Delta Apparel Consolidates Tee Production in Honduras
Delta Apparel, Greenville, S.C., announced its intent to consolidate fabric production for basic, blank T-shirts at its Ceiba Textiles facility in Honduras, which, in turn will lower costs for those tees.
Some of its tee fabric production currently occurs at it's plant in Maiden, N.C. , but this move will increase Honduras production by 8 percent, or about 900,000 pounds of fabric a week. The cost-effective move will shorten production by about 10 days. Additionally, the North Carolina site will see a 35 percent decrease in total fabric production as a result of the switch, which is expected to be completed by June's end, and the goal of better aligning inventory levels with sales expectations.
“These decisions are always difficult, especially when they affect associates who have been dedicated and loyal to our company for many years," Bob Humphreys, Delta's Chairman and CEO, said. "However, the company can no longer justify the additional cost associated with its current level of domestic fabric production for the highly competitive blank tee shirt business. We believe this economic decision is in the best long-term interest of Delta Apparel and our shareholders.”
The consolidation is expected to save $1.1 million annually upon completion. The transition will cost about $200,000, which is expected to be expensed in Delta's third quarter of fiscal year 2014. While 70 Maiden-based jobs will be impacted, the location will employ 190 associates who will continue to produce U.S.-made goods.
“Delta Apparel is in an excellent position for growth as economic conditions improve and consumer buying power is renewed," Humphrey's 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.”