Tultex Corp., the maker of Discus Athletic sweatshirts, filed for bankruptcy protection today and will shut most of its remaining plants and fire 2,600, or 60 percent, of its employees.
Tultex, blaming competition from abroad, said it will close six of its eight factories in Virginia, North Carolina and Jamaica, and a distribution center in Virginia. It will hire lower-cost companies overseas to make its products, which include Tultex and Track Gear T-shirts and athletic clothes.
Chief executive O. Randolph Rollins has been closing plants and firing workers in recent months in response to high costs and slow sales of fleece clothing such as sweatpants. Rivals such as Russell Corp. and Fruit of the Loom Ltd. have been shutting dozens of plants, firing thousands and shifting work overseas for the past few years.
"The company's still operating like this is the middle of the 19th century," said Harry Bernard, an apparel-industry consultant at Colton Bernard Inc.
Last year Russell said it would fire about 4,000, or 22 percent of its workers, as part of a three-year plan to restructure its business. Over the past two years, Fruit of the Loom has fired more than 8,000 people and has moved some jobs overseas.
Before the announcement, Tultex had 4,400 workers left after a string of closures and cutbacks since August. It had 5,138 employees as of Jan. 2, according to a regulatory filing.
Tultex said bank lenders agreed to provide $150 million in financing to allow it to keep operating. It had sales of $469 million last year.
"America's textile and apparel industry has too much high-cost, domestic manufacturing capacity," said Rollins, who was named president and CEO in August.
On Nov. 19, Tultex said it would close a Virginia plant and fire about 145 workers. On Oct. 28, it said it would cut 800 jobs and shut Virginia and North Carolina plants. It said Oct. 15 it would close a fabric-making facility with 120 workers in North Carolina and on Oct. 6 said it would cut 285 jobs and close 12 stores. And in September, Tultex said it would shutter a sweatshirt factory in Virginia.
"Fleecewear has been a problem area for athletic retailers," said analyst John Shanley of First Security Van Kasper.
Tultex said today it will have going-out-of-business sales at its 25 retail outlets.
The company didn't say where it filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Tultex's stock also was delisted by the New York Stock Exchange and last traded at about 14 cents a share. The shares had traded at a high of $8.62 1/2 in March 1997.