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Archive for Thursday, July 31, 2003

Textile company to close 16 plants, cut 6,450 jobs

July 31, 2003

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— Pillowtex, the maker of towels, rugs and bedding, said Wednesday it planned to shutter its 16 plants and eliminate 6,450 jobs amid a slump that has decimated the textiles industry.

Pillowtex emerged from bankruptcy in May 2002, but continued to face financial troubles and said it did not have the cash to continue operations. The company said it would seek protection under Chapter 11 of the bankruptcy code, then wind down its business and dispose of assets.

"Facing these very difficult circumstances, closing our facilities and preparing for bankruptcy has emerged as our only viable course of action," said Michael Gannaway, chairman and chief executive.

The U.S. textile industry is suffering from its worst economic crisis in decades due to soft consumer demand and intense foreign competition. The downturn has swallowed tens of thousands of jobs and forced hundreds of plant closings in recent years.

Kannapolis, N.C.-based Pillowtex had employed about 7,650 people in the United States and Canada and made home products under the Cannon, Fieldcrest and Royal Velvet brands.

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