A system for producing folded articles includes a cutting station (56) operable to segment a fabric web (42, 44) into a continuous stream of individual web segments (74, 76). The system also includes a first folding station (58) operable to fold each of the web segments (74, 76). The system further includes a spacing station (88) operable to receive the stream of web segments (74, 76) from the folding station (58) and deliver the stream of web segments (74, 76) at a predetermined spacing to correspond with a packaging registration.