FTL POSTS LOSS OF $81.1M, CITES PLANT PROBLEMS
NEW YORK — Fruit of the Loom, operating in bankruptcy proceedings since December, said past plant inefficiencies caused net losses to significantly widen in the first quarter, to $81.8 million from $9 million.
Sales nudged up 1.2 percent to $374.9 million from $370.6 million.
The loss includes a charge of approximately $76.9 million related to manufacturing and operating difficulties that were experienced in 1999’s third quarter on inventory sold during the first quarter of 2000.
A $72.2 million similar charge for plant inefficiencies in the fourth quarter will be included in the second quarter.
John Holland, executive vice president of operations, said the firm “has begun to correct many of the operating problems which plagued our company during the past two years,” with average domestic retail order fill-rate improved to 90 percent in the first quarter from 71 percent a year ago.
“The company has implemented procedures to increase the efficiency of our plants, resulting in significant reductions in overtime, freight costs and contractor-supplied yarn and fabric,” Holland said.
Consolidation of sales and marketing helped reduce operating expenses to 17 percent of sales from 18.4 percent a year ago
Sales at its retail division, which sells directly to retailers, grew 5.7 percent to $195.7 million, while the activewear unit, which sells to screenprinters, advanced 13.1 percent to $124.5 million.
“Demand for our products remains strong, manufacturing trends are positive and the company’s partnership with its customers and suppliers is as solid and important as ever,” said Dennis Bookshester, chief executive.