Pillowtex blanket business sold
Company to get $16.8 million

KANNAPOLIS — Pillowtex officials announced a $16.8-million deal this morning to sell the troubled textile company’s blanket division.

Beacon Acquisition Co., a group of blanket division managers and a private investor, has agreed to buy Swannanoa-based Beacon Manufacturing Co.

Closing on the sale is scheduled for late August. It is subject to approval by the U.S. Bankruptcy Court administering Pillowtex’s Chapter 11 reorganization.

“It’s obviously going to be a big challenge, and we’re excited about the opportunity here,” said Tedd Smith, president of Beacon Acquisition. “Now comes the tough part, making everything work.”

John Kuklenski, an Asheville businessman, joined the blanket division managers to form the new company. It will employ about 700 people in two blanket-making plants and a distribution center.

Beacon, which designs, manufactures and markets blankets, includes an acrylic blanket plant in Swannanoa and a cotton blanket plant in Westminster, S.C. The company will temporarily lease a Mauldin, S.C., blanket distribution facility from Pillowtex.

Pillowtex put the blanket division on the market earlier this year and had been negotiating for months with the managers. Kuklenski replaced Core Point Capital, a Charlotte investment firm that dropped out of the deal.

Tony Williams, Pillowtex president and chief operating officer, said the sale is part of the company’s plan to restructure and emerge from bankruptcy. Company officials have said shedding non-essential parts of the Pillowtex will be key in its return to long-term health.

“We are very pleased that an agreement has been reached whereby the Beacon Manufacturing plants will continue to operate under a group of existing managers who know the business,” Williams said in a prepared statement.

In an effort to streamline, Pillowtex also has closed plants and trimmed its work force. Most recently, it closed Plant 4 in Kannapolis and cut 780 jobs in Kannapolis and Columbus, Ga.

Those moves reflect a larger reaction in the nation’s textile industry to lagging sales and increasing foreign competition. In the past year, the industry has shed some 56,000 jobs, 13,000 of those in North Carolina.

But Smith said the outlook is better for sales of domestically-made blankets than for other textiles because blankets are bulkier than goods like towels and washcloths and therefore harder to ship from overseas.

Smith said Beacon will no longer be a part of Pillowtex’s bankruptcy case once the sale is final.

After the sale, Pillowtex will employ about 10,800 people at plants in the U.S. and Canada. The company employs around 4,800 workers in Cabarrus and Rowan counties.

Contact Scott Jenkins at 704-797-4248 or sjenkins@salisburypost.com .