The Fruit of the Loom Group has over 60 manufacturing and distribution plants around the world and generated sales of $2.4 billion (£1.7 billion) and profits after tax of $151 million for 1996.
But the group which has 36,000 employees, including 22,000 in the US and 3,500 in Ireland, has seen profits fall as competition intensified in casual clothing markets.
Fruit of the Loom products include printable T-shirts, casualwear, sportswear, infant and children's wear and underwear. Brand names manufactured by the group include Gitano, BVD, BEST, Cumberland Bay, Screen Stars and Lofteez as well as Fruit of the Loom. It manufactures a number of brands under licence arrangements including Wilson, Minsingwear, Botany and John Henry. The group markets licensed apparel bearing the logos of major sports leagues and colleges and universities under the Pro Player, Salem and Official Fan brands.
In the US, Fruit of the Loom has operations in Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, New Hampshire and Texas. Last week the group announced that it was eliminating 1,480 sewing and garment assembly jobs at its Kentucky plant.
In addition to its operations in Donegal and Derry, its international plants are located in Canada, Mexico, Central America, Puerto Rico, Jamaica, England, Germany and Morocco.
The most recent results released by the group were for the six months to end June. Sales for the period were $1.14 billion, down from $1.24 billion with profits after tax down to $44 million from $60 million. The group blamed excessive inventory (stocks of unsold products) levels and widespread promotional activity in highly competitive wholesale markets for the fall in profits.
President and chief operating officer Mr Richard Lappin said: "The wholesale activewear market was more promotional and price sensitive in the quarter (second) than we had anticipated. This resulted in a build-up of inventory as wholesalers took advantage of discounting opportunities. Consequently, we didn't get the volume of business or the pricing we had hoped for."
Stating that the group was disappointed with the results, Mr Lappin said that "all efforts are continuing in the retail and wholesale activewear markets to drive revenue growth, reduce costs and improve profitability. Although second-half results may continue to show the effect of competitive pricing and promotional activity, the company is in a position for improved operating performance in 1998".
In its interim results statement, the group said one of the potential risks to future performance results would be its ability to successfully move labour-intensive segments of the manufacturing "offshore". In the past five years, the group has moved some jobs out of the US to lower-cost locations in Mexico, the Caribbean and Central America.
Fruit of the Loom has its headquarters in Chicago, in the landmark Sears Tower. The group chairman and chief executive is Mr Bill Farley.
