Burlington Rug: 'We're Still Here'

Company Combating Rumors of Demise

By Cecile B. Corral -- Home Textiles Today, 1/24/2005 12:00:00 AM

Monticello, Ark. — —

Monticello, Ark. — Burlington Rug Corp., a manufacturer and importer of area, accent and bath rugs, is battling rumors that it plans to permanently shut down.

Earlier this month, the company took out a full-page advertisement in hopes of dispelling the rumors.

Gary Brookshire, president and CEO since the company was sold in August to Prudential Capital Partners LLC, said such rumors have done damage he is attempting to reverse.

“We've been getting beaten to death by people saying we're not going to be around,” Brookshire said. “I know it's cost us placement, and it's made us run the risk of losing valuable employees.”

The rumors, he said, began circulating in October soon after the company sold its last remaining piece of carpet manufacturing equipment — a tufting cut-pile machine — to a small niche player. The month before, Burlington had sold its broadloom carpet business to Mattel Industries.

“Rumors started that we were selling our equipment to make cash,” Brookshire said. “But the reality is that we had generated enough cash from selling off our excess inventory.”

In fact, he said, Burlington has maintained a seven-figure cash balance over the past four months.

Brookshire also said the company has increased its placement with new and existing retailer customers.

“We've been particularly successful in the Canadian market, where we've seen 40 to 50 percent (sales) increases,” he added.

This is not the first time in Burlington Rug Corp.'s four-year life span that it has faced rumors of financial troubles. In 2001, a year after Saeid Korhani bought the Monticello facility and the right to use the Burlington name from Burlington Industries, he issued a statement announcing his company was not in financial trouble, unlike its larger namesake, Burlington Industries.

On its 21 tufting machines at its factory and headquarters here, Burlington manufactures various types of product, including: high-definition olefin patterned accent and area rugs; value-priced polyester embossed print rugs; its Royal Textures collection, which employs the company's pattern tufting, full-range dying capabilities and sublimation heat-transfer printing processes; and several branded bath rug programs that include private label programs and joint-venture product with Canadian bath rowel company Cambridge.

The company is also in the process of expanding its imported offerings, which currently comprise 20 percent of the total business. These rugs are higher-end Chromajet printed rugs, “which we see as supplements to what we do best here at our facilities,” said Robert Devlin, vice president, business development.

The company recently shut down its permanent showroom in Atlanta at the AmericasMart, shifting its focus to customers it sees in New York during the bi-annual textiles markets.