Exhibit 99.1
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         [LOGO OF PILLOWTEX CORPORATION]

         FOR IMMEDIATE RELEASE

         Contact: Karen Cobb, Communications Manager
         (704) 939 - 2775

    Pillowtex Corporation Files Reorganization Plan and Disclosure Statement
                   __________________________________________

KANNAPOLIS, N.C. - January 2, 2002 - On December 28, 2001, Pillowtex Corporation
and its United States subsidiaries filed their joint Plan of Reorganization
("Plan") and Disclosure Statement with the U.S. Bankruptcy Court in the District
of Delaware outlining the Company's plans to emerge from Chapter 11. Pillowtex
filed a voluntary petition for reorganization on November 14, 2000.

     "The filing of our Plan of Reorganization represents a significant step
toward successfully reorganizing our Company and is an important milestone in
our financial restructuring," said Pillowtex President Tony Williams. "We are
confident that the reorganization structure and program outlined in the Plan
lays a strong foundation for our Company's future success."



     The Plan and Disclosure Statement outline the proposed structure and
business operations for the reorganized company, including reincorporating the
parent company, Pillowtex Corporation, as a Delaware corporation. Under the
proposed Plan, all shares of Pillowtex's currently issued Common Stock and
Preferred Stock will be cancelled with current shareholders receiving no
distribution. The Plan provides that the reorganized Company will issue new
Common Stock to its secured creditors and a combination of new Common Stock and
warrants to its unsecured creditors. In addition, the Plan as filed provides
that the Company will emerge with approximately $200 million of debt,
significantly less than the more than $1.1 billion of debt the Company had prior
to its bankruptcy filing.

     "Our strategy going forward is to improve our position in the highly
competitive industry of home fashions," Williams said. "Our business plan
focuses on four broad initiatives - branding and marketing, capacity
rationalization, strategic sourcing and total quality management. Our objective
is to be the undisputed leader in customer service."

     Part of the process Pillowtex undertook during its reorganization was to
examine how it operates and to initiate changes designed to improve processes,
improve the bottom line and enhance customer service. "Pillowtex employees
across the country have performed for months under challenging circumstances,"
Williams said. "We are very pleased that our employees not only recognize the



need for change if we are to achieve long term success, but have embraced the
changes we have instituted and will continue to introduce in how we do
business."

     Before the Plan can be presented to certain classes of the Company's
creditors for acceptance, the Bankruptcy Court must determine whether the
Disclosure Statement contains adequate information, as required by the
Bankruptcy Code. "The proposed Plan, if confirmed by the Court, is intended to
maximize the value of the Company's assets for the benefit of our creditors and
position the new, restructured company to emerge in a stronger financial
condition," Williams said. "The filing of the Plan is another step in our
reorganization to enhance our ability to meet the needs of our customers and
deliver high quality products and services, both now and in the future."

     The Company also filed a Form 8-K with the U.S Securities and Exchange
Commission on December 28, 2001. Copies of the Plan and the Disclosure Statement
are exhibits to the Form 8-K and will be available on the Company's Web site at
www.pillowtex.com.
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About Pillowtex

     Pillowtex Corporation, with corporate offices in Kannapolis, N.C., is one
of America's leading producers of household textiles including towels, sheets,
rugs, pillows, mattress pads, feather beds, comforters, and decorative bedroom
and bath



accessories. The Company's brands include Cannon(R), Fieldcrest(R), Royal
Velvet(R), Charisma(R) and private labels.

Cautionary Statement Regarding Forward-Looking Statements

     This press release contains certain forward-looking statements. Such
statements are based upon the beliefs and assumptions of, and on information
available to, the Company's management. Because such forward-looking statements
are subject to various risks and uncertainties, results may differ materially
from those expressed in or implied by such statements. Many of the factors that
will determine these results are beyond the Company's ability to control or
predict, including uncertainty concerning the extent and outcome of challenges
to the proposed Plan, the timing and substance of court rulings with respect to
the Plan, the extent to which the Company is successful in implementing its
business plan and general economic and competitive conditions. For a further
discussion of such factors and the risks associated therewith, see the Company's
filings with the Securities and Exchange Commission, including, without
limitation, the Company's annual report on Form 10-K for its fiscal year ended
December 30, 2000.