Picks and pans
Jennifer Marks, Editor-in-Chief -- Home Textiles Today, 8/12/2002 12:00:00 AM
Every industry has its unofficial system of lauding accomplishment and frowning at poor decisions — bouquets and brickbats, kudos and cudgels. You get the idea.
After much deliberation, the brain trust at Home Textiles Today has come up with our own pair of labels: cotton balls and boll weevils. Our winners and sinners this week:
Cotton balls to Tyco ex-ceo Dennis Kozlowski. For in the course of squandering $135 million in company money on artwork, luxury vacations and a mansion, the once high-flying capitalist generously dropped $6,000 on a single shower curtain. I'd love to know what the price/value equation was on that purchase.
Boll weevils to Pillowtex for the ridiculous claim in its second quarter earnings press release that it could not compare quarterly results to those from the year-ago period because fresh-start accounting adjusted its historical assets and liabilities "to their respective fair values." Instead, the company divided results information into the periods prior to June 1, 2002 (when it officially recognized its emergence from bankruptcy), and the period on and subsequent to June 1, 2002. Come on, guys. Don't make us get out our calculators. Some of the numbers were bad, but some of the numbers were good. And sure, gussying up the presentation of one's first report out of Chapter 11 is a common game. But games aren't playing so well these days.
Cotton balls to the believers. If I had a dollar for every time I've been told that the home textiles industry will ultimately contract down to four or five companies serving four or five retailers, I'd be out buying $6,000 shower curtains, too. What continues to amaze is not only how many companies remain in this business but the scope of their ambitions. Remember this: Wal-Mart was once a regional chain, and Croscill was once a curtain house. You can never know for sure who's going to make the great leap ahead.
Boll weevils to the concept of auction-driven merchandising. Everybody pretends that the winners are going to produce goods up to spec — even when they're bidding at 15 percent below cost. But everybody also knows that specs frequently get knocked down after the dust settles. At the end of the day, it's a poor strategy for ensuring consistent merchandise quality.
Cotton balls to the companies that cheat death. Who would have bet on Glenoit coming out of Chapter 11 bankruptcy as its own entity? Who would have believed a year ago that Strouds would still be in business today? It's just another reminder that conventional wisdom isn't always on target. When I joined this publication two-and-a-half years ago, several people told me that CHF would be gone within the year, and one sage summed it up by saying: "Stick a fork 'em." Whoops!
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