Delta Woodside Industries has filed for bankruptcy protection and announced its intention to shut operations. Its Delta Mills subsidiary manufactured fabric for Levi Strauss, Lee, the Gap and the U.S. military.
The Fountain Inn, S.C., company filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware on Friday, citing foreign competition and “overcapacity in the domestic textile business” as principle factors.
“Delta Mills continues to encounter business problems and difficulties, and to sustain significant losses with each fiscal year,” said William H. Hardman, chief financial officer, in a certificate of resolutions from the firm’s board.
According to Hardman’s filing, the company suffered its final blow in August when the U.S. Defense Department reduced its orders from apparel manufacturers that used Delta Mills’ fabrics. This segment of the business represented “a primary source of the entire Delta Mills’ profit margin,” said Hardman.
The company employs 600 people and operates two factories in South Carolina, both of which will be closed in the coming weeks and liquidated in an effort to reimburse creditors.
Like many domestic textile manufacturers, Delta had been forced to make aggressive cuts to survive in recent years. In October 2004, the company revealed plans to close its spinning and weaving mill in Piedmont, S.C., eliminating 361 jobs, or about 25 percent of its workforce.