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Crown Crafts To Sell Woven Products Business

Atlanta-based Crown Crafts Inc. announced it has signed a definitive agreement to sell its woven products business to Mohawk Industries Inc., Calhoun, Ga. Included in the sale will be inventory, buildings, machinery and equipment at sites in Calhoun, Dalton and Chatsworth, Ga.; Blowing Rock, N.C.; and Manchester, N.H. The sale proceeds are estimated at $40 million, subject to adjustment based on the inventory at closing. The acquisition is expected to close by year end.The woven business has annual sales of $85 million and employs about 600 people, most of whom will receive offers of employment from Mohawk.Michael H. Bernstein, CEO, Crown Crafts Inc., stated, Selling this business was an extremely difficult decision because wovens have been the core of Crown Crafts business for many years. However, given the changes in the textile industry, we had to consider every alternative, and Mohawks strong manufacturing position will enable them to leverage the value of these assets. Although we expect to incur a book loss of approximately $10 million on the sale, this transaction will enable us to make a substantial reduction in our debt and restructure the remaining businesses to restore profitability.Commenting on the purchase, Jeffrey S. Lorberbaum, COO, Mohawk, said, The purchase of the Wovens Division of Crown Crafts will provide opportunities to strengthen our position in the textile industry this acquisition will give us the ability to expand into other product lines.

November 2000