Liquidation of Beacon marks end of an era
Home Accents Today Staff -- Home Accents Today, August 12, 2002
Driving the last nail in the coffin of Beacon Blankets — only a few years ago, the nation's largest blanket producer before neglect, a sale and a failed, costly resuscitation forced it into Chapter 11 — a U.S. Bankruptcy Court in North Carolina has named a close-out company to sell off the century-old company's remaining inventory of more than one million blankets and throws.
Ozer Wholesale Services of Needham, MA, was appointed by the court to liquidate the shut-down of remaining inventory, a stockpile of blankets that Ozer said it values, perhaps optimistically, at more than $25 million.
The close-out specialist said it will sell off the Beacon stockpiles, including a variety of constructions, designs and brands, "domestically and abroad to its client base of major retailers" in what is likely to be "the largest liquidation sale of this kind to date." Jerry Goldstein, Ozer president, added, "We expect to move through this inventory in quick order."
The liquidation sale, begun last week, turns the page to the last chapter in the blanket producer's lately troubled history.
Until recent years, Beacon was easily the nation's mightiest blanket supplier, putting up sales of $203 million in 1997, built up through a string of acquisitions. Itself something of an orphan in recent years, passed on from hand to hand, Beacon had been owned for long decades by the founding Owen family, then sold to National Distillers, then sold again to Cannon Mills, at that time owned by California financier David Murdock. When Murdock later sold off Cannon, he held on to Beacon, running it as a strong and profitable independent company.
Later Beacon changed hands again, this time sold to Pillowtex Corp., then expanding rapidly into the blanket business through a string of acquisitions that began with the earlier buyouts of Tennessee Woolen Mills and Manetta Mills. But saddled with a crushing takeover debt, distracted by restless bankers and investors, and grappling with a foreign manufacturing culture, Pillowtex neglected the blanket business it had paid so much to buy into, and sales eroded from a high of more than $200 million to less than half that, about $91 million, in 2000 — a staggering decline of more than $100 million in just four year's time.
By that time bankrupt, anxious to raise cash and eager to get rid of a business that was by then losing about $3 million a month, Pillowtex finally sold off the struggling blanket business, what was left of it, to a small private investment group made up of managers, an outside investor and a team of industry veterans for about $16.8 million in cash in August 2001. By that time, sales had collapsed to about $20 million a year.
But the timing was bad, with the home fashions market only two months away and no time left to put together a new line. All the new company had to sell was obsolete, excess inventory, and it launched a feverish drive to sell off what it could in order to raise the cash it needed to pay for a costly, needlessly large sales and marketing team and headquarters staff.
Only seven months later, in March of this year, with sales in tatters, its large staff decimated and on a cash-before-delivery status with its yarn suppliers, the century-old company closed its doors and sent its workers home. Unable to find a buyer, or a deep pockets investor with an appetite for risk, Beacon was forced to seek the shelter of the bankruptcy court two months later, in May, and it closed the doors and turned out the lights for good.