Calculated Gamble

When Burlington Mills Corp. (Bur-Mil), largest U.S. weaver of rayon goods, slashed its prices 10% to 25% a fortnight ago, its 52-year-old Chairman J. (for James) Spencer Love made a calculated gamble. He was betting that the price of rayon fiber, which Burlington has to buy to weave its fabrics, would soon come down enough to make up the difference.

Last week it came down. The Celanese Corp. of America, third biggest U.S. yarn producer, trimmed its prices of rayon (acetate staple fiber) by 12.5% to 42¢ a lb., lowest in its history. As other producers, weavers, converters and jobbers...

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