Delta Apparel sells North Carolina textile factory
US activewear maker Delta Apparel has sold its textile manufacturing facility in Maiden, North Carolina for $1.7m.
The company in July announced plans to close the facility and transition production to its new plant in Honduras. The move was part of a manufacturing realignment aimed at maximising production at its lower cost facilities, eliminating duplicative fixed costs, and leveraging the latest dyeing and finishing technology available.
"While it was a difficult decision to close the Maiden facility, we are pleased that the new owner plans to continue using it as a wet-processing facility that will provide continued employment opportunities in the Maiden community," says Robert Humphreys, Delta Apparel CEO.
According to Delta, the realignment is expected to significantly lower production costs, improve gross margins and ultimately boost operating earnings by around US$8m annually. It will also use the cash flow realised from the sale of the Maiden assets to lower debt levels.
Humphreys adds the company has partnered with established domestic textile producers to source fabric for its made-in-the-USA products previously produced at this plant, and will continue to sew the fabric into garments at its Rowland, North Carolina apparel facility.
The company is also sourcing in-country fabric to use in its Mexico sew and screen print facilities, which now serve as a quick-turn operation, and says it began increasing fabric production in its Honduran textile facility in June.
"[We] have successfully increased output in that facility on schedule, and should be at full production levels by the end of calendar 2016," adds Humphreys.
Last month, Delta Apparel acquired most of the assets of casual clothing brand Coast Apparel. The company says it plans to rapidly expand Coast's footprint and grow its offerings to consumers.
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