Fruit of the Loom files for bankruptcy

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A month or so ago an article stated they had computer problems with their distribution system. Their CIO was fired. The article is archived at the old TB2000 site.

http://www.suntimes.com/output/business/29frui.html

Link

Fruit of the Loom files for bankruptcy

December 29, 1999

BY ASSOCIATED PRESS

Fruit of the Loom Ltd., the financially troubled underwear and apparel maker, asked for protection from its creditors Wednesday under Chapter 11 of the U.S. bankruptcy code.

Trading in shares of the Chicago-based company had been halted earlier in the day pending announcement of the petition filed in U.S. Bankruptcy Court in Wilmington, Del.

Acting CEO Dennis S. Bookshester said the filing represented ``the first step in our effort to address the challenges facing the company and protect the brand.''

``We are confident that restructuring our operations and capital structure will enable Fruit of the Loom to emerge as a stronger company in the competitive basic apparel industry and continue our reputation for producing quality apparel,'' he added.

The company announced that Bank of America had agreed to provide a new $625 million secured debtor-in-possession credit facility.

Fruit of the Loom said in a statement issued through the company's Chicago offices that credit would ensure that the company ``has the short-term capital necessary to continue normal, day-to-day operations, such as the purchase of materials and inventory and the payment of suppliers and employees.''

The company has 40,000 at 60 locations worldwide.

The company's brand names include Fruit of the Loom, BVD, Gitano, Best and Screen Stars. Licensed brands include Munsingwear and Wilson.

The company's financial problems have persisted despite a $50.4 million third-quarter profit reported in October that beat Wall Street expectations and reversed losses from a year ago. The rebound followed an aggressive cost-cutting and reduction in inventory.

Fruit of the Loom in July reported a second-quarter $2.3 million loss as sales dropped 12 percent from a year earlier. Moody's Investors Service had earlier downgraded the company's debt ratings, pointing to declining sales and earnings performance, a weak balance sheet and production and distribution woes.

The company has closed many of its U.S. textile operations this year, shifting them and thousands of jobs to cheaper overseas plants in Mexico, Central America and the Caribbean to save money.

In addition, it has transferred its financial base from Chicago to the Cayman Islands.

-- Homer Beanfang (Bats@inbellfry.com), December 29, 1999

Answers

Cayman my *ss! Sounds more like they took it in the shorts.

-- Porky (Porky@in.cellblockD), December 29, 1999.

They shifted thousands of textile jobs from my state, Kentucky, to Latin America ala NAFTA and even tried to get the state to put in an interchange on I-65 in Bowling Green for their buildings there. I hope they suffer a miserable death and in retaliation haven't worn underwear since 97.

-- Johnny (jljtm@bellsouth.com), December 29, 1999.

If this is traceable to a y2k problem, you think they will be able to cover their fruit-o-the-lume asses?

-- (always@smart.ass.inthecrowd), December 29, 1999.

Thanks Homer for the report. I have to admit, that in my effort of trying to find this forum again, I went through several pieces of underwear. Maybe, sales will pickup.

-- Bill (sticky@2sides.tape), December 29, 1999.

Homer, does this mean my purchased pairs are no longer under *wearrany*?

-- dinosaur (dinosaur@williams-net.com), December 29, 1999.


More underwear and long johns! Going shopping tomorrow!

No undies might work in warmer climes, but not around here.

WW

-- Wildweasel (vtmldm@epix.net), December 29, 1999.


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