Royal Velvet label to be made in China
Publication Salisbury Post
Date January 09, 2004
Section(s) Area
Page 0
Byline Scott Jenkins
Brief Royal Velvet label to be made in China

By Scott Jenkins, Salisbury Post

By Scott Jenkins, Salisbury Post

KANNAPOLIS -- A label that Rowan County textile workers used to sew into sheets will now be stitched on in China, a Hong Kong firm said this week.

Li & Fung Ltd. announced that it will finalize a deal by the end of January to make and distribute goods under the name Royal Velvet, a former Pillowtex Corp. brand.

The global exporter said in a press release that it will license the Royal Velvet brand from its new owner, GGST LLC, which paid $121 million for most of Pillowtex's assets, including well-known labels like Cannon and Fieldcrest.

The company will design and manufacture products with the Royal Velvet label in mainland China and distribute them worldwide, said William Fung, the company's managing director.

Licensed home textile and home decor products will begin showing up in stores this fall, the company said.

Li & Fung did not identify the stores that will sell the new Royal Velvet merchandise, but Fung said the company has "well-established relationships with many leading retailers globally that fit into the positioning of the Royal Velvet brand. We see good prospects ahead for this new line of business."

Industry observers expect GGST, a consortium of liquidation companies put together for the express purpose of buying Pillowtex assets, to hold on to all the valuable brand names and collect licensing fees for them.

GGST hired marketing firm Group 3 Designs to handle the licensing arrangements. Group 3 President Mary Gleason said in the press release that Li & Fung is one of few companies with worldwide sourcing and distribution capabilities.

"We are pleased to have Li & Fung as our partner to capitalize on the potential of the Royal Velvet brand," she said.

Royal Velvet was one of Pillowtex's higher-end labels. Its Martinsville, Va., plant made Royal Velvet towels, while Plant 16 in China Grove made sheets under that name.

The Kannapolis company closed in July, eliminating 7,650 jobs at its U.S. and Canadian facilities, including more than 4,300 in Rowan and Cabarrus counties.

Pillowtex officials said the company closed, in part, because it couldn't compete with less expensive foreign imports.

Contact Scott Jenkins at 704-797-4248 or sjenkins@salisburypost.com.