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Hanesbrands to sell yarn operations, close 3 facilities

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Thursday, September 17, 2009

(Updated 1:54 pm)

Staff Reports

WINSTON-SALEM — Hanesbrands Inc. said today it will stop making its own yarn, a move that will close one plant and two warehouses in North Carolina.

Hanesbrands has agreed to sell most of its yarn manufacturing operations to Parkdale, a yarn maker based in Gastonia that will supply a substantial amount of Hanesbrands’ yarn needs.

The sale is expected to close in the fourth quarter and would result in Parkdale operating three of the four Hanesbrands yarn production plants. Hanesbrands said the outsourcing would "generate $100 million of balance sheet benefits within six months after the sale," according to a news release.

“We are focused on optimizing the investments we have made in our supply chain that give us a competitive advantage,” Chairman and CEO Richard A. Noll stated in the release. “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 take over operations of Hanesbrands yarn plants in Rabun Gap, Ga.; Mountain City, Tenn.; and Galax, Va., which have a combined 780 employees. Parkdale will supply Hanesbrands from those facilities and other existing Parkdale U.S. production plants.

Hanesbrands will cease new production immediately at its remaining yarn plant in Sanford. The production capacity of the Sanford plant, which has about 150 employees, is not needed by Parkdale, according to the release. Hanesbrands will also close by the end of the year its cotton warehouse in Advance and yarn warehouse in Clemmons, which have a combined 25 employees.

Hanesbrands, based in Winston-Salem, sells apparel under brands including Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra.

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Packfan4life

September 17, 2009 - 10:42 am EDT

I quit buying Hanes brands products when they closed their Eden plant. I now look to see what is American Manufactured and I have been successful in finding items made here. Yeah , you move the jobs away and expect us to buy your products ! Bite Me!! Boycott Hanes everyone .

edward0275

September 17, 2009 - 11:41 am EDT

This may not be as negative as it seems. Parkdale is "taking over" operation of three of the four plants. This could end up saving jobs in the long run. Parkdale Mills has plants in Thomasville, Lexington, Salisbury, Belmont, Landis, Boonville, Monroe, Walnut Cove, Sanford, Kings Mountain, Gastonia, Sparta, Mt. Holly, and several plants in Hillsville, Va.

heeeheee

September 17, 2009 - 1:50 pm EDT

I worked for this company for almost 20 years. I saw it buy and sell plants, close plants, move operations to some other country, over and over again. I trained a couple of folks to do my job, they went home to their country, and started doing my job for about 10% of what I was making - labor costs are the biggest kick in the pants for company's than can no longer hit the bottom line, and then in 6 months, I was "no longer qualified to do my job" - but they asked me to train my replacement.

Its good that Parkdale is getting the business, but soon, it will cost Hanesbrands too much to buy this yarn domestically, and they will source it from China, and Parkdale will be laying off good people.

newkid

September 17, 2009 - 2:27 pm EDT

“We are focused on optimizing the investments we have made in our supply chain that give us a competitive advantage,” Chairman and CEO Richard A. Noll.

Richard A. Noll 2006 compensation:

salary $575,000 Bonus: $1,281,128 Restricted stock award: 248,715