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Non-Tech : FTL- Fruit of the Loom -- Ignore unavailable to you. Want to Upgrade?

To: JLIHAI who wrote (80)	4/20/2000 12:03:00 PM
From: Arthur Tang	Read Replies (1) \| Respond to of 161

Recent balance sheet dated Jan. 1, 2000 showed they did not accumulated much inventory before filing for chapter 11. FTL will be operating as DIP as long as they can handle the payments of the new liability. Cost structure of old machinery will remain pretty much the same. I have not seen any bank support in terms of credit allowed under EBITDAR projections. Bankers will have to see a plan to extend more credit. They had sold some inventory to AMES. If liquidity perseveres; how to run the DIP would be coming up with a plan. The plan could be selling some asset for cash. And operate with outsourcing in cheap labor countries. However, this plan would be extremely short sighted. Quality and delivery gambles could be insurmountable. So, the plan has to have an effort to introduce new products with all the old customers to support the sales volume. With a liberal amount of letter of credits, a healthy new FTL can emerge and profit from opening the old factories to work three shifts a day. The plan is based on new products that can sell for higher gross margins, not lowering cost. The under garment business is based on two year obsolescence and replacement theory. Any old styling requires a changer of color each year. And new styling every other year on the off year. Wholesale price pressure can be overcome by direct business model. World wide customers have to be contacted for one event of new product showing.