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Malden Mills Industries, Inc.

Malden Mills Industries, Inc.

46 Stafford Street
Lawrence, Massachusetts 01841
U.S.A.
(508) 685-6341
Fax: (508) 975-2595

Private Company
Incorporated:
1906
Employees: 3,200
Sales: $425 million (1995 est.)
SIC(s): 2221, Broadwoven Fabric Mills (Manmade Fiber & Silk); 2257, Weft Knit Fabric Mills; 2258, Lace & Wrap Knit Fabric Mills; 2262, Finishing Plants (Manmade Fiber & Silk Fabrics); 2297, Nonwoven Fabrics; 3086, Plastics Foam Products

Although Polartec lightweight fabrics are recognized worldwide for their moisture resistance and thermal qualities, few know this extraordinary product is the creation of Malden Mills Industries, Inc. of Massachusetts. Family-run and -operated, Malden Mills quietly grew by 200% in the 1980s and 1990s as Polartec and a line of high-performance jacquard velvets for home furnishings generated a $3 billion market. Yet what put Malden Mills firmly in the international spotlight was a devastating fire in December 1995 that destroyed much of the factory and injured 33 employees. Rebuilding immediately, Malden not only assured workers of their jobs but paid full salaries to those unable to work during reconstruction. In an era of massive layoffs and closings, Malden Millss dedication to the industry, its employees, and the community was a welcome anomaly in the fractured business world of the mid-1990s.

Wool and Woolies, 1906 to the 1960s

Henry Feuerstein came to America in the 1890s from Hungary and found work in New York City sewing blouses. After losing his job twice, Feuerstein turned to selling dry goods across the state. From small push cart to factory to wholesale outlets, young Henry prospered and soon lived among the well-heeled in Manhattans Upper East Side. When his real estate investments went awry, Henry answered a classified ad and spent the remainder of his fortune, $50,000, on a small mill in Malden, Massachusetts in 1906.

Malden Knitting produced wool workmans sweaters and bathing suits. Under Feuersteins leadership, the company flourished and created Malden Spinning and Dyeing in 1923 to keep up with demand, much of which was producing uniforms for the U.S. Army during World Wars I and II. By the end of World War II, Malden Knitting was experimenting with various fabrics and applications to broaden its production capacity and to anticipate the ever-changing needs of American families. By this time, Henry Feuersteins son Samuel had taken charge of Malden Knitting and his teenaged grandson, Aaron, also worked in the family business. Beginning with school vacations and then becoming full-time after graduation from Yeshiva University in 1947, Aaron was appointed factory supervisor and began a long and distinguished career at Malden.

By 1956 Malden Mills achieved what the industry called vertical continuous production with dyeing, printing, and finishing all completed within one facility. This year also marked the companys relocation to Lawrence, Massachusetts, 35 miles north of Boston, and into the historic Arlington Mill complex built before the turn of the century. One former employee of the mill wrote a poem about it, entitled A Lone Striker; the poets name was Robert Frost.

In 1962 Malden opened a new knitting mill in Bridgton, Maine, and four years later again branched out, this time by dabbling in synthetic fabrics for the upholstery market. With Samuel Feuerstein nearing retirement, Aarons role was increasingly important at Malden. Under his tutelage, Malden became more automated and, unlike other textile manufacturers, stayed in Massachusetts rather than relocating to the South or the West Coast where land and labor were cheaper. Instead, Malden relied on the companys proximity to Boston for the areas skilled work force and high-tech breakthroughs.

The Fake Fur Faux Pas: the 1970s, and the Early 1980s

As the 1960s came to a close, Aaron Feuerstein took full control of Malden and bet big on fake fur products by pouring $20 million into specialized equipment and opening mills in Hudson, New Hampshire, and Barre, Vermont. I thought there would be unbelievable growth because of the fur activists, Feuerstein later told Forbes magazine, yet despite capturing 25 percent of the U.S. market, fake fur demand never blossomed and began declining. Opening still another factory in North Berwick, Maine, in 1976, Malden tried to make ends meet by selling both upholstery fabrics and fake fur products, while continuing to pour funds into researching a synthetic, lightweight, thermal fabric. Though Maldens fake fur market share grew to 50 percent, Feuerstein realized this was not the huge opportunity he had originally believed it would be.

To head off falling sales Malden started producing velvet upholstery for home furnishings, but not in time. Forced into Chapter 11 bankruptcy in 1981, the company laid off hundreds of employees, and Feuerstein vowed to make it up to them some day. Salvation came soon in the form of Polarfleece, which revolutionized the fabric industry. Debuting in 1979, Polar-fleece was 100 percent polyester, capable of drawing moisture away from the body while providing warmth; it became the fabric of choice for high-performance athletic and aerobic apparel. Among Maldens first major customers was Patagonia, which produced outerwear for mountain climbers and hikers. Thoroughly impressed with the unique shearling knit, Patagonia used Polarfleece for a variety of garments, buying every yard we could make as fast as we could make it, Vice-President Henry Ackerman told the Wall Street Journal Polarfleece was not only a huge success for Patagonia, which expanded into several related apparel lines, but put Malden on the map for a variety of other outdoor clothing manufacturers. By 1982, Polarfleece pushed sales to $5 million and helped pull the company out of bankruptcy in 1983.

PolartecThe Ultimate Answer Mid-1980s to Early 1990s

Capitalizing on the incredible popularity of Polarfleece, Malden produced several new lines of high-performance, technically advanced fabrics to service the outdoorsy set. Yet Malden stayed ahead of its many imitators with constant innovation and by producing customized lots of varied colors, thicknesses, and textures so each of its customers could market their own blend. By 1986 overall sales had grown to about $150 million, and Malden began investing $10 million per year in state-of-the-art research, design, and production equipment to keep up with the ever-growing demand for its products. As Polarfleece continued to gain prominence, Maldens upholstery fabric sales had increased substantially and by 1988 accounted for more than $105 million in revenue. Polarfleece raked in a respectable $69 million. The end of the 1980s also marked Maldens expansion into Europe, where its nylon velvet and warp-knit upholstery fabrics were especially popular, helping total sales climb to $200 million in 1989.

As the 1990s approached, Malden was a dinosaur in the New England area. The few textile manufacturers who remained either went out of business or were plagued by the states harsh environmental laws and ever-increasing labor costs. Yet Malden demonstrated its commitment both to the area and to protecting and preserving the environment by building a water treatment plant to restore the Spicket River systems encompassing the companys mills. The treatment plant conserved energy and reduced waste, air emissions, and the amount of chemicals necessary to produce its many fabrics.

In 1991 Polarfleece products were trademarked as Polartec Climate Control Fabrics available in light-, medium-, and heavyweight thicknesses with more than 100 different styles (from underwear, bike shorts, and sweatshirts to jackets, wet suits, and gloves) available in 5,000 colors and 1,000 patterns. Polartec remained the industry leader because of its stretch, fast wicking, easy dyeing, and durable, nonpilling finish. Clients like Eddie Bauer, Lands End, L.L. Bean, Ralph Lauren, and others often based their entire outdoor or athletic lines on Polartec fabrics, which in turn supported 1991s strong sales of $250 million.

Polartec and Eco-Velvet: 1992 and Beyond

Malden established the Glenn Street Studio in 1992 to develop and produce natural jacquard velvets. This sturdy, stylish cotton adorned a wide array of products from elegant, vibrantly colored furniture to vehicle upholstery and infant carseats. By this time Maldens home furnishings were sold in Australia, Canada, the Middle East, New Zealand, and South Africa, with such customers as Al Janoub, Carina Polstermobel, Ian Walker, Rexmore, and the Steinhoff Group. In the United States, Malden was a regular supplier to Action, Klaussner, and La-Z-Boy, and was also selling to Century, Frederick Edwards, Hickory Chair, and Southwood Furniture. This year, 1992, also marked the initiation of the Polartec Performance Challenge to sponsor and support outdoor adventures like the Trango Towers Expedition in Southern Pakistan, a 7,000-mile yacht trip around Europe, and a 4,000-mile trek of Chinas centuries old Silk Road. Another first was Maldens sponsorship of the 1992 Winter Olympics by providing Polartec fabric for the official garments worn by U.S. athletes.

In another environmentally conscious move in 1993, Malden debuted a new line of upholstery (including cotton novelty prints in botanical, floral, and jungle motifs) and clothing fabrics made from recycled fibers. By the end of the year Polartec fabrics contained up to 15 percent recycled fibers, a figure Malden hoped to raise when availability increased and costs of recycled products were less prohibitive. Overall sales for the year climbed to $340 million, with Polartec and upholstery each accounting for half of Maldens sales, but Polartec pulling in most of its $10 million in profits. New products included undergarments for NASAs astronauts, booties for sled dogs racing in Alaskas Iditarod, and hopes for newfangled diapers.

In 1994 Malden hired a former leader of the states Fish and Wildlife Commission to spearhead their continuing environmental efforts. The company reduced consumption and added further reuse and recycling programs and was recognized by the American Textile Manufacturers Institute (ATMI) for environmental excellence and leadership in the textile industry. Exports to 60 nations worldwide now accounted for 20 percent of Maldens revenues, with total weekly fabric production exceeding 1.6 million yards. Annual research and development investments had risen to $20 million, with another $20 million spent on new computer-directed textile machinery, including looms and weaving equipment to keep operations steady and competitors at bay.

Unforeseen by Feuerstein and the staff at Malden Mills, 1995 would be a year of banner success and shocking tragedy. In February, Dakotah, a popular apparel manufacturer, was given exclusive license to launch and produce a new home accessories line of pillows and throws made from Polartec. Next came the first of a series of blows when the U.S. Consumer Products Safety Commission televised segments in March of fleece fabrics catching fire. Though the products shown on the air were made by Coville Inc. (which later recalled more than 150,000 fleece products), consumers began returning Polartec garments for fear of their flammability. Malden immediately sought damage control by launching a $8.5 million advertising campaign, stressing the companys rigid standards and the repeated passing of inflammability tests conducted by the government.

By May the company introduced Eco-Velvet, a new upholstery fabric made from recycled soda bottles, and most of its Polartec products now contained from 80 percent to 100 percent recycled fiber. For environmentally conscious consumers, Malden Millss fabrics were both a fashion statement and a political statement! In August, Malden announced several changes in the company: first, restructuring with newly appointed CEO Howard Ackerman (formerly vice-president) taking responsibility for running daily operations; second, integrating the home furnishings and apparel divisions to streamline production and share marketing and research and development staffing; third, funding additional promotion of Polartec fabrics (with projected sales hitting or surpassing $225 million for 1995); and fourth, building an $80 million European textile manufacturing plant in Gorlitz, Germany, as a companion to the companys distribution plant in Rotterdam by the end of the year.

The Gorlitz factory was expected to employ 150 and support extensive international sales to such companies as Berghaus, Jack Wolfskin, Lower Alpine, Schoffel, Silvy, and Japans Asics, Goldwin, and mont-bell, while cutting down on slow turnaround and the expensive tariffs placed on goods imported from the United States. The implemented changes were designed to make Malden Mills, with total sales exceeding $400 million in 1995, a billion-dollar company within five years. Theres no reason why we shouldnt hit $1 billion by the end of the century, Ackerman told the Wall Street Journal in November 1995. Unfortunately, something could keep Malden Mills from reaching its goalsa catastrophe that rocked the company a few months later.

On the evening of December 11, 1995, while Aaron Feuerstein was celebrating his 70th birthday among family and friends at a Boston restaurant, there was an explosion at Malden Mills. The explosion sparked a fire that swept through three of the companys nine buildings, injuring 33 night shift employees and causing an estimated $500 million in damages. Feuerstein rushed to the scene, refused to lose his composure, and vowed to rebuild. Three nights later, Feuerstein announced that Malden Mills would reopen on January 2, that he would pay all employees their regular salaries (at a cost of $1.5 million per week) for the next 30 days, possibly more, and that he would continue health benefits for 90 days. Several companies and local organizations, hearing of Malden Millss plight, immediately sent contributions to help rebuild and to support employees. Other responses ranged from U.S. President Clintons invitation to attend the State of the Union Address, to comparisons with George Bailey from Its a Wonderful Life, and the repeated use of words such as hero and mensch (a Yiddish term for a person of unquestionable honor and integrity).

Feuerstein hoped to have Malden Mills fully operational within 90 days and to have his diverse workforce (of British, Canadian, French, German, Irish, Israeli, Italian, and Portuguese men and women) back to their posts as soon as possible. Within days of his full-pay announcement, 80 percent of the Polartec division was on-line. By February, Feuerstein was still paying all employees and vowed to continue until at least the end of the month. With more than 70 percent of the workforce back on the premises, Feuerstein also announced that the construction outfit building the new Polartec facility was giving first preference to Maldens idle employees.

As the 1990s progressed, Malden Millss comeback was assured and many wondered if there would be a changing of the guard. Although Aaron Feuerstein said he planned to guide the company into the 21st century with success and work until the last minute of the last day, he had, characteristically, laid the groundwork for his two sons, Daniel and Raphael, to succeed him.

Further Reading

Curley, Tom, Mill Owners Heart Is Fabric of Mass. Town, USA Today, January 29, 1996, n.p.

Diesenhouse, Susan, A Textile Maker Thrives by Breaking All the Rules, New York Times, July 24, 1994, p. F5.

Jerome, Richard, and Sawicki, Stephen, Holding the Line, PEOPLE Weekly, February 5, 1996, pp. 122, 123-125.

Lee, Melissa, Malden Looks Spiff y in New England Textile Gloom, Wall Street Journal, November 10, 1995, p. B4.

Malden Unveils New Fleece Categories, Sporting Goods Business, March 1992, p. 11.

Performance Fleece Fabrics Force New Insulating Frontiers, Sporting Goods Business, September 1991, pp. 46-47.

P.R. for Polartec, Wall Street Journal, March 7, 1995, p. B9.

Rotenier, Nancy, The Golden Fleece, Forbes, May 24, 1993, p. 220.

Witkowski, Tim, The Glow from a Fire, TIME, January 8,1996, n.p.

Taryn Benbow-Pfalzgraf

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Malden Mills Industries, Inc.

MALDEN MILLS INDUSTRIES, INC.

American textile manufacturer

Founded: in Malden, Massachusetts, by Henry Feuerstein as Malden Knitting, 1906. Company History: Malden Knitting expanded to include Malden Spinning and Dyeing, 1923; provided U.S. Army uniforms during World War I and II; company moved to Lawrence, Massachusetts, 1950s; developed synthetic fabric (later named Polarfleece), 1979; betted heavy on fake fur and lost, 1981; Polarfleece products selling under Polartec label flourish, 1980s; clothed the U.S. Winter Olympics team, 1992; fire wiped out major operations, 1995; opened rebuilt state-of-the-art mill facility, 1996; closed upholstery division and satellite mill, 1998; settled suit against company, 2000; forced to declare bankruptcy, 2001. Awards: citation from President Clinton, 1996; Workforce Magazine Optimas award for Managing Change, 1997. Company Address: 46 Stafford Street, Lawrence, MA 01841.

Publications

On MALDEN MILLS:

Articles

"Performance Fleece Fabrics Force New Insulating Frontiers," inSporting Goods Business, September 1991.

Rotenier, Nancy, "The Golden Fleece," in Forbes, 24 May 1993.

Diesenhouse, Susan, "A Textile Maker Thrives by Breaking All the Rules," in the New York Times, 24 July 1994.

Lee, Melissa, "Malden Looks Spiffy in New England Textile Gloom," in the Wall Street Journal, 10 November 1995.

Herszenhorn, David M., "A Plume of Hope Rises from Factory Ashes" in the New York Times, 16 December 1995.

Witkowski, Tim, "The Glow From a Fire," in Time, 8 January 1996.

Jerome, Richard, and Stephen Sawicki, "Holding the Line," inPeople, 5 February 1996.

Teal, Thomas, "Not a Fool; Not a Saint," in Fortune, 11 November 1996.

Owens, Mitchell, "A Mill Community Comes Back to Life," in theNew York Times, 26 December 1996.

Goldberg, Carey, "A Promise is Kept," in the New York Times, 16September 1997.

Luscombe, Belinda, "Good Old Factory Values," in Time, 29 September 1997.

"Malden Mills Workers Sue Employer," in Claims, February 2000.

***

Henry Feuerstein, a Hungarian immigrant, bought a small mill in Malden, Massachusetts, in 1906. At Malden Knitting, Feuerstein set about making wool "workmen's" sweaters and bathing suits. His enterprise flourished and expanded, adding Malden Spinning and Dyeing in 1923 to produce uniforms for the U.S. Army throughout World Wars I and II. By the end of the World War II, Feuerstein's son Samuel had taken the reins of the company, and Malden Knitting had begun exploring new kinds of textiles to increase production.

In the mid-1950s the company moved to Lawrence, Massachusetts, and within a decade had opened several branch mills. Samuel was succeeded by his son, Aaron, who took Malden Mills into the future with automation and increased research into synthetic fabrics. Though going into fake fur proved a near-fatal blunder and the company was forced into Chapter 11 in 1981, Aaron Feuerstein and Malden Mills soon revolutionized the textile industry with a new product called Polarfleece. Originally created in 1979, Polarfleece was 100-percent polyester, capable of drawing moisture away from the body while providing warmth, and became the fabric of choice for high-performance athletic and aerobic apparel. Among Malden's first major customers was outerwear producer Patagonia, which ordered a myriad of garments made from the unusual shearling knit. Soon outfitters from across the country were bombarding Malden with orders.

With its Chapter 11 woes behind it and an incredible surge of business due to Polarfleece, Malden created several new lines of high-performance, technically advanced fabrics to service the outdoor crowd. Customized colors, thicknesses, and textures were made for clients, though imitators were many. By the end of the 1980s Malden Mills had expanded into Europe; by the end of the following decade Polarfleece, marketed and trademarked Polartec, was available in over 1,000 patterns, 5,000 colors, and 100 productsfrom underwear, bike shorts, and sweatshirts to jackets, wet suits, and gloves. Polartec was the industry leader; its Polarfleece was fast wicking, easily dyed, durable, partially made from recycled materials, and had one of the only nonpilling finishes. Clients like Eddie Bauer, Land's End, L.L. Bean, Ralph Lauren, and many others often based their entire outdoor or athletic collections on Polartec fabrics.

Malden began producing natural jacquard velvets in 1992, which were used in clothing as well as a number of upholstery applications, including furniture and car and infant seats. Sold the world over, the upholstery business rivaled the Polarfleece operations, but the latter initiated the Polartec Performance Challenge, sponsoring outdoor adventures like the Trango Towers Expedition in Southern Pakistan and a 4,000-mile trek in China. Malden also supported the 1992 Winter Olympics by providing Polartec fabric for the official garments worn by U.S. athletes.

Everything changed in 1995; the U.S. Consumer Products Safety Commission televised reports of fleece fabrics catching fire in March, and though the products were not Polartec, consumers across the nation began returning Polartec products. Malden fired a salvo of its own, launching a massive ($8.5 million) advertising campaign outlining the company's standards and its government inflammability tests (passed with flying colors). Not long after the company solidified plans for the textile manufacturing plant in Germany (as a companion to an existing Rotterdam facility), tragedy struck in December 1995. Aaron Feuerstein was celebrating his 70th birthday in a Boston restaurant when there was a tremendous explosion at Malden Mills. Fire swept through three of the company's nine buildings, injuring 33 employees and causing some $500 million in damage. Feuerstein had rushed to the scene and immediately vowed to rebuild; within a few days he had set 2 January 1996 as the company's reopening date. Feuerstein stated he not only would pay all employees their regular salaries for the next month or more, while continuing health benefits for the next three months during rebuilding, but would give all employees a small Christmas bonus.

Some called Feuerstein a saint; others a fool for not taking the insurance money and running. But most were so impressed, including Malden clients and neighboring businesses, that they too chipped in to rebuild and support the community's workers. All in all, it was a risky endeavor, but within three weeks the factory was reopened and half of Malden's workforce was in place. The new Malden Mills complex reopened in September 1996 and all was well for about a year. Then came the closure of its upholstery division in 1998, which had lost its footing after being completely destroyed. With a mild winter and an overseas recession that rocked the usually stalwart Polartec sales, Feuerstein was forced to close a satellite mill in Bridgeton and lay off hundreds of workers (who were, true to the Malden spirit, given generous severance packages).

The story of Malden Mills continued to be an eventful one; in January 2000, employees who had been injured in the 1995 fire bit the hand that had fed and clothed themsuing Feuerstein and the company for negligence. The employees had just days earlier settled an $18 million lawsuit against several Malden suppliers who they blamed for the fire. Malden itself had been cleared in a 22-month investigation by the Massachusetts Fire Marshal and in a similar investigation by the Industrial Accidents Board. Feuerstein and the disgruntled employees settled the lawsuit in December 2000; terms were not disclosed. Though Feuerstein valiantly tried to prevent it, Malden Mills was forced to declare bankruptcy in late 2001. Given the firm's history of rising from its ashes, hopefully this is another temporary lull from which Feuerstein and his employees would emerge anew.

Malden Mills will forever be remembered for two things: the generosity of Aaron Feuerstein and his unswerving belief in his company and its products. Polartec fleece products, which are now made from 100-percent recycled materials, revolutionized the textile industry and remain the fabric of choice among discriminating clothiers.

Owen James

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