Pluma ravels by not sticking to knitting.

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Foreign competition has left most textile makers strapped -- financially, that is -- tighter than an overweight redneck in Wranglers. But despite logging quarter after disappointing quarter, the state's heavyweights such as Unifi Inc. and Burlington Industries Inc. have stayed afloat by moving jobs and axing unprofitable lines.

It's a different story for Pluma Inc., the Eden-based fleece and sportswear maker, which closed in September after 13 years in business. Not only bad conditions but bad decisions helped sink the once-plucky company.

Pluma went public in March 1997. It had a premium product for which it got a premium price -- custom apparel for big brands such as Nike. That December, it bought two wholesale distributors, Verona, Wisc.-based Stardust Inc. and Los Angeles-based Frank L. Robinson Co. "They went from high-value-added, high-margin down to where it's dog eat dog," notes Wachovia Securities Inc. analyst Kay Norwood. "The market is cutthroat, and prices are going down 20% a year."

The transition meant Pluma was competing with customers. Net income dropped from $2 million in '97 -- the company had been profitable since 1986 -- to a $36 million loss in '98. Its stock, which peaked at $15.75 in mid-'97 was trading at about $1 a share when the board removed CEO R. Duke Ferrell Jr. in February.

Pluma shut four of its...