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Fruit of the Loom files for bankruptcy
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December 29, 1999: 5:52 p.m. ET
Struggling underwear and apparel company files for Chapter 11 protection
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NEW YORK (CNNfn) - Struggling underwear and apparel maker Fruit of the Loom Ltd. filed for Chapter 11 bankruptcy protection , the company said Wednesday.
In a statement, the Chicago-based Fruit of the Loom said one of its lenders agreed to provide $625 million in debtor-in-possession financing to ensure the company has the short-term capital to continue day-to-day operations such as the purchase materials and inventory, and the payment of suppliers and employees.
"The Chapter 11 filing is the first step in our effort to address the challenges facing the company and protect the brand,” said Dennis Bookshester, acting chief executive officer of Fruit of the Loom Ltd. "We are confident that restructuring our operations and capital structure will enable Fruit of the Loom to emerge as a stronger company in the competitive basic apparel industry, and continue to build our reputation for producing quality apparel.”
Fruit of the Loom’s shares have sunk over the last three years
Fruit of the Loom (FTL), maker of BVD, Gitano, Fruit of the Loom and other brands, has had trouble shipping merchandise to customers on time.
The company makes about 32 percent of all men’s and boys' and 15 percent of all women’s and girls' underwear sold in the United States, according to Hoovers.
The company said the filing should have little impact on customers and employees. In 1998, Fruit of the Loom had about 31,000 workers and $2.17 billion in sales.
Last month, the company posted a third quarter net loss of $166.4 million, or $2.49 per share, compared to a profit of $50.4 million, or 70 cents per share, a year ago.
The company overhauled its management team in August and several credit agencies cut their ratings, citing the possibility of a bankruptcy filing. The move dramatically reduced the power of William Farley, the company’s charismatic chairman, stripping him of the titles of CEO, president and chief operating officer.
Farley took the company private in 1985 for $1.4 billion. He later took the company public. 
---from staff and wire reports
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