SecProbe.io

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March 22, 2005

United States Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, D.C.  20549
Attn:  James Allegretto

RE:      Delta Woodside Industries, Inc.
         Form 10-K for the year ended July 3, 2004
         Form 10-Q for the quarter ended October 2, 2004
         File No. 1-10095

Ladies and Gentlemen:

     Reference is made to the comment to the Form 10-K for the fiscal year ended
July 3, 2004 received from the Staff of the Securities and Exchange Commission
in a letter from Mike Moran, dated March 8, 2005 (the "Comment Letter"). The
Company's response to the Staff's comment is as follows (with the comment
reproduced for ease of reference):

                    FORM 10-K FOR THE YEAR ENDED JULY 3, 2004

Note G - Commitments and Contingencies

1.        We note your response to prior comment 11. Please tell us how you
          account for the IDR bonds in the sale leaseback exchange, the bond
          amounts and the amounts of any items they offset. Also advise us of
          your basis for presuming that a legal right to offset exists. Include
          references to applicable accounting pronouncements to support your
          conclusions. Then tell us how you accounted for the sale and leaseback
          for each of the properties specifically as it relates to whether you
          have consummated each sale, the buyer's initial and continuing
          investments, your continuing involvement in the properties and the
          method for your recognition of profits, if applicable. Refer to SFAS's
          No. 66 and 98.

         RESPONSE:

         Note that the Fee in Lieu of Taxes (FILOT) arrangement is simply a
         transaction structured to have the taxing authority "own" the assets
         (real estate and equipment), so the Company can pay a fee in lieu of
         property taxes. However, the transaction has no substance in
         accounting.

         In the FILOT transaction, the Company's subsidiary, Delta Mills,
         transferred fee simple title to its South Carolina manufacturing
         facilities to three South Carolina counties (the "Counties"). The
         Counties issued an IDR bond (the "Bond") to the Company in the
         principal amount of $200 million "or so much thereof as has been
         advanced hereunder from time to time." The Company subsequently
         transferred the Bond to Delta Mills. The Counties leased the properties
         back to Delta Mills. The Company did not remove the properties from its
         balance sheet, nor did it receive cash or other assets creating a gain
         on the transaction. The Company recorded an asset (Investment in IDR
         bonds) and a liability (Long-Term Lease Obligation); however, the two
         offset and are not shown on the face of the balance sheet. The Bond and
         the lease are structured so that Delta Mills' lease payments to the
         Counties automatically equal the Counties' bond payments to Delta
         Mills. The bond by its terms does not specify a dollar amount for
         principal and interest payments but rather specifies that payments
         shall come solely from the revenues and receipts the Counties derive
         from the lease. Similarly, the lease does not specify a dollar amount
         for rent payments but rather specifies that rent shall be paid in such
         amounts and at such times as is necessary to pay the principal and
         interest, when due, on the Bond. The lease also provides that if Delta
         Mills holds the Bond, it shall offset its obligation to pay rent
         against its right to receive Bond payments. The Bond indenture contains
         a similar offset provision. The term of the lease is the same as the
         term of the Bond (which in both documents is twenty years from the date
         of the last advance under the Bond). The Bond is non-recourse to the
         Counties, so the only source of payment to Delta Mills of the Bond is
         the rent payments Delta Mills makes under the lease. The Counties also
         pledged all revenues under the lease (except for payments of certain
         administrative expenses, payments in lieu of taxes and certain
         indemnification payments, if any) as security for performance of their
         obligations under the Bond.

         Delta Mills continues to operate and control the properties subject to
         the FILOT as it did prior to its entry into the FILOT arrangement. The
         lease prohibits the Counties from transferring title to the properties
         to any third party. Delta Mills has an option to purchase some or all
         of the subject property at any time for an effective net price of one
         dollar. The total purchase price is an amount equal to one dollar plus
         the pro rata portion of outstanding principal and accrued and unpaid
         interest on the Bond and unpaid additional rent, if any, attributable
         to the portion of the property purchased; however, since all payments
         under the Bond are payable directly to Delta Mills, the net effect of
         Delta Mills' exercise of its purchase option is to retire the portion
         of the Bond attributable to the property purchased by making a net
         payment to the Counties of the single dollar. If Delta Mills elects to
         reacquire the property subject to the arrangement, it may also be
         required to make certain adjusting real property tax payments.

         SFAS No. 98 specifies the accounting by a seller-lessee for a
         sale-leaseback transaction involving real estate, including real estate
         with equipment. This statement provides that:

                  A sale-leaseback transaction must qualify as a sale under FASB
                  Statement No. 66 before it is appropriate for the
                  seller-lessee to account for the transaction as a sale. If the
                  transaction does not qualify as a sale under Statement 66, it
                  should be accounted for by the deposit method or as a
                  financing.

                  A sale-leaseback transaction that includes any continuing
                  involvement other than a normal leaseback in which the
                  seller-lessee intends to actively use the property during the
                  lease should be accounted for by the deposit method or as a
                  financing.

         Under the FILOT program, ultimate ownership of the production
         facilities is not intended to remain with the Counties involved in the
         transaction. The bargain purchase option for $1 at any point in the
         lease term, the fact that under the terms of the lease the Company
         must, at its own expense, maintain the equipment and facility, the fact
         that no county is required to rebuild or make repairs or to make any
         expenditure whatsoever in connection with the lease or to maintain the
         facilities in any way, all support the conclusion that the Company has
         a significant continuing involvement in the facilities. In addition, no
         County can transfer title to the facilities to any third party and, if
         there is no default under the lease, the Company can, in its
         discretion, determine that items of lease equipment have become
         inadequate, obsolete, undesirable or unnecessary for operations and may
         remove such items, sell, trade-in, exchange or otherwise dispose of
         them without consent of any county. All of these factors indicate that
         these sale-leaseback transactions do not qualify as sales under SFAS
         No. 66 and should be classified as financing transactions. Accordingly,
         the Company did not recognize a sale for any of the properties involved
         in the FILOT transactions and no profits have been recognized relating
         to these transactions. All of the facilities are still recorded on our
         books and we continue to depreciate them.

         As far as the financing aspect of these transactions, no debt has been
         recorded because the Company, from the inception of the transactions
         has been the registered owner of the bonds. Under the terms of the
         lease agreement with the respective counties, (Section 5.02 of the
         agreement), "if the Tenant is the Registered Owner of all of the Bonds,
         the Tenant shall offset the obligation to make payments of Basic Rent
         hereunder with respect to the Bonds, or any Future Series,
         respectively, including without limitation amounts due pursuant to
         Section 10.03 hereof, against the Tenant's right to receive payments of
         the Bonds, or any Future Series, respectively." The Bond indenture
         contains a similar offset provision.

If you have any questions regarding these responses, please direct them to
William H. Hardman, Jr., Chief Financial Officer, at 864-255-4127, or in his
absence, to David Palmer, Controller, at 864-370-4719.

Sincerely,

/s/ William H. Hardman, Jr.
William H. Hardman, Jr.
Chief Financial Officer

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