EXHIBIT 99.1

                              [LOGO APPEARS HERE]



                                                      News Release

FOR IMMEDIATE RELEASE
August 23, 2001


Contact: Steve Lambert
               (704) 939-4542


               Pillowtex Receives Bankruptcy Court Approval For
               ------------------------------------------------
                           Sale of Blanket Division
                           ------------------------

KANNAPOLIS, NC (August 23, 2001) - Pillowtex Corporation announced it has
received U.S. Bankruptcy Court approval necessary to complete the sale of its
blanket division, Beacon Manufacturing Company to Beacon Acquisition
Corporation, an investment group comprised of current managers and a private
investor.


         The sale of the blanket division includes two Beacon Manufacturing
plants - an acrylic blanket manufacturing plant in Swannanoa and a cotton
blanket manufacturing plant located in Westminster, S.C. A distribution facility
in Mauldin, S.C. will be leased from Pillowtex. Approximately 700 people are
employed at the three Beacon facilities. Beacon designs, manufactures and
markets blankets.


         Pillowtex President Tony Williams said, "We are pleased with the
court's approval of the sale and will move forward with plans to close the deal
in September. This is truly a win-win situation that will help us to reduce our
debt while at the same time, preserve the jobs of those working at the Beacon
facilities."


         Pillowtex Corporation, with corporate offices in Kannapolis, N.C., is
one of America's leading producers of household textiles including towels,
sheets, rugs, pillows, mattress pads, feather beds, comforters and decorative
bedroom and bath accessories. Pillowtex employs approximately 11,500 persons at
its facilities in the United States and Canada. The Company's brands include
Cannon, Fieldcrest, Royal Velvet, Charisma, and private labels. The Company
filed a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code on November 14, 2000.



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