American & Efird, Inc.
American & Efird, Inc.
22 American Street
Mt. Holly, North Carolina 28120
Telephone: (704) 827-4311
Toll Free: (800) 453-5128
Fax: (704) 827-2060
Web site: http://www.amefird.com/
Wholly Owned Subsidiary of Ruddick Corporation
Incorporated: 1891 as Nims Manufacturing Company
Sales: $319.7 million (2005)
NAIC: 313113 Thread Mills
A subsidiary of Ruddick Corporation, American & Efird, Inc., (A&E) is a Mt. Holly, North Carolina-based company that manufactures and distributes sewing thread to the industrial and consumer markets.
Industrial products include heat resistant thread with high tensile strength; thread packaged on bobbins for use in making bedding, furniture, footwear, leather products, and other industrial applications; cotton threads used in garment sewing; thread with a polyester core and cotton wrapped for garment sewing; thread spun from Tencel fiber for garments that will be over-dyed and enzyme washed; abrasive-resistant thread used in automotive trim, quilts, furniture, and footwear; polyester-based threads for applications that require resistance to chemical treatment, ultraviolet radiation, mildew, or abrasion; and specialty engineered yarns. The industrial products division also offers the Anesyst Web-based order management system to help customers order thread and track shipments. A&E's consumer product division produces thread for home sewing, and notions, including zippers, hook and loop tape, and polypropylene webbing.
The company maintains eight manufacturing plants in North Carolina, two in Pennsylvania, and one in New Jersey, with operations in 18 countries around the world and majority-owned joint ventures in the Dominican Republic, Haiti, and China.
19TH CENTURY ORIGINS
American & Efird was founded by Charles Egbert Hutchison, born in North Carolina in 1860, the son of a farmer who after the Civil War decided to keep a general store in the town of Woodlawn, North Carolina. The younger Hutchison joined his father in business but became increasingly interested in the textile industry that was emerging in the area. When he was 29 he took the jump, acquiring the Mt. Holly Knitting Factory in 1890, renaming it Albion Manufacturing Company and converting the plant from knitting to spinning. A year later, in May 1891, he arranged a meeting of some of the area's most prominent businessmen to discuss the formation of a new cotton mill corporation. Six of them became principals in what would be called Nims Manufacturing Company, so named because the water-powered plant was to be built at Nims Shoals On Dutchman's Creek one mile north of Mt. Holly. In addition to Hutchison, the investors were Luther Nims, R. Kel Davenport, Martin R. Dewstoe, J. Alonzo Abernathy, and John C. Rankin.
Initially the Nims Mill produced seine twine, hawser, and cable cords, all crude products, but the business grew ever more sophisticated. A second mill was built in Woodlawn in 1905 and began producing spun yarns. A third operation was acquired in 1910, the Mountain Island Mill, which manufactured a variety of twines, powered by the Catawba River. The deal also included a cotton gin, grist mill, and an entire village. Unfortunately, all would be swept away several years later in a massive flood. Nims continued to grow, however. In 1916 the first of a pair of manufacturing plants flanking a railroad track in Mt. Holly opened. The "Adrian" plant was followed by the "Madora" plant in 1922. Together they would process raw cotton to produce combed yarns. In between their construction, Nims acquired the Alsace Manufacturing Company in 1918 and renovated it, and in that same year built another plant in town, the American Processing Company. It was one of the first facilities in the United States, and the first in North Carolina, to mercerize yarns, shrinking them to add strength and improve the ability to receive dyes by immersing them in a cold solution of caustic soda. In the 1930s the plant would add other processing capabilities, including gassing, bleaching, and tinting.
AMERICAN YARN AND PROCESSING COMPANY FORMED: 1920
In 1920 Hutchison and some investors acquired Maiden, North Carolina-based Union Cotton Mills to add further combed yarn production. Hutchison decided to consolidate all the mills in which he held investments. Because he was the only common investor in all of them, they had become known as the Hutchison Group of Mills. In July 1920 they were combined together to form a new corporation, American Yarn and Processing Company, as Hutchison and three investors bought all the stock of the six different Hutchison mills. As a result, decision making was streamlined and the accounting of the businesses was consolidated. Moreover, Hutchison could leverage the size of American Yarn to forge plans to open offices outside of North Carolina, as well as expand beyond the production of combed cotton yarns to the manufacture of fabrics and knit goods.
Within a few years, thoughts of expansion would be replaced by concerns about mere survival, as the great Depression ushered in by the stock market crash of 1929 led to the closure of many textile mills. American Yarn was in better shape than most and was able to scrape by, but not without being forced to shut down the original Nims plant, which was no longer economically viable to operate. Like most of American industry, textiles did not recover until the advent of the United States' entry into World War II in late 1941 when military spending spurred the economy. Less than a year later, American Yarn would have to contend with an upheaval of a different sort: the death of its long-time leader, Egbert Hutchison.
Well aware that his health was failing, the 82-year-old Hutchison took steps to ensure the future of American Yarn and protect its investors and employees. He traveled to Charlotte, North Carolina, and met with several investment bankers before settling on one to purchase his controlling interest in the company, which he sold to R.S. Dickson Company for $2.5 million. In the process he also handpicked his successor: the head of the investment bank, 47-year-old Rush Smith Dickson. Born in South Carolina, Dickson grew up on a farm but turned to a business career rather than take up the plow like his father. He worked as a bookkeeper for mill owners and began making investments in the textile industry. This led to his development as an investment banker specializing in textiles. Well connected in North Carolina, he was able during the Depression to supply New York bond houses with the kind of information they needed to determine credit worthiness. As a result, he was greatly responsible for the survival and growth of the textile industry during this difficult period.
Though we are one of the world's foremost manufacturers of sewing threads and industrial yarns, it is neither the number or scope of our international operations that makes American & Efird a world-class company. That distinction comes from our dedication to providing our customers with the finest possible products and services. At A&E, quality is the thread of continuity.
With the war driving demand for textiles of all types, A&E operated its plants at capacity and resumed expansion. Under Dickson's leadership, the company became more than a knit yarn company, adding the manufacture of thread yarns to its capabilities. The two plants of the Whitnel Cotton Mill Company were acquired in 1943. They were almost entirely devoted to the production of socks and underwear for the military. In that same year, American Yarn completed its first acquisition outside of North Carolina, buying Lawrenceburg, Kentucky-based Dean & Sherk, a former customer that produced industrial threads used to make boots for soldiers. In order to produce outerwear using the yarns its plants produced, American Yarn in 1944 opened the Holly Knit Plant in Mt. Holly. To dye the knitted goods produced by this operation, in 1946 the Holly-Knit Finishing Plant was added.
The demand for textiles was so great during the war years that the old Nims plant, shuttered for 14 years, was put back into use by Efird Manufacturing. The relationship with Efird would become even closer in 1947 when American Yarn acquired a controlling interest in the company to further expand its yarn offerings. Efird had been founded in 1896 in Albemarle, North Carolina, by brothers Polycarp Efird and John Efird, who grew the business to include five mills. In May 1952 American Yarn and Efird were formally merged to create American & Efird, Inc.
The 1950s brought a period of expansion and modernization. The Albion Knitting company was acquired in 1950, and shortly after the Efird merger, the five Efird plants were consolidated and upgraded, and at the end of the process three plants remained. By the close of the 1950s, A&E was operating 15 plants. Working together they were capable of turning raw cotton into finished goods. The business was divided among three divisions: the Sales Yarn Group, the Thread Division, and the Finishing Division.
HOLDING COMPANY FORMED: 1968
A&E's growth continued into the 1960s as sales grew to more than $40 million. Expansion was fueled by the financial backing of R.S. Dickson Company. A&E reached another turning point in September 1966 when Dickson died. Control of the investment firm passed to Dickson's oldest son, Stuart Dickson, while another son, Alan Dickson, assumed control of A&E. Because two of the A&E shareholders wanted to sell out and A&E was in need of capital, the Dickson brothers considered merging A&E with a Philadelphia investment firm, but in the end decided to join A&E with R.S. Dickson Company, the latter to provide the company with the necessary capitalization. Thus, in 1968 the Ruddick Corporation was created to serve as A&E's holding company. Ruddick soon gained a listing on the New York Stock Exchange, and in addition to A&E it added a second subsidiary in 1969 by purchasing the Harris Teeter supermarket chain.
- Charles Egbert Hutchison forms the Nims Manufacturing Company.
- Hutchison mills merge to form American Yarn and Processing Company.
- Hutchison dies.
- American Yarn merges with Efird Manufacturing to form American & Efird, Inc.
- Ruddick Corporation becomes A&E's holding company.
- Grove Thread Company is acquired.
- A&E begins producing home-sewing thread.
- Foreign sales exceed domestic sales for the first time.
The 1970s were a time of change in the textile industry, which experienced a period of consolidation and increasing competition from foreign companies. One of A&E's long-time customers, Union Underwear, began buying its own mills and then made an offer for the Efird mills in Albermarle. It was at this point that A&E's management realized it had to focus its resources in order to ensure future growth, and it elected to cast its lot with the production of thread, an area in which it had always been a bit player. Company personnel visited all of the major thread plants in the country and A&E then began to convert some of its plants to thread production, counting on A&E's workforce to find ways to improve productivity and give the company an edge over the entrenched competition. A&E also gained much needed expertise in 1978 through the acquisition of Grove Thread Company. Around this time, A&E received a major break when Levi-Strauss, a minor customer over the years, decided to contract with A&E to supply the thread it needed in Hong Kong. The deal was facilitated by Levi's new director of international operations, a close friend of A&E's Director of Thread Sales. This contract opened the way for further expansion overseas, as A&E began supplying thread to a Levi's plant operating on the Chinese border, followed by Scotland, Brussels, Australia, and New Zealand operations. Initially A&E established warehouses as it followed Levi's, but factories would follow, as would distribution centers. A&E then began supplying other manufacturers doing business in foreign countries. To fill out its capabilities overseas, A&E began making acquisitions. For example, the Little Box Company, a Hong Kong thread company, was purchased. A distribution point established in England to serve Levi resulted in the 1980 acquisition of H. Greenberg, Ltd., a thread dye business located close to Manchester. Other foreign investments in the 1980s included a joint venture in Singapore, the purchase of Canada's second largest thread company, Allied Thread, and the building of dyeing and finishing plants in Korea.
A&E did not neglect its domestic operations in the 1980s, however. Business was thriving, and an increase in production requirements led the company to replace its traditional manual winding operation with new automated sewing thread winders. A&E also beefed up its capabilities by acquiring the Delta Thread dyeing plant from SCT Yarns, Inc., in 1988. By 1990 the company was generating nearly $200 million in sales.
INTO THE FUTURE: 1990 AND BEYOND
A&E continued to improve productivity and streamline its operations while expanding its product offerings. In 1991 the company's dyeing and finishing divisions were consolidated into a single manufacturing division. The company also continued to rely on the input from workers to improve production, following what management called "the 20-foot rule." Simply put, it meant that anyone working within 20 feet of a process was deemed an expert on that particular subject, regardless of formal education, and took part in any decision related to it.
In 1993 A&E moved into the home-sewing thread market, taking on the dominant player in the field, Coats & Clark, which enjoyed an 85 percent market share. A&E's Signature line of consumer thread was not an immediate threat to Coats & Clark, but management was hoping to carve out a 15 to 20 percent share of the $60 million-a-year home-sewing market. The new business helped A&E to approach $300 million in sales in 1995.
A&E continued its pattern of growth as the second half of the 1990s began. In July 1996 it completed the acquisition of Dixie Yarns Inc. and its four manufacturing plants in Gastonia, North Carolina. A&E then expanded its product range, global reach, and client base in 1999 with the acquisition of Hicking Pentecost PLC, a United Kingdom company that produced thread in the United States, China, Northern Ireland, Italy, Hong Kong, and South Africa. However, A&E also elected in 1999 to shut down its operations in Korea, where business conditions had deteriorated. Business was soft elsewhere in the world as well, leading to a dip in sales after the company had posted a record $355 million in revenues in 1997.
A difficult environment continued into the new century. The U.S. apparel, textile, and home furnishings industries suffered from foreign competition that enjoyed lower labor costs, and as a result A&E's domestic sales eroded, forcing the company to look for opportunities overseas, in particular, Latin America, the Caribbean basin, Africa, China, and other Asian countries. In fiscal 2000 34 percent of A&E's total revenues of $349.9 million came from overseas, as opposed to 29 percent in fiscal 1999. Although net sales were less than the $351.6 million posted the year before, A&E was still able to maintain operating profits. That situation would not hold true in 2001, however, when sales continued to slide to $326.5 million and operating profits fell from $47.4 million to just $21.6 million.
To meet the challenge, A&E began closing U.S. plants and reducing jobs while continuing to expand its overseas' business. Net sales continued to fall, reaching $294.5 in fiscal 2002 and bottomed out at $293.1 million a year later. Fiscal 2003 also marked the first time that foreign sales accounted for more than half of total revenues at 52 percent. The trend continued in fiscal 2004 when sales improved to $296.2 million. To grow its foreign business, A&E forged joint ventures in China in 2003 and Brazil in 2005.
A&E was not, however, giving up on domestic sales. Instead, it looked to increase the non-apparel thread business. In 2004 A&E acquired Synthetic Thread Company, Inc., maker of threads and specialty engineered yarns used in the production of canvas products, leather goods, luggage, and bedding. In 2005 A&E added Ludlow Textiles Company, Inc., another manufacturer of threads and non-apparel yarns used in the production of non-apparel goods. Further diversification in non-apparel fields included the August 2005 acquisition of Robison-Anton Textile, Co., maker of value-added embroidery threads sold in the United States and throughout the world. A&E was clearly on the rebound as sales jumped to $319.7 million in 2005 and operating profits improved to $113.6 million.
Industrial Products; Consumer Products.
Coats Holdings Ltd.; Coats North America, inc.; Stowe-Pharr Mills, Inc.
"American & Efird Merges Two of its Divisions," Daily News Record, October 24, 1991, p. 9.
Clune, Ray, "An Educated Work Force Is American & Efird's Best Tool," Daily News Record, November 25, 1998, p. 12.
McAllister III, Isaaca, "American & Efird Winds Up A Winner," Textile World, November 1994, p. 47.
Snow, Katherine, "American & Efird Expands," Business Journal Serving Charlotte and the Metropolitan Area, November 23, 1992, p. 1.
Yockey, Ross, A Century of Quality, Charlotte, North Carolina: McMillan and Associates, 1991, 144 p.