Delta Apparel Announces the Closing of its Fayetteville, NC Textile Operation
DULUTH, Ga.--(BUSINESS WIRE)-- Delta Apparel, Inc. (NYSE Alternext US: DLA) today announced its plans to close its textile manufacturing facility in Fayetteville, North Carolina. In continuing the Company's manufacturing improvement strategy, the Company is consolidating the textile production for its M. J. Soffe business, currently produced in the Fayetteville, North Carolina facility, into its operations in Maiden, North Carolina and its Ceiba Textiles facility in Honduras.
Bob Humphreys, President and Chief Executive Officer, commented, "These decisions are never easy especially when they affect associates who have been dedicated and loyal to our Company. However, as our business becomes increasingly competitive, we can no longer justify the additional cost associated with operating two US textile facilities. We believe this economic decision is in the best long-term interest of Delta Apparel and our shareholders."
The movement of production will begin in the Company's third fiscal quarter and is scheduled to be complete in June 2009. The cost of this transition is not expected to be material. The closing of the Fayetteville Plant is expected to save the Company approximately $1 million annually once the transition of the fabric production is complete. The Company anticipates this favorable financial impact will be realized in its results of operations in the second half of fiscal 2010.
The movement of textiles out of the Fayetteville facility will impact the employment of 107 associates. The M. J. Soffe Fayetteville campus will continue to employ approximately 550 associates in other capacities including sewing, screen printing, retail packaging, distribution, and product and art development, along with all sales and administrative functions for M. J. Soffe. Associates impacted by the closing will be considered for open positions in these areas as well as transfers to other Delta Apparel facilities.
About Delta Apparel, Inc.
Delta Apparel, Inc., along with its wholly-owned subsidiaries, M. J. Soffe, LLC and Junkfood Clothing Company, is an international apparel design, manufacturing, sourcing and marketing company that features a diverse portfolio of high quality branded and private label activewear apparel. The Company specializes in selling a variety of casual and athletic products through almost every distribution channel for these types of apparel. Its products are sold to specialty and boutique shops, upscale and traditional department stores, mid-tier retailers, sporting goods stores, screen printers, and private label accounts. In addition, certain products are sold to college bookstores and to the U.S. military. Its products are also available direct to consumers on its websites at www.soffe.com, www.junkfoodclothing.com, and www.deltaapparel.com. The Company's operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 6,600 people worldwide. Additional information about the Company is available at www.deltaapparelinc.com.
Statements and other information in this press release that are not reported financial results or other historical information are forward-looking statements. These are based on our expectations and are necessarily dependent upon assumptions, estimates and data that we believe are reasonable and accurate but may be incorrect, incomplete or imprecise. Forward-looking statements are also subject to a number of business risks and uncertainties, any of which could cause actual results to differ materially from those set forth in or implied by the forward-looking statements. The risks and uncertainties include, among others, the general U.S. and international economic conditions; changes in consumer confidence, consumer spending, and demand for apparel products; the ability of our brands and products to meet consumer preferences within the prevailing retail environment; the tightening of credit markets and our ability to operate and grow our business with our existing financing arrangements; the financial difficulties encountered by our customers and higher credit risk exposure; the competitive conditions in the apparel and textile industries; changes in environmental, tax, trade, employment and other laws and regulations; the uncertainty of raw material and energy prices; the relative strength of the United States dollar as against other currencies; and other risks described from time to time in our reports filed with the Securities and Exchange Commission. Accordingly, any forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized. We do not undertake publicly to update or revise the forward-looking statements even if it becomes clear that any projected results will not be realized.
Source: Delta Apparel, Inc.
Released January 28, 2009