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Springs To Focus On Home Furnishings Business

Springs Industries Inc., Fort Mill, S.C., announced it has agreed to acquire the stock of Regal Rugs Inc., North Vernon, Ind., the wholly owned subsidiary of Readicut International, the United Kingdom.The strategic acquisition will further expand our bath and accent rug product lines, said Crandall C. Bowles, Springs chairman and CEO. This purchase will continue Springs strategic emphasis on increasing sales through acquisitions that complement our already extensive line of home furnishings.The purchase price of $30 million is subject to adjustments based on Regals net assets as of the closing and related to certain incremental tax liabilities that might be incurred by Readicut as a result of the transaction, the companies said. Regal will operate as a subsidiary of Springs.Springs will also acquire the remaining 50 percent interest in American Fiber Industries LLC (AFI), Commerce, Calif. Springs acquired its current 50 percent in February 1997.AFI manufactures and distributes bed pillows, mattress pads, down comforters and comforter accessories. It will operate as a subsidiary of Springs Industries, with Jack Foley as its president.Jack and Janet Foley have owned AFI since 1990 and control the remaining 50-percent interest in the company.Springs also announced that it sold its Springfield Division to a management group led by Edward N. Shogan, the divisions president since 1989.Over the past decade, Springs has strategically repositioned itself from a manufacturer of apparel fabrics to leadership in home furnishings, Bowles said. This divestiture marks another major step in this process and allows us to focus all of our efforts on improving our home furnishing business.Springs received approximately $46 million for Springfield, including a preferred equity interest of $10 million in the business. According to the company, Springfields 1998 sales approximated $120 million.The company also announced that it sold its Industrial Products Division to Chiquola Industrial Products Group LLC, an investor group led by Marvin B. Fuller, a former Springs executive, for a price in excess of $24 million.Consideration for the sale was in the form of cash, a subordinated note and a limited, preferred equity position in Chiquola, Springs reported.

February 1999