Pictured is a detail of one of the spools, or packages, of thread in the creeling area of the Dixie Group plant in Eton, Georgia.The Dixie Group is dropping one of its high-end woven carpet lines it acquired last year and will cut 14 jobs at its Calhoun, Ga., wool plant next year.
The Chattanooga-based carpet maker said today it is discontinuing its money-losing Carousel custom manufacturing line of products and will likely shut the brand down next spring after filling existing orders. Dixie is taking more than $1.5 million in charge-offs against its fourth quarter earnings for discontinued equipment, trade name and customer relationships from the move and expects to incur after-tax discontinued operating expenses of approximately $190,000 next year, including severance and other disposal expenses.
Dixie acquired the Carousel line last year through its purchase of Robertex Associates Inc. Dixie is continuing the Robertex line, but Dixie Chief Financial Officer Jon Faulkner said the company concluded it no longer made sense to invest in the Carousel brand due to the costs of production and stiff competition from other brands and production technologies.
The carousel line generated pre-tax operating losses of over $600,000 in the past year, or about 3 cents per share, on sales of about $866,000, Dixie said.
The workers being displaced by the move are expected to be laid off after Dixie completes all customer orders by the end of the second quarter of 2015.