This is a particularly sad job loss story, another dagger in the heart of the US factory worker>
Throwing In the Towel?
Cannon, Fieldcrest, Charisma May Live On
As Owner Closes Due to Imports, Slow Sales
By DAN MORSE
Staff Reporter of THE WALL STREET JOURNAL
For decades, Americans have slept between Fieldcrest, Cannon and Charisma sheets and dried themselves on Royal Velvet towels. The labels are staples of department stores from coast to coast and, in their heyday, were welcome wedding and shower gifts.
Now as the owner of these fabled brands, Pillowtex Corp., begins closing operations after years of sluggish sales and an import onslaught, the question is, will the labels live on?
"Nobody wants the factories. People do want the brands," said Charles Bremer, director of international trade for the American Textile Manufacturers Institute, a trade group in Washington, D.C.
Estimates of the brands' worth stretch past $50 million. Cannon, which dates to 1887, is a "very powerful brand, and could or should be worth a lot," said Al Ries, chairman of Ries & Ries Inc., a marketing strategy company in Atlanta. Cannon, brand experts say, connotes value, while Royal Velvet brings to mind plushness and Charisma equates with luxury.
But Pillowtex, of Kannapolis, N.C., couldn't make them work. It was saddled by debt, in part from its 1997 acquisition of Fieldcrest Cannon, and it faced a flood of cheap imports from Pakistan, India, Brazil and China. The brands also had to contend with new designer brands like Tommy Hilfiger and Ralph Lauren.
On Wednesday, the company announced it had filed for Chapter 11 bankruptcy reorganization, dismissed 6,450 workers and would put most of its assets, including 16 factories, on the block. The aftermath will take weeks or longer to sort out, but a number of buyers could be interested in the company's brands.
The union that represents most Pillowtex factory workers, Unite, said it will work with the state of North Carolina, where many of the plants are located, to try to keep some of them open. "Unite will strongly oppose efforts by bidders who seek to purchase [Pillowtex] brand names for manufacturing offshore," said Bruce Raynor, the union's president. |
