Word: woolen
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Dates: during 1950-1959
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Last week Royal Little crashed through the wall. At meetings in Boston and New York, stockholders of American Woolen, as well as those of Robbins Mills, overwhelmingly approved a merger with Textron. With 13,600 workers and 43 textile and other plants, the new Textron American, Inc. will be the sixth biggest textile company in the U.S. It will have $160 million in assets, and estimated 1955 sales of some $180 million. On top as chairman will sit Little; his president will be Robert L. Huffines Jr., president of Robbins; Joseph B. Ely, onetime governor of Massachusetts...
Unbeatable Combination. That year was filled with fights, recriminations and adjourned stockholders' meetings as American's management tried to keep its own identity. Little finally settled the matter by buying American Woolen common stock with Textron cash and preferred stock, until he had 47% control. Meanwhile, he had also acquired 42% control of Robbins Mills, a synthetics producer with modern machinery...
...surface, American Woolen was far from a prize catch. Once the powerhouse of the woolen industry, it saw its sales plummet in two years from $253 million to $73 million in 1953. In the past three years its losses have totaled more than $30 million. Only recently did it make a halfhearted attempt to get into synthetics; its northern plants are antiquated and its invasion of the South consisted of buying an old tobacco warehouse and an ancient mill. But Royal Little's reasons for wanting American were plain: it has $28 million in working capital...
...combined business of $339 million, have been hardest hit of all, seen their overall profits slump by 65%. Partly, the industry blamed its trouble on high costs and consumer resistance. But mostly it is due to a technological revolution in rugmaking that has left the old leaders and their woolen rugs far behind...
China & Cotton. The changes are the price of survival for the old leaders. For years the biggest firms made only three standard types of carpets, all of them woolen and all on looms. The grades ranged from a low-price Axminster weave to a more expensive velvet weave, and a Wilton weave, costliest of all. The best wool for these rugs came from China, India and Pakistan. But in 1950 China slapped an embargo on all wool exports; India and Pakistan followed with stiff quotas on shipments, thus cutting off nearly 30% of the best grade of U.S. wool imports...