, Dyersburg pursued a number of new strategies, including offering full-package garments, setting up operations in the Dominican Republic and offering its wares for sale online. Still, the company’s financial results continued to deteriorate. Early last year, its shares were delisted from the New York Stock Exchange and in September it filed for bankruptcy.
For the six months ended March 31, the company posted a loss of $12.9 million on sales of $110.7 million, according to a filing with the Securities and Exchange Commission.
In May, Dyersburg announced that it would lay off 900 workers — 40 percent of its labor pool — and close two mills. By June, the company had reached an agreement to sell its United Knitting division.
The mill’s shutdown comes during a particularly rough year for the textile industry. This week, Burlington Industries warned that it may need to make further cuts in operations in the face of low demand, and DuPont officials said they expect the U.S. manufacturing economy to get worse in the third quarter.