Profiles of Pillowtex and Culp

Pillowtex and Culp, two of the USA?s leading textile groups, have strong market positions within their chosen business areas, respectively: home bedroom, bathroom and kitchen textile products; and upholstery fabrics and mattress ticking. But each has been suffering from the recent economic slowdown in the USA. Each is also highly dependent for its fortunes on the US market.

Pillowtex grew rapidly in 1997-98 as a result of two major acquisitions: Fieldcrest Cannon and Leshner. But since then it has been grappling with a high level of long-term debt. In 1999 and in the first half of 2000 it sustained net losses, and in November 2000 it filed for reorganisation under Chapter 11 of the US Bankruptcy Code. Looking ahead, Pillowtex is pursuing four core strategic objectives: to further develop its industry-leading position; to strengthen its customer relationships; to further develop as a "one-stop" source for retailers; and to enhance operational efficiency and reduce costs.

Culp sustained a net loss for the final three quarters of 2000 and suspended quarterly dividend payments for the first time in almost two decades. Priority is being given to cost- and debt-reduction - although in 2000 Culp?s debt position was less serious than that of Pillowtex. Culp has drawn up a strategic plan incorporating five core competitive initiatives: to undertake further acquisitions; to continue to offer customers one of the world?s broadest ranges of upholstery fabrics and mattress ticking products; to maintain a diverse and global customer base; to continue to be a vertically-integrated manufacturer; and to continue to set design innovation as a cornerstone of group strategy.

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