NEW YORK — Guilford Mills Inc. detailed its continuing withdrawal from the apparel fabric business in papers filed with the Securities and Exchange Commission last week.
In its Form 10-K annual report filing with the SEC, the Greensboro, N.C.-based textile manufacturer said it forecasts that the apparel segment of its business will account for approximately 10 percent of its total revenue in fiscal 2003.
After closing its dyeing and finishing plant in Altamira, Mexico, and all but one of its U.S.-based apparel fabric plants, the firm has substantially reduced its apparel textile manufacturing capacity. Indeed, at the U.S. plant and the sole remaining plant in Mexico City, apparel fabric production accounts for a small fraction of total output, said a company spokesman. Those mills now primarily make automobile and other industrial fabrics.
Moreover, Guilford reported it has sold its direct-to-home fashions business in its entirety, and will no longer compete in that market.
Overall, in fiscal 2002, the apparel business contributed 14.2 percent of consolidated net sales, while the direct-to-retail home fashions segment chipped in 6.5 percent. The auto business accounted for 69.1 percent of sales with the industrial segment contributing 10.2 percent.
Since its March 2002 bankruptcy filing, the company has largely pulled back from the apparel fabrics business. With its emergence from Chapter 11 in October, the company now focuses on the automotive and industrial fabrics trades because management believes those businesses to be more resilient against competition from foreign imports.
“Historically, the North American auto assembly plants have wanted their suppliers situated in North America because that gives them much greater control over supply,” said a Guilford spokesman. “That’s why we believe this business segment is more resistant to foreign imports.”
Guilford also operates in the industrial segment, which represented 10.2 percent of consolidated net sales in fiscal 2002.
As reported, Guilford, whose bankruptcy came at the tail end of a slew of filings in the textile industry, became the first company of that wave to return to solvency.
As spelled out in the company’s reorganization plan, the mill issued new stock and turned over 90 percent of ownership to its former creditors. Former shareholders got the remaining 10 percent. Additionally, the firm reduced its debt to $145 million from $270 million by reorganizing.