The Associated Press
WEST POINT, Ga. - WestPoint Stevens Inc., one of the nation's largest makers of sheets, pillow cases and towels under names such as Martha Stewart, has filed for bankruptcy protection, and its chief executive has agreed to resign, company officials said Monday.
The textile company has been struggling with high debt, a slumping economy and competition from low-cost rivals in China and Central America. A number of U.S. textile firms, including Burlington Industries and Malden Mills, have filed for bankruptcy in recent years.
WestPoint produces textiles under several brand names, including Martha Stewart, Ralph Lauren, Stevens, Martex, Vellux, Disney Home and Joe Boxer.
The company filed for Chapter 11 protection from its creditors Sunday in U.S. Bankruptcy Court in the Southern District of New York, Lorraine Miller, WestPoint's senior vice president of investor relations, said.
Under an agreement with bondholders, Holcombe T. Green Jr. will resign as chief executive officer, and M.L. "Chip" Fontenot, the current president and chief operating officer, will become the interim chief executive, pending approval by the court.
Miller said no layoffs or pay cuts were planned at the company, which was founded almost 200 years ago and employs about 14,600 people.
"We hope the financial restructuring will help the company by giving us more flexibility to compete more effectively in the home fashions industry," Miller said. "WestPoint Stevens ... is a sound company that's been operating with a capital structure that has not been appropriate."
To keep the company operating during bankruptcy, WestPoint Stevens has received commitments for up to $300 million in financing from a group of lenders, including Bank of America and Wachovia, Miller said.
In the past decade, the company accumulated $1.8 billion in debt.
MEDIA OWNERSHIP RULING
Local consequences up for debate
FCC eases limits on media ownership
Q&A about rule changes
LOCAL BUSINESS NEWS
Kobe Steel to build plant in Ky.
Morning Memo: Hot tips & news to start your business day
NATIONAL BUSINESS NEWS
Manufacturing declines, but outlook improving
'LifeLog' to record all one does
TiVo to sell info on viewer choice
Employers hire chaplains to counsel workers
WestPoint Stevens files for Ch. 11
Pecan growers hope to match