in a move to expand further, people familiar with the plan said on Friday.
Cone, which makes denim for clothiers Levi Strauss & Co., The Gap, Wrangler and others, is particularly interested in Burlington's Mexican denim-making operations, these sources said. Burlington, which filed for bankruptcy protection in 2001, is the fourth-biggest denim maker and recently expanded Latin American operations.
Cone is one of several financial and strategic buyers that have told Burlington's advisors that they could bid for all or part of Greensboro, North Carolina-based Burlington. Others include Wilbur Ross, the New York investor who holds large chunks of debt in both Cone Mills and Burlington, and heads Burlington's creditors committee.
Burlington has been seeking a buyer since investor Warren Buffett's Berkshire Hathaway Inc. dropped its $579 million cash offer for the company last February. It hired Miller Buckfire Lewis & Co. to seek buyers to help it emerge from Chapter 11 this summer, with first-round bids due in early July.
With an expansion bid, Cone is aiming to be a survivor in a U.S. industry that has seen dozens of companies go bankrupt in the face of cheap foreign textile and clothing imports. And more are teetering on the edge of bankruptcy, including WestPoint Stevens, which recently hired bankruptcy advisors, and Pillowtex Corp., which emerged from bankruptcy a year ago but seems likely to file again, industry experts say.
"The bottom line is that you will have continued and fairly dramatic industry consolidation here," said Anders Maxwell, managing director of Peter J. Solomon Co., an investment bank that specializes in textile industry issues. "The question is, who is going to win?"
Cone Mills officials could not be reached for comment on any interest in Burlington.
In recent years, the textile industry has become the subject of acute interest by distressed debt, or vulture funds, many of which seek to win control of companies in bankruptcy court in debt-for-equity swaps.
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