Posted June 9, 2014

 

GREENVILLE, S.C. – Delta Apparel, Inc. on June 4 announced plans to transfer fabric production for basic, blank T-shirts from the U.S. to its Ceiba Textiles facility in Honduras. The move will eliminate about 70 jobs in Maiden, N.C.

 

The consolidation transfers the production of some fabric for basic tees currently manufactured at the company's Maiden, N.C. plant to Honduras, increasing production at the Ceiba Textiles facility by about 8 percent to roughly 900,000 pounds of fabric per week.

 

This change shifts fabric production for blank tees to the company's most cost-effective facilities and is expected to shorten the production cycle by about 10 days, the company said in a release.

 

In addition, Delta Apparel said it will further reduce U.S. fabric production in order to better align inventory levels with sales expectations. Total fabric production at the Maiden facility will decrease by about 35 percent.

 

“These decisions are always difficult, especially when they affect associates who have been dedicated and loyal to our company for many years,” said Bob Humphreys, chairman and CEO. “However, the company can no longer justify the additional cost associated with its current level of domestic fabric production for the highly competitive blank T-shirt business. We believe this economic decision is in the best long-term interest of Delta Apparel and our shareholders.”

 

The movement of production to the Ceiba Textiles facility will begin immediately and is scheduled to be completed by the end of June, Delta Apparel said. The company said it expects to realize annual savings of about $1.1 million once the consolidation is complete. The anticipated aggregate costs associated with this transition are about $0.2 million, which is expected to be expensed in the company’s fiscal year 2014 third quarter, it said.

 

This facility will continue to employ about 190 people producing fabric to support the company’s USA-made marketed goods and private-label products, as well as the company’s Mexico sewing operations.

 

“Delta Apparel is in an excellent position for growth as economic conditions improve and consumer buying power is renewed,” Humphreys said. “In the meantime, the company is managing costs closely and finding ways to operate more efficiently. We continue to evaluate and improve our manufacturing platform to allow us to introduce new products that consumers want with the efficiency, service and price points that our customers expect.”

 

Delta Apparel, Inc., along with its operating subsidiaries, M.J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC and Art Gun, LLC, is an international design, marketing, manufacturing and sourcing company that features a diverse portfolio of lifestyle basic and branded activewear apparel and headwear. The company specializes in selling casual and athletic products across distribution tiers, including specialty stores, boutiques, department stores, mid-tier and mass chains, college bookstores and the U.S. military.

 

The company's has operations throughout the U.S., Honduras, El Salvador and Mexico, and employs about 6,900 people worldwide.