Pyke Manufacturing Co., 1367 S. 700 West, a 97-year-old women's apparel manufacturer, has emerged from reorganization bankruptcy. Apparently, many of the company's debts have been paid in the four months since the petition was filed in U.S. District Court in December.
Because of pressure from foreign manufacturers of women's apparel, Pyke filed a petition for reorganization. Its plan has been accepted by Federal Bankruptcy Judge John H. Allen.The plan provides for the payment in full of all allowed creditors' claims. The company said it held or will receive adequate cash from the sale of assets to fund the plan, said Ernest D. Mariani, chief executive officer.
Mariani said small boutiques and apparel stores that purchased Pyke clothes have been replaced by chains like Wal-Mart, making it difficult for his company to compete.
The company's board of directors will meet in the next two weeks to determine what direction the business will take, but Mariani said he doubts it it will be in the clothing business.
Mariani said the bankruptcy case was unusual because $400,000 in debts was paid in full within four months of the filing. More importantly, said Mariani, was that dedicated employees helped facilitate disposing of assets to protect certain jobs. Last December, Pyke had 400 employees. Today, there are 25.
Many of the employees had worked for the company for many years, Mariani said, and termed the employee layoff one of the most difficult things he has ever done.
Mariani said free-trade agreements and subsidies in foreign countries have gradually eroded the manufacturing base in the United States and the apparel industry is a "thing of the past." He said another factor is that the way people are dressing has changed: people don't wear Pyke's coordinated outfits anymore but prefer a pair of jeans and a T-shirt.