Textile Group (ITG) has agreed to sell its Burlington House mattress fabrics product line to High
Point, N.C.-based Culp Inc. for approximately $8.3 million, including $2.5 million in cash and
approximately 880,000 shares of Culp common stock. The sale, which includes inventory and the
production rights for ITG’s mattress fabric patterns, is expected to close by the end of January
2007.
According to Joseph L. Gorga, ITG’s president and CEO, ITG will invest the proceeds of the
sale to expand the global operations of its core businesses, while Culp’s focus on mattress fabrics
and its cost-competitiveness in that area will benefit mattress customers.
“ITG continues to implement its business strategy of being a global textile fabrics and
solutions provider focusing on markets where it is able to differentiate itself through innovative
products, styling and competitive manufacturing facilities,” he said. “With its entry into the
automotive fabrics business, through the merger with Safety Components International, ITG is also
focusing on highly engineered technical fabrics.”
“ITG has made the strategic decision to discontinue its US mattress fabrics product line,
and we view this as a great opportunity for Culp,” said Robert G. Culp III, chairman of the board
and CEO, Culp Inc. “Mattress fabric is an important part of our business and accounted for
approximately 40 percent of the company’s sales in our second fiscal quarter.” He added that the
company has made substantial investments in its mattress fabrics business over the past two years,
and that the acquisition of the Burlington House assets will allow it add some $25 million to $30
million in annual mattress fabric sales without investing in fixed assets. He also said Culp’s
existing capacity will allow it to absorb the additional volume within its own facilities.
According to Delores Sides, director, corporate communications and human resources, ITG, the
transition of the product line from Burlington House to Culp will take two to four months. The
exact impact on Burlington House employees isn’t yet clear, although Sides said there will be a
reevaluation of capacity needs going forward at the company’s Pioneer operation. “We do not expect
significant change at our Burlington Finishing plant, as we are in the process of moving apparel
fabrics into that plant, which we expect to balance our employment needs,” she added.
January 16, 2007
