Hanesbrands sells yarn manufacturing operations, closes N.C. facility
Hanesbrands (NYSE: HBI), parent of Duofold, said it is selling most of its yarn manufacturing operations to Parkdale, a yarn manufacturer based in North Carolina, in a deal expected to close in the fourth quarter. Financial terms of the transaction were not disclosed.
Hanesbrands plans to get all of its yarn from large-scale yarn suppliers. "Producing our own yarn, when more than adequate large-scale supplies exist, serves no strategic purpose," CEO Richard Noll said in a statement.
Parkdale will operate three of the four production plants in Georgia, Tennessee and Virginia, which have 780 employees combined.
Hanesbrands will close the fourth facility, which has about 150 employees, in Sanford, N.C. Hanesbrands also plans to close a cotton warehouse in Advance and Clemmons, both in North Carolina and have 25 employees combined.
The company expects the sale to bolster its balance sheet by $100 million within six months from working capital improvements, lower raw material requirements, reduced inventory and sale proceeds.
Wolverine hit by analyst downgrade; adding jobs at Michigan factory
Wolverine World Wide (NYSE: WWW), parent of Merrell, was downgraded by CL King to "neutral" from "strong buy" because the stock price had risen higher than the firm's target price of $26 per share.
But company shares closed at $24.84, down $1.89, on Sept. 18, after the report came out.
CL King analyst Scott Krasik wrote in a client note any potential good news is "already priced into the stock at these levels and ... there is not a 20 percent further upside to justify our 'strong buy' rating."
He added, "There is very little visibility regarding potential sales growth for spring 2010 right now," noting there were no changes to its profit estimates.
In other company news, Wolverine said it is adding at least 70 jobs at a Big Rapids, Mich., factory that makes Bates footwear after the Michigan Economic Development Corp. recently approved a $2.5 million tax credit for the expansion.
The company said in July it was closing its Bates plant in Jonesboro, Ark., and shifting production to Big Rapids, about 50 miles north of Grand Rapids. At the time, it said the Jonesboro factory was closing in six to nine months, putting 270 people out of work.
Timberland CFO to exit, names replacement
Timberland (NYSE: TBL) said Chief Financial Officer John Crimmins will be leaving the company, effective Sept. 30, and has named Sara Lee Corp's Carrie Teffner as his replacement.
Teffner has been CFO of Sara Lee International Household and Body Care since 2008.
No explanation was given for Crimmins' departure.
--Compiled by Wendy Geister
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