Kayser-Roth goes down Mexico way.

Kayser-Roth Corp.'s 3,200 employees - including 220 at its Greensboro headquarters - have their pantyhose in a wad. They survived a bruising round of layoffs late last year, followed by the unexpected resignation of President Martin Ricoy in February. Now they're waiting for the other sock to drop - the possible sale of the money-losing hosiery manufacturer for the second time in three years.

The Mexican hosiery giant that bought Kayser-Roth in 1994 didn't foresee the casual shift in American fashion that has shrunk the pantyhose market. But that's a mild blunder given that Synkro S.A. de C.V. is falling apart at the seams. Socked by the 1994 peso devaluation and subsequent recession, Synkro defaulted on $347 million in debt. Its problems are so severe that the Mexican government has stepped in to reorganize it and will probably wind up with a majority share.

"We assume that the Mexican government is not going to be in the hosiery business long term," says Jerry Perlmutter, Kayser-Roth's vice president and general counsel. "We think at some point it will try to reprivatize Synkro."

So who might buy its largest subsidiary, which had $300 million in revenue last year? Winston-Salem-based Sara Lee...