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Strategy and Structure in the Textile Industry: Spencer Love and Burlington Mills, 1923-1962

Published online by Cambridge University Press:  13 December 2011

Annette C. Wright
Annette C. Wright
Affiliation:
Annette C. Wright is associate director of the Center for the Study of the American South, director of the Proposal Development Initiative, and an adjunct assistant professor of American studies at the University of North Carolina at Chapel Hill.
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Abstract

Shrewd product selection allowed Spencer Love to build Burlington Mills into a large profitable firm in what most observers regarded as a declining industry, textiles. Using integration, diversification, and a multidivisional structure, he then attempted to have Burlington dominate its industry just as a few other large corporations controlled steel, automobiles, and chemicals. In textiles, however, powerful forces constrained and sometimes defeated these strategies. After the emergence of artificial and synthetic fibers, textile mills became dependent on large yarn manufacturers in the chemical industry such as Du Pont and Celanese. In addition, large size and diversification did not always protect a company's profits, and forward integration into the volatile women's garment industry proved to be especially dangerous. In the end, Love concluded that Burlington should remain a weaving and knitting company; when he died in 1962, textiles remained an industry in which small, specialized firms survived alongside the corporate giants.

Type
Articles
Information
Business History Review , Volume 69 , Issue 1 , Spring 1995 , pp. 42 - 79
Copyright
Copyright © The President and Fellows of Harvard College 1995

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References

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16 “Bur-Mil Will Not Enter Yarn and Garment Fields,” 8 May 1948, Greensboro Daily News, copy in Clipping File, North Carolina Collection, University of North Carolina at Chapel Hill; and “Labor of Love,” Forbes, 1 Dec. 1951, 18.

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18 Interview with William Klopman, Jr., Greensboro, N.C., 2 Oct. 1987, tape in author's possession; “And Who Will Weave It?” Fortune, July 1937, 118; and Lou Gartner to Jasper E. Crane, 12 March 1937, Records of E. I. du Pont de Nemours & Co., Series 2, Part 2, Papers of Jasper Elliot Crane, acc. 1231, box 1037; Hagley Museum and Library.

19 Love to Board of Directors, 14 Aug. 1939; and Love to James Lee Love, 7 Aug. and 5 Sept. 1939, Spencer Love Papers.

20 Markham, Competition in the Rayon Industry, 209–12; Interviews with J. C. Cowan Jr., Greensboro, N.C., 30 Sept. 1987 and 13 Jan. 1988; Burlington Mills' “Organization New Bulletin,” 21 July 1939; Love to James Lee Love, 5 Sept. 1939, Love to Board of Directors, 18 July 1941; “Organization New Bulletin,” #22, 17 Oct. 1941, Anonymous to Love, 15 Nov. 1941, Spencer Love Papers; Burlington Mills Corporation, Annual Report 1943, 1–2; and Harris, Seymour E., Price and Related Controls in the United States (New York, 1945), 169–82Google Scholar.

Burlington Mills was even less affected by the Korean War, known in the textile business as a “cold-weather war,” when less than 10 percent of company volume was sold to the military. See Annual Report 1951, 4.

21 “The Rayon Situation”; J. B. Quig to J. L. Martin, 10 Nov. 1952, Records of the E.I. du Pont de Nemours Powder Co., Series 2, Part 2, Rutledge Scrapbook, acc. 903, Hagley Museum and Library; and Hardin, Amy, “Industry Structure and the Marketing of Synthetic Fibers,” Business and Economic History 19 (1990): 218–19Google Scholar.

22 Spencer Love to James Lee Love, 4 March 1933, 15 Nov. 1935, and 20 Aug. 1936, Spencer Love Papers.

23 “New Tariff Bill Went Into Effect June 18,” Textile World, 21 June 1930, 42–43.

24 Benson, Susan Porter, Counter Cultures: Saleswomen, Managers, and Customers in American Department Stores, 1890–1940 (Urbana, Ill., 1986), 62–67Google Scholar; and Scranton, Figured Tapestry, 329–47.

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26 Copeland and Turner, Production and Distribution of Silk and Rayon Broad Goods, 1–2.

27 Ibid., 2; Swan, Herbert S., The Plain Goods Silk Industry (Paterson, N.J., 1937), 33Google Scholar; Philip J. McLewin, “Labor Conflict and Technological Change: The Family Shop in Paterson, New Jersey,” 151, and Philip B. Scranton, “Introduction,” 1–7, both in Scranton, Philip, ed., Silk City: Studies on the Paterson Silk Industry, 1860–1940, (Newark, N.J., 1985)Google Scholar. Silk weaving persisted in Paterson (primarily cloth for women's lingerie) during the 1930s only because of its proximity to New York City, the primarily center of the apparel trade, and to the dyeing and finishing industry within the city itself.

28 Copeland and Turner, Production and Distribution of Silk and Rayon Broad Goods, 29; Wright, Old South, New South, 198–238; and Bureau of the Census, Manufactures: 1939, vol. 2, part 1 (Washington, D.C., 1942), 317Google Scholar.

29 Hall, et al., Like a Family, 237–88, and Tullos, Allen, Habits of Industry: White Culture and the Transformation of the Carolina Piedmont (Chapel Hill, N.C., 1989), 86–133Google Scholar. On wage levels, see Copeland and Turner, Production and Distribution of Silk and Rayon Broad Goods, 29; Wright, Old South, New South, 216–25, 253–54; “Southern Wage Bulletin II,” 20 July 1948, Research Department, Textile Workers Union of America, Textile Workers Union of America Papers, Perkins Library, Duke University, Durham, N.C.; and Barnes Associates to Richard D. Wood, 31 Jan. 1935, Barnes Textile Associates Reports, 273.636, American Museum of Textile History.

30 Crompton & Knowles Loom Works papers, box 56, American Museum of Textile History; “C & K Loom-Inary,” advertising pamphlet in Company Files, Burlington Industries, Greensboro, N.C.; and Irving H. Verry to Spencer Love, 7 Oct. 1942, Spencer Love Papers.

31 “What the New C & K Super Silk Loom Means to the Management,” Southern Textile Bulletin, 11 Feb. 1932, 3; “Burlington Mills in Textile Leadership,” Burlington Daily Times-News, 25 Nov. 1933, 8; “Rayon Manufacture in the United States, 1911–1936,” Textile World, Sept. 1936, 99; “Rayon Weaving's Greatest Gains During Depression,” Daily New Record, 2 Aug. 1933, copy in Spencer Love Papers; and interviews with Cowan and J. Harold Smith, tapes in author's possession.

32 H. W. Rose, “Rayon Weaving in the South, Part II,” Cotton, Oct. 1932, 64–66; Ralph C. Maultsby, “Merchandising Dominant Factor in Growth of Rayon Weaving in Burlington Mills Group,” Textile World, 23 Jan. 1932, 24–25; “Burlington Mills, Inc. Make Improvements,” Burlington Daily Times, 21 Nov. 1929, 1; “Burlington Mills in Textile Leadership,” Burlington Daily Times-News, 25 Nov. 1933, 8; “Rayon's Weaving's Greatest Gains During Depression,” Daily News Record, 2 Aug. 1933, copy in Spencer Love Papers; “Who Will Weave It?” Fortune, July 1937, 118; Annual Reports, 1937–45; and “Burlington Mills Corporation,” Application for Listing to Committee on Stock List, the New York Stock Exchange, 26 May 1937, copy in Company Files, Burlington Industries, Greensboro, N.C.

33 “Local Mills are Opening Offices for Direct Selling,” Burlington Daily Times, 6 Feb. 1929, 1; “E. F. Addiss Joins Burlington Mills, Effective January 1,” Daily News-Record, 21 Dec. 1934, copy in Love scrapbook, Love Papers; “Burlington Mills Forms Financial Affiliate Group,” Burlington Daily Times-News, 1 May 1935, 10; and Cox, The Marketing of Textiles, 317–19.

34 “And Who Will Weave It?” Fortune, 116; “Fibers, Fabrics, Finishes: The Klopman Story,” Clothes, 15 April 1967, 15–23; Cowan interviews; interview with William Klopman, Jr.; interview with Dame Hamby, 1 Nov. 1988, Raleigh, N.C., tapes in author's possession; Rogers, David C. D., “A History of the Policy of Diversification of Burlington Industries, Inc., 1923–1957” (D.B.A. thesis, Graduate School of Business Administration, Harvard University, 1958), 16–22Google Scholar; and Love to Homer (unknown last name), 19 Dec. 1952, Spencer Love Papers.

35 “Accent on Quality,” Underwear and Hosiery Review, Aug. 1943, 96–104; interviews with Klopman and Hamby; and Company Files, Burlington Industries, Greensboro, N.C.

36 “Burlington Mills,” Fortune, July 1949, 82–85, 109–16.

37 Harris, Price and Related Controls in the United States, 169–82; “Textron,” Fortune, May 1947; Miller, Stanley et al. , Manufacturing Policy, rev. ed. (Homewood, Ill., 1964), 191–229Google Scholar; and Dero Saunders, “Burlington Weaves a New Pattern,” Fortune, Dec. 1954, 106ff.

38 “Burlington Mills,” Fortune, July 1949, 110–16; and “Burlington Weaves a New Pattern,” ibid., Dec. 1954, 160, 162.

39 Burlington Mills, Annual Report 1947, 5.

40 “Bur-Mil Shifts Sales Pitch,” Business Week, 24 Nov. 1956, 38; and Burlington Industries, Annual Report 1956, 5.

41 Burlington Industries, Annual Report 1964, 4.

42 Love to Paul Davies, 13 June 1960, Spencer Love Papers.

43 “Burlington Mills,” Fortune, July 1949, 85, 109.

44 Hounshell and Smith, Science and Corporate Strategy, 268–73; “A History of the Policy of Diversification of Burlington Industries, Inc., 1923–1957,” 42; “Burlington Mills,” Fortune, July 1949, 109, 110; “Nolde & Horst, Burlington Group Join Hose Interest,” Women's Wear Daily, 14 April 1939, copy in Spencer Love Papers; Spencer Love to James Lee Love, 5 Nov. 1947, Spencer Love Papers; and “Merchandising a Finished Product: The May McEwen Kaiser Hosiery Division,” Burlington Bandwagon, Summer 1949, 12–13.

The premier new synthetic fibers which challenged rayon emerged from the laboratories of Du Pont. Its control over nylon, Orion acrylic, and Dacron polyester rested on its willingness to invest in research and development, a strategy ignored by American Viscose and Celanese. Love himself warned that competitive conditions in the textile industry might come to an end because “the growing monopoly position of Du Pont in having complete possession and domination of the two best fibers there are.” Du Pont did retain an advantage over its competitors and suppliers for a number of years, but under pressure from the antitrust division of the Justice Department, it licensed another firm to manufacture nylon in 1951. Control over Dacron ended in the late 1950s, and significant price competition among synthetic yarns of all types began. Love, “Outlook and Needs of Man-Made Textiles,” Paris, 3 June 1954, Spencer Love Papers; Hounshell and Smith, Science and Corporate Strategy, 384–422, 439; Chandler, Scale and Scope, 309–11; and Hardin, “Industry Structure and the Marketing of Synthetic Fibers,” 218–19.

45 “A History of the Policy of Diversification of Burlington Industries, Inc., 1923–1957,” 64–102; “Burlington Weaves a New Pattern,” Fortune, Dec. 1954, 108, 154; Burlington Mills, Annual Report 1954, 5; and Annual Report 1956, 4.

46 “Wool Textile Industry, Like Wool, Is Losing Its Identity in Mergers,” New York Times, 25 July 1954, copy in Clipping File, North Carolina Collection, University of North Carolina at Chapel Hill; and U.S., Congress, Senate, Report prepared by the Bureau of the Census for the Subcommittee on Antitrust and Monopoly of the Committee on the Judiciary, part 1, 87th Cong., 2d sess., 1963, 14, 79. Imports played only a small role in the decline of woolen and worsted weaving, affecting only the highest grades of cloth. See Himmelstein, Seymour, “The Decline of the American Woolen and Worsted Industry,” The Analyst Journal 14 (Feb. 1958): 85Google Scholar; and Alderfer, E. B. and Michl, H. E., Economics of American Industry, 3d ed. (New York, 1957), 370–88Google Scholar. By 1987 there were only 105 companies engaged in woolen weaving employing 12,100 production workers; Bureau of the Census, 1987 Census of Manufactures, Manufactures, Industry Series, 22A–6.

47 Burlington Mills, Annual Report, 1962, 11.

Always conscious of the competition, a number of Love's executives suggested that Burlington follow the example of Textron and acquire non-textile business such as plastics or chemicals. While Love was alive, the company never pursued such a policy, but after his death the company owned some furniture manufacturers for a short time.

Love's rapid pace of acquisitions did alarm the rest of the industry and organized labor, which lodged complaints with the Federal Trade Commission. In 1968 it issued a consent order under which Burlington agreed not to acquire any more mills for ten years without FTC approval.

48 “Burlington Weaves a New Pattern,” Fortune, Dec. 1954, 156, 160, 162; and Annual Report 1954, 5.

49 Markham, “Integration in the Textile Industry,” 83; “Textile Makers: Fewer and Stronger,” Business Week, 31 July 1954, 58; “Weaving a Profit Pattern,” ibid., 6 March 1965, 76; Seymour Freedgood, “What Happened at Burlington When the King Dropped Dead,” Fortune, June 1964, 106; and Olsen, Richard Paul, The Textile Industry: An Industry Analysis Approach to Operations Management (Lexington, Mass., 1978), 113–27Google Scholar.

50 Don Bedwell, “Burlington Nears End of Employee Cutbacks,” Charlotte Observer, 4 Feb. 1978, 1; Diane Luber, “Burlington Possible Takeover Target,” Greensboro News and Record, 9 April 1987, 1; Alison Leigh Cowan, “A Brash Deal Maker and Its Uncertain Bets,” New York Times, 31 Aug. 1990, C1; George Anders, “Morgan Stanley Found a Gold Mine of Fees By Buying Burlington,” Wall Street Journal, 14 Dec. 1990, 1; and “Burlington Industries Goes Public Again,” Raleigh News and Observer, 20 Jan. 1992, D1.

51 Scranton, Figured Tapestry, 505.