Burlington Industries

Burlington and Greensboro, NC

In the early 1920s, Burlington, North Carolina was looking for a knight on a white horse to come to town and pick up the pieces left behind as the Holt family lost interest in the city’s textile mills.  The town fathers offered a $250,000 loan underwritten by the Chamber of Commerce to anyone who would come to town and revitalize the dieing textile plants.   On November 1, 1923, Spencer Love agreed – the company incorporated. The newly formed company consisted of 200 employees and one building situated in the middle of a cornfield. Textile production was started even before the building’s construction had been completed.  In 1924, after liquidating the Gastonia Cotton Manufacturing Company, Love moved the best of his remaining equipment to Burlington and started over. Operations began on July 29, 1924

Initially, Burlington Mills manufactured several cotton products, including flag cloth, bunting, cotton scrims, curtain and dress fabrics, and a type of diaper cloth called “birds eye”. Unfortunately for the company, however, many of these products were already becoming obsolete by the time manufacturing had begun. In the meanwhile, a super salesman by the name of Harry Dalton was employed by American Viscose, manufacturer of rayon.  He believed in personal contact and traveled exhaustively by train, sometimes spending six out of every seven nights on Pullmans to get the word and the product out to new customers.     Business for Love faltered for a short time, until out of desperation he began producing bedspread out of American Viscose’ rayon. Rayon was a relatively new fiber – many people called it “artificial silk” – and Spencer hung his hat on the fiber. A 104 pound lot was run as an experiment.  The yearn went into the filling of 40 inch cotton warp and created a “crinkled ” fabric.  By seaming it up the middle, it was wide enough for a bedspread.  By today’s standards, they were awful – stiff, slippery, and streaky.  Business perked up! Success! (8)  A second mill opened in 1926 with 48 jacquard looms.  Dress goods sales were “phenomenal”, (8) and by 1929 with $1,000,000 sales, Burlington Mills had a New York sales office.  He had arrived.

Pioneer Plant
First Burlington Industries Plant July 29, 1924

 

 

 

The Pioneer Plant was recognised by the State of North Carolina in early 2008.  This marker was placed on Graham Street in Burlington. Photo: Gary Mock

 

 

 

First office building
Images: UNC Image Collection and
State of NC Archives.

 

 

 

 

In 1935, the company moved its headquarters from Burlington to Greensboro, North Carolina, in order to have railway access to its operations in New York.  In 1936, there were 22 plants scattered through 9 communities. (8)

In 1937, Burlington consolidated its various operating units into 30 plants and was listed on the New York Stock Exchange. Company revenues had risen to $25 million.  Hosiery was added in 1938 and in May 1940 nylon hosiery was introduced. (8)

When World War II broke out, the company began producing items for the U.S. government. Its research laboratories also were employed on various government projects, including one that investigated the use of a new fiber, nylon, in making parachute cloth. This initial work provided the foundation upon which the company developed several other uses for nylon-based textiles when the war ended.  Harriman Hosiery Mills were acquired in 1944. Stark Bros. ribbon was acquired in 1945 to add narrow fabrics to the mix.

Burlington Mills ads 1944 NC State College
Agromeck 1944

Following the war, growth continued rapidly into the 1950s, according to Robert L. Huffines, President who spoke on “The Sigificance of Synthetics.”   Love bought the Cramerton Mills of Gastonia in 1946.  May, McEwen,Kaiser was acquired in 1948 and Herb Kaiser joined to manage that operation. Plants were often built with one wooden wall that could be taken down, moved, and erected again to expand into available floor space. Burlington also acquired several competitors during this time, including “the pearl in the oyster” with Cramerton Mills, the New York selling house Galey and Lord; Pacific Mills  (scan down to 1950s) and Klopman Mills of Asheboro and Ramseur, NC.  Victor T. Fahringer, inventor of the jet dye machine came with the Robbins Mills acquisition.  William A. Klopman came as a part of the Klopman package. As its diversification strategy began taking the firm beyond its original spinning and weaving businesses, the company changed its name in 1955 to Burlington Industries.

Letterhead from the 1950s
Courtesy of Peter Metzke

In 1960, Burlington purchased James Lees & Sons, a Philadelphia-based carpet manufacturer. Two years later, Burlington became the first textile firm to exceed $1 billion in sales. To this point, from its beginning in 1923, the company’s growth was directed primarily by its founder, J. Spencer Love.

When Love died an untimely death of a heart attack on January 20, 1962, Burlington Industries was the largest textile company in the world, and the 48th largest U.S.-based corporation.  A company that operated in 18 states and 7 foreign countries.

Spencer Love was inducted into the North Carolina Business Hall of Fame in 1989. http://www.historync.org/laureate%20-%20James%20S.%20Love.htm

 

Charles F. Myers, Chairman 1962-1974

Myers became Chairman of Burlington in 1962, and engineered a controversial internal restructuring that altered traditional organizational functions, such as marketing and research, and redeployed them into vertically integrated businesses. The company’s New York-based executives–along with Ely R. Callaway, who succeeded Myers as Burlington’s president in 1968–desired a more centralized operation, while Greensboro-based executives favored Myers’ decentralized, divisional structure.

Myers also changed the company’s strategy to more effectively manage increasing labor costs and foreign competition. Under Love, Burlington provided fabric to other apparel and home furnishings manufacturers. President Eli Callaway thought a demonstration mill which showed how the company’s products were made would make a statement.  The Mill opened in September 1970. In early 1971, Burlington announced a $7 million promotion.  Burlington House was created by merging two furniture divisions, United and Global, to form Burlington House Furniture.  Charm Tred Rug Division became Burlington House Area Rugs.   The Galey & Lord division moved into double knits by renovating the Modena plant in Gastonia, NC.   The Worsted Division began making and marketing double knits for women’s wear.    Two yarn divisions, Burlington Yarn and Madison Throwing became Burlington Madison Yarn Co.  A new drapery plant was opened in Reidsville, NC.  Finally, three worsted Div. plants were converted to home furnishings.  All of this in 1971. (9)  Myers undertook a new approach that directly targeted consumers as the company’s customers, and in 1972 Burlington introduced several products under its own name, including furniture, towels, blankets, men’s socks, women’s hosiery, sheets, and draperies.  There were also acquisitions of non-textile businesses, development of a consumer advertising campaign, and a major corporate reorganization. One of the acquisitions made during this time that of the Globe Furniture Company in 1966, furthered the company’s goals of getting closer to consumers and of finding new avenues of growth. This became particularly important three years later when a Federal Trade Commission (FTC) decree prohibited Burlington from purchasing any United States textile firms for ten years without prior FTC approval.

Callaway ran the day-to-day operations of the company, while Myers tended to finances. Callaway was largely responsible for the company’s belated entry into double-knit fabrics, after the popularity of knitwear seriously began to reduce the company’s sales volume in traditional woven fabrics. In 1973, those who preferred the divisional structure forced Callaway to resign.  Callaway’s departure was a loss to the company. Fortunately, Horace C. Jones, the former president of the company’s Lees Carpets division, succeeded him as president. Jones ensured that Callaway’s work to enter the knitted fabric market was continued. Although faced with rising costs for raw materials that were in short supply, Burlington quickly retooled its worsted fabric production facilities to take advantage of the growing trend toward knit and stretch fabrics. This move resulted in Burlington’s recovery.

Erwin Mills merged with Burlington Industries in 1968 when the Abney Mills of Greenwood, SC sold 10 plants 2. In 1986, Burlington sold the original (1893) Durham factory to J.P. Stevens & Co., which closed the mill.

Burlington became the first major textile company to publicly acknowledge the job-related aspect of byssinosis after testing 3,008 employees in eight plants.  Dr. Imbus, chief medical officer worked closely with state and university researchers to try to find an answer to the cause of this crippling lung disease. (9)

Also contributing to the company’s recovery were U.S. trade agreements in 1971 with four Asian countries that served to reduce import volume. The devaluation of the dollar abroad also helped American business by giving U.S. goods a price advantage. During this time, the company increased its emphasis on the home furnishings line, which had begun to be marketed under the Burlington House name. In 1973, Burlington ventured into the lighting area with its acquisition of Westwood Industries.

Textile World magazine recognised Burlington at age 50 with a feature article detailing the amazing rise of the company.  Burlington had 84,000 employees in 11 countries.  A New York showroom was dubbed “The Mill” because it featured operating textile machinery.  Indeed, for all intents and purposes, Burlington was “The Mill” to many people.  Sales hit $1.8 billion with a diversification: 62.7% apparel (which include 5.6% hosiery); 32.6 % home fabrics; and 4.7% industrial.  If all plants were collected together they would span 50 million square feet or over 1,000 acres. (

Myers was inducted into the North Carolina Business Hall of Fame in 1994. http://www.historync.org/laureate%20-%20Charles%20Myers.htm

Offices New York

 

Friendly Avenue, Greensboro

 

Horace C. Jones 1974-1976

Internally, the struggle for power continued. Following Myers’ retirement in 1974, Horace C. Jones was appointed chairman and CEO, and four executive vice-presidents competed to succeed Jones as president. William A. Klopman, son of Klopman Mills’ founder, was chosen for the job. Unfortunately, the recovery that was seen during Jones’ presidency was short-lived. By the beginning of 1974, Burlington faced deepening shortages of raw material, fuel, and labor. These setbacks, combined with an inflationary economy, threatened consumer spending for apparel and home furnishings. Demand for double-knit apparel fabrics weakened across the US because the material tended to snag. Luckily, strong sales overseas in other areas enabled the company to finally realize a positive return on its ten-year-old investment in its European operations.

William A. Klopman 1976-1986

In 1976, William A. Klopman was appointed Burlington chairman and CEO. Under his leadership, domestic sales finally rebounded in 1977, due largely to gains in the home furnishings and industrial products area. Burlington changed its apparel products. The company shifted production away from heavyweight woven fabrics into more lightweight textured products, introduced a new washable polyester and wool blend called “Burlana,” and expanded the manufacture of denim apparel fabrics, which were growing in popularity.

Burlington entered the 1980s with an eye on its critical foreign operations. It gradually strengthened its financial position overseas by restructuring its French businesses and by selling its German worsted apparel fabric subsidiary. The company’s continued emphasis on capital spending, however, met with mixed reviews. Analysts argued that Burlington’s object of becoming a low-cost producer supported by technologically superior plants and long manufacturing runs prevented the company from making necessary changes flexibly and quickly enough to keep pace with trends in fashion and consumer demand. Klopman also was criticized for his impersonal and aggressive management style, incorrect product line decisions, and for creating trade friction between the United States and the Peoples’ Republic of China, as he lobbied hard for limits on Chinese imports. Nevertheless, in 1981 Burlington became the first textile firm to surpass $3 billion in sales.

In 1984, Burlington acknowledged the necessity of broadening its product mix and targeting specialized, high-margin designer niches. The company introduced a lighter-weight crinkled denim fabric and designer bedding. Just two years later, Burlington decided to place greater emphasis upon its industrial textiles area, and sold the designer bed-linen lines, along with the rest of its bedding and bath textiles division, to J.P. Stevens & Co.

Frank S. Greenberg 1986-1994

Upon Klopman’s retirement in 1986, Frank S. Greenberg became Chairman and CEO. Greenberg came to the company in 1959 when Burlington purchased Charm Tred Mills, a carpet firm owned by Greenberg’s father. Like his predecessors, Greenberg rose through divisional ranks into the executive suite, beginning as the president of the rug division and later serving as company president.  Soon, the company began fighting a takeover attempt by Dominion Textile Inc., Canada’s largest textile producer. Many analysts felt that Burlington’s prior reluctance to exit the apparel-fabrics business when lower-priced imports began flooding the market had reduced company profits and made Burlington vulnerable to such an attack from outside the firm. Dominion, looking for a way to rejuvenate its own sales in a stagnant Canadian market, viewed Burlington’s denim fabric unit as an attractive acquisition.

Burlington was able to thwart the Dominion takeover through a leveraged buyout that took the company private. Through an employee stock ownership plan, Burlington’s employees became its primary owners. To reduce the significant amount of debt incurred, in 1987 the company began selling key assets, such as its industrial products segment, while also eliminating 1,200 employee positions and slicing operating expenses to the bare bone. Within one year, Burlington retired 45 percent of its buyout debt through severe reductions in overhead spending, capitalizing on a favorable market for its divested assets, and strong apparel fabric sales.  Burlington won the battle with Dominion but eventually, the-mortally wounded company would suffer beyond imagination and lose the war.

In late 1987, Burlington Industries sold the apparel fabrics portion of its Burlington Blended Fabrics division and the Burlington Prints division for about $150 million. A group consisting of Citicorp Venture Capital Ltd. and the management of the divisions acquired the operations. The group also assumed certain liabilities and allowed Burlington to retain an 18 percent interest in the new company, to be called Galey & Lord.

Operating in the early 1990s as a much leaner organization than in the past, Burlington Industries faced continuing challenges in matching market demand with its manufacturing capabilities and expertise. Burlington’s newly streamlined operation and its proven ability to get out from under a massive debt load had given the firm increased flexibility, which enabled the company to explore new trends in textile products. By that point in time, Burlington had positioned itself as the world’s largest jacquard weaving manufacturer for upholstery, draperies, mattress coverings, and bedroom linens. Furthermore, its Area Rugs division was the United States’ leader, and was experimenting with new patterned color systems as a means of offering customers a broader variety.

One notable change in the early 1990s occurred when Burlington re-entered the public arena with an open stock offering in 1992. With this change, the positive alterations that had taken place when the company operated privately became very evident, as Burlington was immediately able to capitalize on new industry trends. Most importantly, the company was fully able to develop and market new and different products in order to capture consumer interest and set itself apart from the competition. Not only was new product development increased, but so also was Burlington’s speed of service to both retailers and customers. It was clear that the company’s restructuring efforts after the leveraged buyout in 1987 were finally paying off. A surge in new housing in the United States during 1994 heightened demand for residential carpeting, even further helping Burlington regain its standing as one of the country’s largest and most successful textile businesses. To meet the demand, many of Burlington‘s plants began running 24 hours a day, seven days a week. Meanwhile, the company continued to invest millions in new product development throughout 1994 and 1995, while virtually extinguishing the remaining debt load left over from the previous years.

George W. Henderson III 1995-2003

At that time, Burlington was searching for attractive acquisition candidates that would diversify its product offerings, while also complementing the items it presently produced. In January 1995, Burlington made the decision to purchase Bacova Guild, Ltd., a company that was the market leader in printed accent rugs and mats. The Bacova Guild joined the Burlington House Area Rugs division, which was already the market leader in dyed bath and area rugs, and together the two operations helped Burlington control those segments of the floor covering market.

Near the end of the century, Burlington was operating over 45 different manufacturing plants throughout the United States and Mexico. As it already enjoyed a standing as the United States’ largest apparel fabrics manufacturer, Burlington continued to increase its export volume to further expand its yearly sales. The company entered into a joint venture in 1995 with Mafatlal Industries, Ltd. of India to make and sell denim products in India and other parts of Asia. Burlington decided to sell its struggling knit fabrics division in 1996.  Also aiding in Burlington‘s heightened potential for further growth was the passage of the North American Free Trade Agreement (NAFTA), which helped Mexico and the Caribbean become extremely important sources of apparel items. Burlington had operated out of Mexico for half a century, and an increase in demand and production there was a benefit. 1995.

The company entered Chapter 11 bankruptcy protection in December 2001. Its assets were acquired by International Textile Group (ITG) out of bankruptcy in late 2003. The Lees Carpet division was sold to Mohawk Industries as part of the deal. With only 500 employees remaining, the company moved out of its well known headquarters building on Friendly Avenue in October 2004. ITG continues to operate the companies Burlington WorldWide Apparel and Burlington House Interior Fabrics.

Burlington Trailer and sign, Burlington, NC
Photo Gary N. Mock 2009

 

 

 

Friendly Avenue Office Destroyed
Photo Courtesy WFMY-TV

 

 

 

 

 

 

 

 

 

References:

1. http://www.referenceforbusiness.com/history2/14/Burlington-Industries-Inc.html Spring, 1995. Accessed January 20, 2008
2. http://query.nytimes.com/gst/fullpage.html?res=9B0DEED9123BF936A15751C1A961948260 Dec 25, Accessed January 20, 2008
3. Burlington/Erwin acquisition, NY Times, Jan. 20, 1962.
4. http://www.answers.com/topic/galey-lord-inc?cat=biz-fin Galey & Lord Accessed January 20, 2008.
5. http://en.wikipedia.org/wiki/Burlington_Industries Accessed January 20, 2008
6. State of North Carolina historical markers, Burlington, NC
7. Christiansen,L. A., Jr.,Model Mill issue  “Burlington: The World-Beater sparkles at 50“, Textile World, vol 123, number 6, June 1973 p37-124.
8. Christiansen,L. A., Jr., “Spencer Love: A man , a fiber, an empire”, Textile World, Vol. 123, number 6, June 1973, p77-83.
9. Textile World various 1971 items.