Hanesbrands Inc., Winston-Salem, N.C., has announced it will discontinue its own yarn production
and source all yarn from major yarn suppliers. The plan calls for the sale of three of the branded
apparel maker’s yarn manufacturing operations to Gastonia, N.C.-based sales yarn manufacturer
Parkdale Mills, and the shuttering of a fourth operation.
Hanesbrands stated that it is not strategically advantageous to continue to produce its own
yarn, and outsourcing that production will not change material costs for the company. In addition,
it expects to realize $100 million in balance sheet benefits within six months after the sale,
which is expected to be completed in the fourth quarter of 2009.
“We are focused on optimizing the investments we have made in our supply chain that give us
a competitive advantage,” said Richard A. Noll, chairman and CEO, Hanesbrands. “Producing our own
yarn, when more than adequate large-scale supplies exist, serves no strategic purpose. Outsourcing
yarn is a logical evolutionary step to drive value and improve the use of our assets.”
Parkdale will acquire the operations of Hanesbrands’ Rabun Gap, Ga., Mountain City, Tenn.,
and Galax, Va., yarn facilities, which altogether employ 780 workers. The three plants will
continue to supply yarn to Hanesbrands, as will other existing Parkdale plants in the United
States. According to Hanesbrands, these supplies will satisfy its requirements for a significant
portion of its apparel production in the Western Hemisphere.
Immediately, Hanesbrands also will close its fourth yarn facility in Sanford, N.C.,
impacting some 150 employees; as well as its cotton warehouse in Advance, N.C., and its yarn
warehouse in Clemmons, N.C. Together, the warehouses employ 25 workers.
September 22, 2009