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Guilford Mills Announces Closing Of Cobleskill New York Facility

GREENSBORO, N.C., Sept. 10 /PRNewswire/ -- Guilford Mills, Inc.(NYSE: GFD) today announced its intention to exit the production of stretchknit intimate apparel and swimwear fabrics and lace as well as home fashionslace in the Cobleskill, New York operation. The Company will operate the facility through November 8, 2001 to service remaining orders and assist intransitioning its customers to new suppliers. The Company is currently discussing opportunities for the sale and/or alliance of this operation with other interested parties. Such discussions may result in the continuing operation of the facility under new ownership.The Company had recently consolidated its intimate apparel and swimwear lace and fabric production into this facility and reduced fixed costs by closing two other facilities. However, eroding business conditions haveresulted in further sales and margin declines and increasing uncertainty as to the viability of the operation. The Company does not expect conditions to improve in the near term.The Cobleskill facility employs approximately 500 associates. If the plant is closed, the Company will assist these employees in securing new positions either within or outside of Guilford Mills. The Company will reduce its domestic apparel business selling and administrative staff by 70%. Corporate staff will also be affected as certain functions are decentralized to the non-apparel businesses. Guilford anticipates the fiscal 2001 fourth quarter pretax charge associated with the actions to range from $ 60 to $ 75 million. The charges are substantially related to fixed asset and goodwillimpairment and therefore are predominantly non-cash.Guilford's exit of the Cobleskill plant leaves the Company with two remaining apparel facilities in the U.S. -- a circular knitting plant in North Carolina and a printing plant in New York. In addition, Guilford has twoapparel dyeing and finishing operations in Mexico.John Emrich, President and Chief Executive Officer, said, "The growing apparel imports, strong U.S. dollar, and weak economy have resulted in significant financial losses. These factors, combined with the tightenedcredit in the domestic textile industry, make it impossible for the Company to sustain apparel dyeing and finishing in the U.S. We believe that we have taken every reasonable action to make Cobleskill successful. Unfortunately, we were at such a disadvantage that our efforts were insufficient. It is deeply regrettable that these current market conditions were overwhelming andthat the Company does not have the financial resources to continue operating this magnificent plant until conditions improve."Mr. Emrich added, "Guilford has always believed it can effectively compete in the global apparel industry by manufacturing in Mexico and we intend to continue to dedicate resources to apparel there. We are exploring apparel alliance opportunities in Mexico and the CBI region."Mr. Emrich concluded, "Our strategy to grow our worldwide automotive and industrial fabrics and our direct-to-retail home fashions products has notchanged. While these segments have also been affected by the current economic slowdown, our superior technology and design rank Guilford among the premiersuppliers in each of its markets."From time to time, the Company may publish forward-looking statements relative to such matters as anticipated financial performance, businessprospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Actof 1995 provides a safe harbor for forward-looking statements.This press release may be deemed to contain forward-looking statements and other projections within the meaning of Section 27A of the Securities Act andSection 21E of the Exchange Act. The Company assumes no obligations to update or revise any such forward-looking statements. Such statements could besubject to risk and uncertainty that exist in the operations of the Company and the business environment that could render actual outcomes and results materially different from those predicted. These risks and uncertainties include, without limitation and in no particular order, the following factors as well as risks and uncertainties disclosed in the Company's filings with the Securities and Exchange Commission: 1. general economic factors including, but not limited to, changes in interest rates, foreign currency translation rates, consumer confidence, housing starts, trends in disposable income, changes in consumer demand for goods produced, and cyclical or other downturns 2. the overall level of automotive production and the production of specific car models 3. fashion trends 4. information and technological advances 5. cost and availability of raw materials, labor and natural and other resources 6. domestic and foreign competition 7. domestic and foreign governmental regulations and trade policies 8. reliance on major customers 9. success of marketing, advertising and promotional campaigns 10. inability to achieve cost reductions through consolidation and restructuring or 11. inability to obtain financing on favorable terms or to obtain amendments or waivers with respect to non-compliance with certain covenants in loan agreementsSOURCE Guilford Mills, Inc.Web Site: http://www.guilfordmills.com Copyright 2001 PR Newswire