
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, January 9, 1994                   TAG: 9401050284
SECTION: BUSINESS                    PAGE: F1   EDITION: METRO 
SOURCE: Sandra Brown Kelly Staff Writer
DATELINE:                                 LENGTH: Short

FLEECEWEAR LEAVES 'EM SWEATING

Coinciding with Tultex Corp.'s mid-December announcement that the Martinsville company was starting a major reduction in its work force were analysts' reports that painted a generally dreary picture for textile companies.

Jay J. Meltzer of Goldman Sachs pointed to a decrease in demand for T-shirts and fleecewear in recent months in his company's report that lowered earnings expectations for Tultex. Goldman Sachs also said it would withhold any positive report on the larger T-shirt and fleece producers until it saw how "secondary" and "marginal" companies were restructured.

Overexpansion and excessive inventory were blamed for the position of companies like Tultex. When wholesale distributors and retailers tried to hold down their inventories with "hand-to-mouth" buying, manufacturers were forced to cut back as well, one report said.

J.P. Morgan Securities Inc. noted that not only was Tultex under pressure, but that researchers' "conversations with Fruit of the Loom, Russell and VF Corp. also point to disappointing fourth-quarter activewear sales."

"The first half of 1994 could prove difficult and result in further competitive moves by large players," concluded the Morgan researchers.

"Cautiously optimistic" is what Carl Reynolds, a vice president at Bassett- Walker Inc., had to say about 1994. However, he said Bassett-Walker, a subsidiary of VF Corp., had a slow 1993 but "it did end on an upbeat note."

Reynolds also said that Bassett-Walker plants are on full schedule.

by CNB