Springs Industries, Inc.

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Springs Industries, Inc.

205 North White Street
Fort Mill, South Carolina 29716
U.S.A.
(803) 547-1500
Fax: (803) 547-3805

Public Company
Incorporated: 1887 as Fort Mill Manufacturing Company
Employees: 22,000
Sales: $1.88 billion
Stock Exchange: New York

Springs Industries, Inc. is one of the world’s largest producers of home furnishings, finished fabrics, and industrial textiles. It has 44 manufacturing facilities in ten U.S. states, Belgium, and England, and a minority interest in a joint venture in Japan. of its U.S. plants, 23 are in South Carolina. Its major brand names include Springmaid, Wamsutta, Custom Designs, Bali, Graber, Ultrasuede, and Ultraleather.

The company started in April 1887, when a group of 16 men organized Fort Mill Manufacturing Company to produce cotton cloth. The Northeast and Midwest were booming, and cotton manufacturing was seen as a way to industrialize and revive the depressed South. Samuel Elliott White, a local planter and Civil War veteran, was elected the company’s first president. Among the investors was Leroy Springs, a merchant who would become White’s son-in-law and a key force in the company’s development. The company produced its first yard of cotton cloth in February 1888. Its first annual report, in May 1888, stated that the plant had 200 looms and was producing 8,000 yard of cloth daily.

In 1892 many of the same investors started a second plant in Fort Mill. In 1895 Leroy Springs and others established another company, Lancaster Cotton Mills, of Lancaster, South Carolina. Toward the end of the century, with the Lancaster mills flourishing, Springs acquired control of the Fort Mill plants, which were experiencing difficulties, and other troubled cotton mills in Chester, South Carolina. The Lancaster operation expanded in 1901 and again in 1913 and 1914, when it was said to be the largest cotton mill in the world under one roof. In 1914 Leroy Springs led the establishment of Kershaw Cotton Mills in Kershaw, South Carolina.

Leroy’s son, Elliott White Springs, joined the company in 1919 after distinguished service as an aviator in World War I. According to the younger Springs’s biographer, Burke Davis, Leroy Springs ordered Elliott to learn the business without pay. It took Elliott Springs a while to settle into the business; several times he quit and came back. In these early years, Elliott Springs was more interested in both writing—his best-known work is War Birds, Diary of an Unknown Aviator—and social life than in textile manufacturing.

Leroy Springs seemed to lose interest in the business himself during the 1920s. He ran up debt and let the equipment run down; he also speculated in the stock market. In 1928 a disgruntled cotton buyer shot Leroy Springs in the head on a street in Charlotte, North Carolina. Springs recovered physically, but became emotionally withdrawn. Shortly before Leroy Springs’s death in 1931, Elliott Springs took over management of the company.

At this time, the family’s textile operations consisted of six plants with 5,000 employees. Elliott Springs—until then considered a playboy and a dilettante—led a dramatic revitaliza-tion of the business, which was suffering from the Great Depression as well as from Leroy Springs’s neglect. He negotiated with creditors to save the mills from foreclosure, went without salary for a period, and bought used but useful machinery at bargain prices to upgrade operations. In the fall of 1933, he bought a former J.P. Stevens plant in Chester, South Carolina. Also in 1933, Springs consolidated the various mill properties into a single company, Springs Cotton Mills.

In 1934 the United Textile Workers of America attempted to organize workers at the Springs mills. Elliott Springs allowed the union to address the workers at a company-owned baseball field in Chester. After the organizers had spoken, Springs mounted the platform and told the workers that if they went on strike, he would close the plants and take his family to Europe. The workers later voted unanimously against union representation.

During the 1930s the Springs facilities had been expanded and modernized, despite the Depression. With the arrival of World War II, Elliott Springs turned over the company’s entire production capacity to the military. Early in 1942 the company began manufacturing fabrics for a variety of military uses, including uniforms, tents, gas masks, and gun covers. All the Springs plants won awards from the U.S. Army and Navy for superior production.

The mills ran overtime, sometimes seven days a week, to keep up with wartime production. Elliott Springs feared this schedule would wear out the mills’ machinery, so he instructed one of his plant managers to buy and store every replacement part available—an effort that paid off when the mills resumed normal operations in 1945. At the close of the war, Springs began construction of a bleaching plant and moved the company into the production of finished fabrics and consumer products, such as sheets and pillowcases. Also in 1945, the company established Springs Mills, Inc. in New York as the sales organization for its products.

The company’s launch of the Springmaid brand of sheets and apparel fabrics in the late 1940s included a popular advertising campaign designed by Elliott Springs himself. Early ads included drawings of sexy, half-dressed young women and double-entendre copy. The best-remembered ad featured an American Indian brave lying exhausted in a hammock made of a sheet, with an Indian woman apparently rising from the same hammock. The caption read “A buck well spent on a Springmaid sheet.” Some called the ads tasteless, but the campaign did focus attention on the Springmaid brand.

Elliott Springs remained president of the company until his death in 1959. During his tenure, the assets of Springs Cotton Mills had grown to $138.5 million from $13 million. Sales had increased more than 19-fold, to $163 million, and the work force had nearly tripled, to $13,000. The company was the seventh-largest in the U.S. textile industry, but was the most profitable. H. William Close, Elliott Springs’s son-in-law, succeeded him as president. Close expanded and modernized many Springs facilities and built a new headquarters for the sales organization in New York in 1962. In 1965 the company inaugurated carpet production with a plant in York, South Carolina.

In 1966 the sales group merged with the manufacturing company, with the resulting entity named Springs Mills, Inc. The same year, the merged company went public, selling 675,000 shares at $17 each. Late that year, Springs Mills shares were listed on the New York Stock Exchange.

In 1967 Springs considered a merger with another textile firm, Collins & Aikman Corporation, but abandoned the plan because of what the companies termed “operational difficulties.” In 1968 Springs formed a new division to make and market knit fabrics; indeed, the 1960s and 1970s were a time of much diversification in Springs product lines. The company made a major conversion to production of cotton-synthetic blended fabrics, which had begun to outstrip cotton in popularity—in 1969, two major facilities were converted to blend production.

Springs hired its first nonfamily president, Peter G. Scotese, in 1969, with Close moving into the newly created post of chairman, which he held until he died in 1983. Scotese had been a vice president of Federated Department Stores and, before that, a vice president of another textile company, Indian Head, Inc. During Scotese’s tenure, Springs expanded via numerous acquisitions, including, early in 1970, the finished-goods division of Indian Head.

Late in 1970 the Justice Department sued Springs and four other textile makers, charging that the manufacturers conspired with wholesalers and retailers to stabilize the prices of their prime lines of sheets and pillowcases, in violation of antitrust laws. Springs agreed to a consent decree in which the company agreed not to engage in such practices, without admitting that it ever had. Fifteen years later, the Justice Department agreed to terminate the decree, citing a 1977 Supreme Court ruling that price-fixing is illegal only when intended to curb competition and legal in other circumstances.

In 1972 Springs became a partner in a joint venture to start a textile plant in Indonesia, P.T. Daralon Manufacturing Co. Early in 1973 it entered the frozen foods business, acquiring Seabrook Foods Inc. of Great Neck, New York, for about $34.5 million. In 1974 Springs sold its three terry-cloth-production plants to J.P. Stevens Inc. and discontinued operation of its carpet division at York, which had been unprofitable since its inception in 1965. Springs sold the facility to Cannon Mills Company in 1975. The Indonesian plant went into operation in 1975, but failed to generate enough revenue to maintain working capital; the unit’s creditors had to defer interest and other payments. The following year, Springs sold its interest in the venture. Springs continued updating and modernizing its plants closer to home in the late 1970s, but also got out of another unprofitable business by closing the knit division in 1978. In 1979 Springs acquired Lawtex Industries, a maker of textile home furnishing products, for $15.4 million plus the assumption of $13.5 million in liabilities, and Graber Industries, Inc., a manufacturer of blinds, shades, and other window decorating products, for $38.5 million.

Walter Y. Elisha succeeded Peter Scotese as president of Springs in 1981; like Scotese, Elisha came from the retail sector. After Close’s death in 1983, Elisha became chairman of the company. In 1981 and 1982, Springs closed several Seabrook units and sold others. Also in 1982, the company adopted its present name, Springs Industries, Inc.

Springs made a major acquisition in 1985—M. Lowenstein Corporation, a New York textile maker that, like Springs, had been in business since the 19th century. The acquisition brought Springs the Wamsutta brand of household goods and an entry into the premium-priced bedding market and the industrial fabrics business through Lowenstein’s Clark-Schwebel unit. The cost of the acquisition was about $265 million.

During the late 1980s Springs intensified its diversification away from the apparel-fabrics business, where foreign competition was strong. It refocused on industrial fabrics and home furnishings. In the former category, it purchased the fiberglass-weaving and -finishing operations of United Merchants & Manufacturers Inc. for about $60 million in 1988, and in the latter, it acquired Carey-McFall Corporation, a maker of window shades and blinds, for about $35 million in 1989. Springs’s finished nonindustrial fabrics business declined to 26% from 52% of total sales from 1980 to 1990; about half of those sales were to U.S. apparel manufacturers.

Company officials said they would continue to serve domestic apparel markets that provided adequate returns, but predicted that growth would come from the industrial fabrics and home furnishings businesses. In 1990 provisions for restructuring of operations—such as converting or closing finished fabrics plants—resulted in Springs reporting its first loss, 39C per share, in its 25 years as a public company. Springs officials noted, however, that earnings before restructuring charges were $2.07 per share, reflecting strength in certain areas of the business.