Richloom Buys Assets of Cone Converting
August 10, 2001
New York – Cone Mills Corporation announced Friday that it has agreed to sell certain assets of its John Wolf converted fabrics unit to Richloom Fabrics, Inc., and will then exit the decorative fabrics converting business. The company said this action will eventually result in the elimination of about 25 jobs and the closing of the Decorative Fabrics offices in New York City. Cone Mills purchased John Wolf in 1960.
Chief Executive Officer John L. Bakane said will continue to compete in the woven home fabrics business which operates from Cliffside, NC.
According to Cone, the transaction will provide cash proceeds of approximately $9 million and eliminate operating losses that would otherwise have reached $3 to $4 million for the year 2001. The company expects to record a one-time charge of $5 to $6 million for asset disposal and termination costs during the third quarter of 2001.
Industry observers feel that Richloom made a shrewd purchase. If anything over 30 percent of the sales fall to Richloom's bottom line, then the return on the investment would be handsome.
According to a Cone spokesperson, Richloom will honor existing John Wolf fabrics commission rates on sales made through 31 August. By the same date, Richloom expects to finalize its plans for the integration of John Wolf sales activities into the combined Richloom organization.
Chief Executive Officer John L. Bakane said will continue to compete in the woven home fabrics business which operates from Cliffside, NC.
According to Cone, the transaction will provide cash proceeds of approximately $9 million and eliminate operating losses that would otherwise have reached $3 to $4 million for the year 2001. The company expects to record a one-time charge of $5 to $6 million for asset disposal and termination costs during the third quarter of 2001.
Industry observers feel that Richloom made a shrewd purchase. If anything over 30 percent of the sales fall to Richloom's bottom line, then the return on the investment would be handsome.
According to a Cone spokesperson, Richloom will honor existing John Wolf fabrics commission rates on sales made through 31 August. By the same date, Richloom expects to finalize its plans for the integration of John Wolf sales activities into the combined Richloom organization.
