Green departs in a final deal
GDA Staff -- Gifts & Dec, June 9, 2003
In the first of what's likely to be a long string of changes that will ultimately reshape the nation's second-largest textiles producer, WestPoint said it has cut its ties to former chairman, ceo and majority owner Holcombe T. Green Jr. and is looking for a fresh face to run the company.
Taking the reins in the meantime is interim chief executive M.L. "Chip" Fontenot, now president and coo, an old hand at bankruptcy, restructuring and working to turn around distressed companies. Low-key but firmly decisive in style, Fontenot is expected to pull the trigger quickly as he drafts a new battle plan for WestPoint, and at the same time works to calm investors, banks and bondholders.
The big unknown in the executive equation is the man who may be pulling a lot of the strings backstage — Edward S. Lampert, the deep-pockets Greenwich, CT-based financier to a growing portfolio of companies that now includes WestPoint, Kmart and Sears, Roebuck. Lampert, through his ESL investment company, owns about $400 million worth of WestPoint Stevens bonds, and could end up the company's majority shareholder when it comes out of Chapter 11.
In a move that now sounds almost like a dry run for WestPoint, Lampert earlier bought Kmart bonds at deeply discounted prices and parlayed that position into a large ownership stake in the retailer. Shortly after Kmart emerged from bankruptcy, he was named chairman of the board. In addition to his controlling stake in Kmart, and a potentially controlling stake in WestPoint, Lampert now owns almost 10 percent of the outstanding shares of Sears, Roebuck and Co.
Speculation continues to swirl around Lampert and his plans, notably centering around a possible merger of Kmart and Sears. Should that alliance ever take place, it could put WestPoint in a position to function as a virtual contract supplier to two of the nation's largest retailers, lowering its overhead costs and running its plants full, sharply boosting margins and profits in the process.
And, with Pillowtex Corp. deeply troubled and running out of time, Lampert is clearly able, if the opportunity arises, to enter into any potential auction of the Pillowtex stable of brands — including Cannon, Charisma and RoyalVelvet — on behalf WestPoint Stevens, in which he's now so heavily invested.
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