8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 30, 2003

PILLOWTEX CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-49835	75-2147728
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One Lake Circle Drive Kannapolis, North Carolina	28081
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 704-939-2000

(Former Name or Former Address, if Changed Since Last Report)

Item 3. Bankruptcy or Receivership.

On July 30, 2003, Pillowtex Corporation, a Delaware corporation (the “Company”), and all of its domestic subsidiaries filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On August 1, 2003, the Bankruptcy Court entered an interim order authorizing the Company to enter into an agreement with its revolving credit facility lenders, which agreement amends, in certain respects, its existing revolving credit facility and allows the Company to continue to borrow money under its revolving credit facility to fund its expenses during the bankruptcy process. A final hearing to approve the agreement is scheduled for August 20, 2003. The Bankruptcy Court also approved the payment of certain pre-petition obligations, including employee salaries and wages and obligations to customers.

A copy of the press release issued by the Company on July 30, 2003, announcing its filing with the Bankruptcy Court is attached hereto as Exhibit 99.1 and incorporated herein by reference.

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Item 5. Other Events and Regulation FD Disclosure.

In connection with its bankruptcy filing, the Company closed substantially all of its operations at its textile manufacturing and distribution facilities and terminated approximately 6,450 salaried and hourly positions. A copy of the press release issued by the Company on July 30, 2003, announcing the plant closings and employee terminations is attached hereto as Exhibit 99.2 and incorporated herein by reference.

In addition, in connection with its bankruptcy filing, the Company announced that it had signed a definitive agreement with GGST, LLC for the sale of substantially all of its plants, equipment and brands, subject to Bankruptcy Court approval under Section 363 of the Bankruptcy Code. Reference is hereby made to the Company’s press release attached hereto as Exhibit 99.1 for additional information regarding the agreement with GGST.

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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(a) Financial Statements of Businesses Acquired:

Not Applicable.

(b) Pro Forma Financial Information:

Not Applicable.

(c) Exhibits:

Exhibit No.	Description
99.1	Pillowtex Corporation Press Release, dated July 30, 2003
99.2	Pillowtex Corporation Press Release, dated July 30, 2003

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this current report to be signed on its behalf by the undersigned hereunto duly authorized.

PILLOWTEX CORPORATION
By:	/s/  John F. Sterling
	Name:  John F. Sterling
	Title:  Vice President and General Counsel

Date: August 11, 2003

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Pillowtex Corporation Press Release, dated July 30, 2003
99.2	Pillowtex Corporation Press Release, dated July 30, 2003

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EX-99.1

EXHIBIT 99.1

[PILLOWTEX LOGO]

FOR IMMEDIATE RELEASE

July 30, 2003

Contacts:

Media: Karen Cobb, Communications Manager

                (704) 939-2775

Investor Relations: Hank Pollock, Vice President and Treasurer

                (704) 939-2976

Pillowtex Files Chapter 11 Bankruptcy Petition

~ Pillowtex reaches definitive agreement with GGST, LLC for sale of company assets ~

KANNAPOLIS, N.C. – July 30, 2003 – Pillowtex Corporation (OTC: PWTX) announced today that it filed a voluntary petition in the U.S. Bankruptcy Court in Wilmington, Del., seeking relief under Chapter 11 of the U.S. Bankruptcy Code.

In addition, Pillowtex announced it has signed a definitive agreement with GGST, LLC for the sale of substantially all of its plants, equipment and brands subject to court approval under Section 363 of the Bankruptcy Code. As required under Section 363 of the Code, Pillowtex Corporation filed a motion to establish bidding procedures allowing groups in addition to GGST, LLC to submit offers for its assets.

As detailed in the bankruptcy filing, Pillowtex will continue to own its assets as a “debtor in possession.” During the bidding process, the Company will not operate its manufacturing facilities and will utilize available inventory to service its existing customer business. The Company will conduct going-out-of-business sales at its Fieldcrest Cannon Stores. The Company’s advisors estimate that the bidding period will last approximately 45 days during which time any competing offers for the Company’s assets will be reviewed by the Board of Directors and Company management. If no acceptable offers are received prior to the expiration of the bidding period, upon order of the Bankruptcy Court, GGST, LLC will assume ownership of substantially all of Pillowtex’s plants, equipment and brands.

In an announcement on July 30, 2003, the Company stated that it had closed substantially all of its operations and terminated its workforce of approximately 6,450 employees. A staff of approximately 1,200 employees has been initially retained to assist with bankruptcy proceedings, shipping and warehousing needs, accounting and human resources issues. Plans are being finalized with numerous local, state and federal officials to help provide emergency work assistance, claims filing and job re-training for affected employees.

As a routine matter, Pillowtex presented the Bankruptcy Court with a series of “first day motions” that the Company has asked the Court to approve in its first-day hearing. The Company has received a commitment from the lenders under its revolving credit agreement to continue to loan the Company money under its existing credit facility. The financing, which is subject to approval by the Court, will be used to fund the Company’s expenses during the bankruptcy process.

About Pillowtex

Pillowtex Corporation, headquartered in Kannapolis, N.C., is a leading designer, marketer and producer of home fashion products including towels, sheets, rugs, blankets, pillows, mattress pads, feather beds, comforters and decorative bedroom and bath accessories. The Company markets products under its own brand names including Cannon^®, Fieldcrest^®, Royal Velvet^® and Charisma^®. The Company also designs and manufactures private-label home textile products for leading retailers. Pillowtex operated manufacturing and distribution facilities in the U.S. and Canada and employed approximately 7,650 people.

About GGST, LLC

GGST, LLC is a company formed by SB Capital Group, Gibbs International, Gordon Brothers Retail Partners and Tiger Capital Group. Inquiries regarding the disposition of assets may be directed to Steve Luquire and John Deem at Luquire, George, Andrews, Inc. (704) 552-6565. Group 3 Design, a leading brand management firm, has been retained to manage the branded licensing activities of the acquired brands. Inquiries regarding the brands may be directed to mgleason@groupthree.com.

Forward-Looking Statements

Certain statements contained in this press release are forward looking in nature. Factors that could cause actual results to differ from the forward-looking information containing in this press release include, but are not limited to, the significant challenges faced in connection with the Company’s bankruptcy proceedings. Other such factors are discussed in greater detail under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2003.

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EX-99.2

EXHIBIT 99.2

[PILLOWTEX LOGO]

FOR IMMEDIATE RELEASE

July 30, 2003

Contacts:

Investor Relations: Hank Pollock, Vice President, Treasurer

                (704) 939-2976

Media: Karen Cobb, Communications Manager

                (704) 939-2775

PILLOWTEX ANNOUNCES EMPLOYEE TERMINATIONS AND PLANT CLOSINGS

Company Intends To File Chapter 11 Bankruptcy

KANNAPOLIS, N.C. – July 30, 2003 – Citing a severe liquidity crisis, Pillowtex Corporation (OTC: PWTX) announced today that it has closed its 16 textile manufacturing and distribution facilities and is terminating approximately 6,450 salaried and hourly positions. The Company does not have cash available to continue operating the business.

Separately, the Company announced it intends to file as soon as practicable a voluntary petition in the U.S. Bankruptcy Court in Wilmington, Del., under Chapter 11 of the U.S. Bankruptcy Code. Following the filing of the bankruptcy petition with the Court, Pillowtex will proceed with the orderly wind down of its business and disposition of its assets.

The Company will initially retain a staff of approximately 1,200 employees in distribution, support services, accounting and human resources to assist with the bankruptcy proceedings and employee communications. Company management formally notified its employees today of its decisions.

Michael Gannaway, chairman and chief executive officer of Pillowtex, said, “Since emerging from bankruptcy in May 2002, we have worked diligently to attempt to restructure our operations and regain profitability. We conducted a thorough review of multiple strategic options, but have exhausted that process and are facing a liquidity

crisis that now forces us to cease operations.”

“Due to soft consumer demand, the intensity of foreign competition, industry over-capacity and downward pricing pressure in all of our categories, the Company simply cannot operate profitably in the current environment and with our current business model,” Gannaway continued.

“In response to market conditions we announced in March of this year that we retained Credit Suisse First Boston to help us explore our strategic alternatives. We explored various long-range plans focused on preserving Pillowtex as a stand-alone entity by building branded sales and global sourcing capabilities. However, the costs of making the necessary changes to our business model in order to make the transition were insurmountable and we were not successful in securing the substantial investments needed to change our business model in order to preserve Pillowtex as a stand-alone entity. We also tried to arrange for a sale of our business to a more financially stable company that could keep some of our employees working, but no definitive agreements could be reached. Facing these very difficult circumstances, closing our facilities and preparing for bankruptcy has emerged as our only viable course of action.”

The Company has contacted state and federal Departments of Labor and local human service agencies to help facilitate a schedule for helping displaced workers.

Don Mallo, vice president of human resources for Pillowtex, said, “We have been in contact with numerous local, state, and federal officials. We are hopeful that the attention we received to date is indicative of the support our employees will receive by way of emergency worker assistance. We are currently preparing for meetings between our employees and state labor department officials who can provide direct access to claims filing, information about possible job opportunities, job retraining and other unemployment benefits.”

“We are providing written information to all employees, posting important human resources information on our Web site and have established a toll-free hotline for employees to call and hear current information about benefits and resources available to them and their families. We deeply regret that our only course of action involved the loss of jobs. We are doing everything within our ability to help prepare our employees and the communities in which we operate for these changes,” concluded Mallo.

The Pillowtex Web site is http://www.pillowtex.com. The toll-free Pillowtex Employee Information line is 1-800-476-5021.

The Union of Needletrades, Industrial and Textile Employees (UNITE); the Teamsters Union and United Auto Workers Union represent Pillowtex hourly workers at the affected facilities.

About Pillowtex

Pillowtex Corporation, headquartered in Kannapolis, N.C., is a leading designer, marketer and producer of home fashion products including towels, sheets, rugs, blankets, pillows, mattress pads, feather beds, comforters and decorative bedroom and bath accessories. The Company markets products under its own brand names including Cannon^®, Fieldcrest^®, Royal Velvet^® and Charisma^®. The Company also designs and manufactures private-label home textile products for leading retailers. Pillowtex operated manufacturing and distribution facilities in the U.S. and Canada and employed approximately 7,650 people.

Forward-Looking Statements

Certain statements contained in this press release are forward-looking in nature. Factors that could cause actual results to differ from the forward-looking information contained in this press release include, but are not limited to, the results of the review of the Company’s financial statements; the economic performance, financial condition and prospects of the Company, which are, in turn, affected by general retail industry conditions; competition; the Company’s leverage; the price and availability of raw materials; reliance on key suppliers and vendors; dependence on specific brand names; risk of loss of material customers, labor relations and seasonality of the business. These factors and other factors are discussed in greater detail under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2003.

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