Guilford Mills, Inc (NYSE: GFD) today announced a strategic realignment of the company's apparel operations in response to increased competition from the Asian market and changes in the textile industry as a whole.

The first casualty of the restructure is the company's Fishman dyeing and finishing plant. It will be closed once current production is completed. Guilford also plans to reduce its dyeing and finishing capacity at its Greenberg plant early in 2001. Circular knit dyeing and finishing will be moved to Mexico as soon as the company's new manufacturing facility opens.

Charles A. Hayes, chairman of Guilford Mills, said: "Guilford, over the last 40 years, grew into the largest warp-knit company in the world. Unfortunately, because of the Asian situation and tremendous increase in imports, we must restructure our operations to ensure that Guilford will be a dominant force in the twenty-first century. This restructuring was done with a heavy heart."

Around 400 workers will be affected by the closure of the Fishman facility. The impact on workers at the Greenberg plant is yet to be determined.

The restructure is expected to cost around $35m to $40m. These costs will be incurred during the fourth quarter of fiscal 2000 and throughout fiscal year 2001.

As a result of the restructuring, the company anticipates that it will not be in compliance, as of the end of fiscal 2000, with certain covenants in its loan agreements and has commenced discussions with its lenders to obtain appropriate amendments or waivers.

John A. Emrich, president and CEO of Guilford Mills, said: "Despite the difficulties in our industry, Guilford Mills intends to remain a leader in the textile industry.

"Our restructured apparel business will focus on high-growth LYCRA(R) containing fabrics for intimate apparel, swimwear and certain ready-to-wear fabrics. We expect to grow our intimate apparel fabric and lace business tied to our customers' garment manufacturing in both Mexico and the Caribbean basin. Our expansion into Tampico, Mexico further supports our cotton / LYCRA(R) strategy and positions our operations close to our customers who have garment manufacturing operations there."

Guilford Mills is an integrated designer and producer of value-added fabrics using a broad range of technologies. The company is the largest warp knitter in the world and is a leader in technological advances in textiles, including microdenier warp knits and wide width circular knits of cotton blended with LYCRA(R). Guilford Mills serves a diversified customer base in the apparel, home furnishings, automotive and industrial markets.