Culp Inc. Announces Investments and Enhancements to Global Cut and Sew Mattress Cover Platform
Updates Expectations for Third Quarter Fiscal 2021
HIGH POINT, N.C.–(BUSINESS WIRE)–Feb. 2, 2021– Culp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP”) today announced that, in response to the growing demand for sewn mattress covers and transforming market dynamics, the company has made strategic investments and enhancements to its global cut and sew mattress cover platform. CULP has reached an agreement to purchase the remaining fifty percent ownership interest in its unconsolidated joint venture, which produces cut and sew mattress covers in Haiti. Pursuant to this transaction, CULP will now be the sole owner with full control over the Haiti operations. The company has also entered into a supply agreement with its previous joint venture partner.
CULP commenced production in Haiti during the second quarter of fiscal 2018, with a reactive platform that complements the company’s mattress fabrics business with a near-sourced, competitive cost operation. Since the initial 80,000 square foot facility was established, CULP has made investments in additional facilities, recently adding another 40,000 square feet for additional capacity to produce and distribute sewn mattress covers.
Commenting on the announcement, Sandy Brown, president of Culp Home Fashions, the company’s mattress fabrics division, stated, “We are excited to gain full ownership of the Haiti operation, which furthers our ability to effectively manage our global cut and sew platform. With our recent investments in Haiti, we have expanded our capacity and improved our ability to meet growing customer demand. We continue to see favorable growth trends in our sewn mattress cover business, with current and expected demand exceeding pre-COVID-19 levels. This demand is primarily driven by the ongoing growth in the boxed bedding space, and we continue to work collaboratively with new and existing customers to develop fresh, innovative products. Through our production and sourcing capabilities in the U.S., Asia, and Haiti, we have a flexible, scalable global platform that provides us with a strong competitive advantage. Additionally, our recent investments in our digital and IT competencies support our front-end design capabilities and speed to market from fabric to cover. Above all, we are focused on product innovation and creative designs, backed by exceptional service, and we look forward to the global opportunities ahead for CULP’s mattress fabrics and sewn covers.”
Iv Culp, president and chief executive officer of Culp, Inc., added, “We are very pleased with our Haiti operation, which has proven to be an ideal location for our growing sewn mattress cover business. Through our strategic investments, we have demonstrated our ability to improve our operating efficiencies, and we believe there are additional opportunities within CULP to leverage the production capacity and distribution capabilities from Haiti.
“We are also updating our financial outlook for the third quarter of fiscal 2021. Our business during the quarter has been better than expected in both divisions, and we are especially pleased with the performance of our upholstery fabrics division against previous expectations. As a result, we are now projecting meaningfully improved sales and operating income for both divisions for the quarter, as compared to the third quarter of last year.”
The company expects to report its complete financial and operating results for the third quarter of fiscal 2021 in early March.
Culp, Inc. is one of the world’s largest marketers of mattress fabrics for bedding and upholstery fabrics for residential and commercial furniture. The company markets a variety of fabrics to its global customer base of leading bedding and furniture companies, including fabrics produced at Culp’s manufacturing facilities and fabrics sourced through other suppliers. Culp has operations located in the United States, Canada, China and Haiti.