Ross May Not Carve Up Burlington's Assets

Greensboro, NC, July 31--Five months ago, as a major creditor of Burlington Industries Inc., Wilbur Ross said he thought the company was worth more carved into parts, according to the Charlotte Observer. Today, as Burlington's likely buyer, Ross says he's inclined to build Burlington into a bigger company, though he's short on specifics. Analysts say it's too soon to know what will happen to Burlington, provided a bankruptcy court in Delaware on Thursday approves Ross' $620 million offer to buy the Greensboro-based textile giant. On Monday, Burlington announced Ross' investment firm, W.L. Ross & Co., had made the highest and best offer for the company from among several bidders. Some of the answers to Burlington's fate could come Friday, when Ross visits Burlington's Greensboro headquarters to talk about the company's future with its management--executives who once resisted Ross' overtures toward Burlington but are now forced to embrace him as their new boss. Burlington, once the world's largest textile company, shrunk in recent decades as imports and automation increased. Thirty years ago, Burlington ran 100 plants in the Carolinas and employed 88,000 workers, in towns including Cramerton, Cherryville, Gastonia, Hickory, Kings Mountain, Lincolnton, Mooresville, Mount Holly and Ranlo. Today, Burlington has just 7,000 workers and six Carolinas plants, none in the Charlotte area. Now, it's poised to become even smaller. Ross has said he plans to sell Burlington's Lees Carpets division to Georgia-based Mohawk Industries Inc., the country's second-largest carpet maker. Some analysts doubt Ross will stop there. "I'm hard-pressed to believe that Lees Carpet is the last thing that's likely to be more valuable to somebody else than to what's left of Burlington," said Thomas Lewis with C.L. King & Associates in Buffalo, NY. Ross did not return phone calls Monday and Tuesday. In an interview with The Observer last week, he said he wanted to "figure out what other businesses could be added to Burlington's to make them stronger." Besides carpets, Burlington still makes fabric for apparel as well as for mattresses and other home products--markets that have been declining in recent years as imports have surged. But as part of a reorganization announced last year, Burlington also beefed up its Hong Kong office, which buys products for its customers in Asia and around the world. That division, plus a California-based research arm that is working to develop stain- and water-resistant fabric, offer Burlington a chance to survive in tough times, said David Brookstein, dean of the School of Textiles and Materials Technology at Philadelphia University. And that might make Ross want to avoid selling off Burlington piece by piece, he said. "I think their business model is right on target for the near future and the far future," Brookstein said. "Anybody who made a bid for that company is making a smart move and will be handily rewarded." As some of the uncertainty surrounding Burlington ends, the fate of another large NC textile employer, Pillowtex Corp. of Kannapolis, is unclear. Pillowtex faces a Thursday deadline from its banks to arrange a sale or face a bankruptcy filing, either of which could result in the loss of hundreds or thousands of jobs.