Kent Inc. owners optimistic about funding package

FORT KENT – Guarded optimism seemed to be the key words Friday about Kent Inc. and its financial problems, nearly four weeks after the company announced that it might close.

“All avenues are being pursued as we speak,” Duane Walton, director of business finance at the Northern Maine Development Commission, said during a Thursday night commission meeting. “The Washington delegation is working to find money that can be earmarked to help the company.

“Our problem right now is that there is little or no legislation being submitted in Washington,” he said. “There is only talk of war.”

Company owners Michael Gans of New York City and Mark Coburn of Greenville, S.C., told their employees on Sept. 17 of the company’s financial problems and the possibility of the plant closing in mid-November.

Within days of the news, a two-hour summit of company officials, government officials, local leaders and state and federal legislators was held and a package hammered out.

The wheels of government and finance move slowly, but they seem to be moving to help the company where 175 St. John Valley men and women are employed.

Walton said some private investors also have taken a look at the company, but nothing definite has happened on that front.

“The problem at this point is that there is nothing final,” Walton said after the NMDC board of directors meeting at Caribou. “The company is under some deadlines.”

The Fort Kent area, which includes Allagash to Frenchville and St. Agatha, possibly could lose a $2.5 million a year payroll.

According to figures released last month, the company, in operation since 1996, needs new investments of $2 million and a $2 million credit line to recapitalize.

“Nothing negative has happened since the announcement,” Michael Gans, Kent Inc. president and CEO, said Friday. “We are guardedly optimistic, and we may have something to announce next week.”

The package developed at the University of Maine at Fort Kent summit on Sept. 20 included a $1 million commitment from the Northern Maine Development Commission through the Aroostook County Empowerment Zone, and an additional $200,000 from the Maine Department of Economic and Community Development’s Community Development Block Grant Program.

That would leave Kent Inc. to find $800,000 from private investors to reach the $2 million in equity the company needs. The new equity will allow the company to get another $2 million in loans from lending institutions to keep the children’s sleepwear manufacturer open and to make it profitable.

Gans has said the company was “inadequately capitalized” from the outset in 1997.

Two things have hurt Kent Inc.: a three-year, noncompetitive clause with the former owners of the company, Gerber Childrenswear, during which Kent Inc. could not manufacture blanket sleepers; and the removal by the federal government of a flame-retardant clause in the manufacture of children’s wear in 2000.

When flame-retardant materials had to be used, he said, foreign imports were not a problem. Now, he said, his company cannot compete with foreign labor.

A business plan for 2003 would see Kent Inc. manufacture solely blanket sleepers, guaranteeing 150 jobs at Fort Kent.

The problem with blanket sleepers, he said, is that they are manufactured over a 12-month period and shipped to customers during a four-month period.

Kent Inc. has had a 40-year history in Fort Kent through several company names. The latest group, headed by Gans and Coburn, resurrected the company after its former owner, Gerber Childrenswear, decided to close the plant in 1996 and move its operation to Texas.

Many government agencies at various levels, from the town of Fort Kent to Washington, D.C., assisted in the rebirth with loans and grants. The plant reopened in 1997.