Springs bids for Burlington Home
Staff Staff -- Furniture Today, March 1, 2002
Fort Mill, SC — Making good on its promise to rapidly build Springs Industries into a dominant force on the world textiles stage, the major mill has cut a deal to buy the window and bedding business of bankrupt Burlington Industries Inc. — including a license to use the venerable Burlington House name.
The move is expected generate about $190 million in Burlington House sales for Springs, easily pushing the new king-of-the-hill substantially past the $2 billion mark in annual home fashions sales.
When Springs went private last September after receiving a massive cash infusion from investor David Stockman, it was with a clear mandate to virtually double the size of the largest U.S. producer of home fashions over the next three to five years.
Clearly on a fast track to achieve that ambitious goal, Springs has now announced its second acquisition in as many months, adding a combined total of more than $300 million in annual sales. Last month, Springs got off to a heady start buying the nation's No. 3 area-rug supplier, the Beaulieu Rugs division of Beaulieu of America, with its $125 million in annual sales.
The latest Burlington move propels Springs into the top tier of American curtain and drapery producers, allowing it leapfrog over rivals WestPoint Stevens and Pillowtex.
For cash-strapped Burlington, which entered Chapter 11 in November, it provides some much needed liquidity and flexibility, but at the cost of dismantling one of the proudest franchises in the U.S. home fashions industry.
Both companies have signed a letter of intent, and are now hammering out a definitive purchase agreement, which is expected to be signed by mid-March. Completion of the deal is subject to approval by a U.S. bankruptcy court.
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