fabric and mattress ticking manufacturer Culp Inc. has announced it will close two North
Carolina-based plants as part of a revised strategy in its US upholstery fabrics operation.
The company will close its weaving plant in Graham, moving some of the production from that
facility to its Anderson, S.C.-based plant and overseas to its Shanghai plant, and contracting with
other weavers to provide a small quantity of that production. The Anderson plant — its last
remaining upholstery-weaving plant in the United States — will produce both velvets and decorative
fabrics.
Culp also will shutter its yarn-manufacturing plant in Lincolnton and outsource its
specialty yarn production.
According to Robert G. Culp III, the company’s chairman and CEO, the closures, expected to
be substantially complete by the end of April 2007, will result in the loss of approximately 185
jobs.
The announcement of the plant closures comes on the heels of Culp’s posting of a profit for
the second quarter (Q2) of fiscal year 2007 — its second consecutive quarterly profit following
losses going back two years. Profits in the company’s upholstery fabrics segment were largely due
to its operation in China, as US-based production has been shrinking, while production in China has
grown steadily and significantly. Q2 sales of non-US-produced upholstery fabrics represented
approximately 58 percent of Culp’s total upholstery fabric sales for the quarter. In addition, even
as the sales of China-produced fabrics have grown, overall sales volumes have dropped, registering
a 17.4-percent decline in Q2 2007 compared with year-earlier sales.
“We have made considerable progress in changing our product strategy, reducing our
manufacturing complexities and improving our cost structure in the US upholstery fabrics business,
Culp said. “At the same time, we have been aggressively growing our China-produced business.
However, the lower sales volumes in our decorative fabrics and yarn plants are having a significant
impact on the profitability of our overall upholstery fabrics business. By further consolidating
our US manufacturing operations and utilizing lower-cost manufacturing alternatives, we are
reducing our operating costs and improving our domestic capacity utilization.”
November 1, 2006
