Butterick Co., Inc. History

Address:

161 Avenue of the Americas
New York, New York 10013
U.S.A.

Telephone: (212) 620-2500
Fax: (212) 620-2746

Website: www.butterick.com

Private Company
Incorporated: 1902
Employees: 1,000
Sales: $110 million (1996 est.)
SICs: 2721 Periodicals: Publishing, or Publishing & Printing; 2741 Miscellaneous Publishing; 2771 Greeting Cards

Company History:

Butterick Co., Inc. produces and sells patterns for the home sewing of women's and girls' clothing and publishes magazines in which these patterns appear. These patterns and periodicals are found in sewing centers and department, variety, and piece-goods stores. Butterick also prepares and publishes greeting cards.

Butterick to the Great Depression

Ebenezer Butterick, a tailor in Sterling, Massachusetts, was the father of a baby boy in 1863, when his wife, fashioning a dress for the infant at her sewing table, remarked how much easier it would be if she had a pattern to go by that was the same size as her son. There were patterns that served as a guide, but they came in one size only, and the sewer had to grade (enlarge or reduce) the pattern to the size needed. Ebenezer experimented with the idea of graded patterns and discovered that tissue paper was ideal to work with and much easier to package than the heavy cardboard templates he first created.

The first graded sewing patterns were cut and folded by members of the Butterick family and sold from their home. In no time they needed extra space and expanded, first into an adjoining house and then to a larger house in Fitchburg, Massachusetts. In the next year they established quarters in New York City. Butterick first specialized in men's and boys' clothing but in 1866 began to manufacture dress patterns. Soon the women's line included dresses, jackets, and capes in 13 sizes and skirts in five sizes. By 1873 Butterick was selling some six million patterns a year, at 25 cents each.

By 1876 the firm (then called E. Butterick & Co.) had 100 branch offices and 1,000 agencies throughout the United States and Canada. Butterick patterns also had made their debuts in London, Vienna, Berlin, and even Paris, the international center of fashion, where more patterns were sold from the Butterick Shop than anywhere else in the world. Corporate headquarters were moved in 1903 to the new 16-story Butterick Building in what is now known as Manhattan's Soho district. Butterick was now one of the largest manufacturing concerns in the industry, and the building, constructed expressly for the firm and featuring interiors designed by Louis Tiffany, housed the largest printing plant in the world except for the Government Printing Office in Washington, D.C.

Inside the Butterick Building, which employed some 2,000 workers, merchandisers brought ideas fresh from the latest European designer showings. New styles were made up in muslins, scrutinized for line silhouettes and fashion, and also for practicality and suitability to the company's customers. After the season's styles had been chosen, patterns were created, graded into sizes, printed on tissue papers, and cut, folded, and inserted into envelopes, complete with instruction sheets. These patterns sold for ten or 15 cents each. For use in magazine articles and advertisements, garments were constructed, sketched with pen and ink, and engraved for colored fashion plates.

Butterick entered the magazine business in 1867 in order to showcase its patterns and induce women to order patterns by mail. The Delineator, founded in 1873, evolved into a service magazine with general topics of interest to women as well as fashion news. This magazine, which included articles by Edith Wharton and Rudyard Kipling, and two other Butterick periodicals had a combined circulation of about 1.3 million in 1907, when novelist Theodore Dreiser became editor of all three. Among Dreiser's innovations was a column on baby care; when the doctor assigned to contribute the pieces proved inadequate, Dreiser hired bachelor H. L. Mencken to ghostwrite them. The Butterick stable expanded in 1909, when the firm acquired Ridgway Co. and its thriving Everybody's Magazine, whose contributors included Lincoln Steffens and Walter Lippmann.

A public company, Butterick had net income of $516,593 in 1913 but soon began to exhibit signs of malaise. It paid out its last dividend on common stock in 1916, except for a single dividend in 1926 that was mostly in stock rather than cash. Sales peaked at $15.9 million in 1922 and net income at $729,162 the following year. Sales volume had dropped to $10.9 million in 1929, just before the onset of the Great Depression. The company lost money in 1932, 1933, and 1936, and probably also in 1934 and 1935, years concerning which no figures were released.

Gradual Resurgence, 1936-67

Effectively bankrupt, Butterick was reorganized in 1936. Many of its publications, including the Delineator, which was accounting for one-third of company sales, were sold in 1937. The company also sold its building, where it continued to lease space, for $3 million. With its expenses reduced, Butterick was in the black, although barely, in 1937, 1938, and 1939, but in 1940 it lost $123,729 on sales of only $2.1 million. The number of company employees had dropped to fewer than 500. Butterick still published a few fashion magazines and Progressive Grocer, a trade magazine. Its presence remained strong, with branches in principal cities of the United States and in Toronto, Canada, and publishing subsidiaries in Great Britain and Australia.

Butterick's sales volume fell as low as $1.7 million in 1942, when it lost money for the third consecutive year. However, despite the shortage of cloth for civilians due to World War II, the war years proved good for the company. The diminished stock of ready-to-wear goods resulted in a boom in home sewing and, consequently, a sharp increase in demand for patterns. Butterick focused on classic styles and, in the interest of conserving cloth, patterns with fewer pieces. Shorter lengths were adopted for both jackets and skirts, and details such as buttons, trims, and appliques were kept to a minimum.

Butterick's sales reached $3.1 million in 1948. By then the company had decided it needed new quarters for manufacturing, stock, and shipping. It purchased advanced printing equipment, including full-color presses, for a new manufacturing plant in Altoona, Pennsylvania. The first full-color photograph appeared on the cover of the company catalog in 1950. Another factory was located in Toronto. The 1950s was a decade of steady sales growth although only modest profit for Butterick. During this decade subsidiaries were established in Italy, New Zealand, and South Africa. Sales reached a new high of $8.3 million in 1960, but net profit was only $121,856.

In 1961 Butterick purchased the patterns division of Condé Nast Publications, Inc., and licensed the name and trademark "Vogue Patterns" from Condé Nast. This purchase for stock made Condé Nast a substantial stockholder in Butterick. Vogue Patterns dated from 1905. In the early days Vogue magazine readers purchased a pattern by clipping a coupon and mailing it in along with 50 cents. By 1913, when the name was changed to "Vogue Pattern Service," it comprised a major segment of the publication, and by 1917 the patterns were selling in major department stores. By 1920 the Vogue Patterns business had become so extensive that the patterns no longer appeared in Vogue but were featured instead in their own publication, Vogue Pattern Book. In 1949 Vogue Patterns became the only pattern company licensed to produce designs from the world's leading couturiers, establishing a precedent that continued into the late 1990s.

The acquisition of Vogue Patterns, which maintained its own staff of merchandisers, designers, artists, and editors, swelled Butterick's sales by about $5 million a year, moving it into second place in the patternmaking industry, behind Simplicity Pattern Co. The Butterick and Vogue services were not competitive, because Vogue's patterns were high-style and relatively high-priced--75 cents to $3.50 apiece--while Butterick patterns were being produced for the mass market and ranged in price from 40 to 75 cents. However, after the merger management eliminated duplicate manufacturing in the United States, Canada, England, and Australia, and it closed Vogue distribution branches in San Francisco, Toronto, and Memphis. The servicing of customers was now handled entirely through Butterick's main plant in Altoona and the six branches in the United States and Canada.

Butterick also was establishing thousands of sewing centers selling the firm's patterns, needles, thread, buttons, zippers, and other sewing "notions" in supermarkets. More than 3,000 such units had been established by May 1962. All told, the company now was distributing 1,400 pattern styles, in five sizes, through some 10,000 outlets. About 20 percent of its business was being conducted overseas, notably in the four countries where it had subsidiaries.

Butterick's dealings at this time with retailers such as department stores normally rested on a five-year contract stipulating that the dealer would purchase an initial stock of patterns and also an average, fixed-dollar amount of new ones each month. As the products were sold, the dealer ordered replacements from the company. Since styles changed, at periodic intervals Butterick would classify certain patterns as discards, allowing dealers to return its stock of discards at 90 percent of the wholesale price. About one-third of gross pattern sales involved such discards.

Further Changes, 1967-92

By 1967 Butterick's patterns, under its own or the Vogue name, were being sold in about 12,000 stores. In 1966, its last full year as an independent public company, Butterick had net profit of $1.1 million on sales of $20 million. It was purchased in 1967 by American Can Co. and became a subsidiary renamed Butterick Fashion Marketing Co. Butterick's two pattern magazines had a combined circulation of four million in 1969. Progressive Grocer was sold to Maclean Hunter Media Inc. in 1981.

The 1960s were widely regarded as a boom period for home sewing. The market was said to comprise more than 40 million of the nation's female population in 1967, with these self-styled seamstresses turning out an average of 27 garments apiece each year. Four out of five teenage girls were sewing, making almost 70 million pieces of clothing a year, according to a Barron's report. In 1971 a Forbes article claimed that of the 82 million U.S. females between ages 12 and 65, an estimated 44 million now sewed, and that the proportion was rising each year. Home sewing was said to be a $2.3 billion market in 1970. But this revival of home sewing seems to have been overblown, for a 1992 Forbes article declared, "In the 1970s schools stopped teaching sewing and women began joining the work force in large numbers, leaving their sewing machines to gather dust."

In the early 1980s makers of home sewing machines, patterns, and fabrics were again speaking of a revival of the craft. Enormous catalogs with patterns for 700 styles or more and frighteningly complex instructions were said to have intimidated potential customers, so to make things easier Butterick in 1980 introduced a See & Sew line of only 96 styles, with fewer pattern pieces, only one view of a finished dress to consult, and instructions that allowed for a graded fit. The price was only $1.19 each, compared to the $2.75 pattern average. By late 1982 See & Sew was accounting for about seven percent of the more than 100 million patterns sold annually in the United States. Vogue revived publication of an earlier knitting magazine in 1982.

Butterick's management purchased the company from American Can in 1983 in one of the first leveraged buyouts of the decade, paying, according to Forbes, $12.5 million, of which all but $500,000 was borrowed. The company, which had annual sales of somewhere between $55 million and $70 million at the time, assumed a high level of debt. Its response was to cut costs, firing employees, reducing inventory, and eliminating all of the six printing and distribution plants except the main one in Altoona, where all these operations were consolidated. The new owners paid off their acquisition loan within two years and in 1988 sold about 60 percent of the company to Robert Bass's Acadia Investors for about $90 million.

Butterick also took out new loans to invest in computerized design systems and thereby reduce by more than half the time it took to market a new pattern. Speed was important because popular high-fashion styles were being appropriated and falling out of fashion so quickly. After Butterick shored up its Vogue line with quick release of high-fashion style patterns it raised its profile at the lower end of the market. Between 1988 and early 1992 the company nearly doubled the total number of less-expensive patterns it was introducing. Butterick supplemented its two sewing magazines, Butterick Home Catalog and Vogue Patterns, plus Vogue Knitting International, by adding four new titles, including Weddings and Fine Sewing, to enhance its efforts in niche markets.

Searching for ways to offset a decline in pattern sales, the company chose greeting cards, because like patterns, they were paper-based consumer products aimed at women. Butterick purchased four companies between 1986 and 1992 for a total of $7 million to $8 million. Some of Butterick's cards were beautifully crafted, retailing for as much as $7 each, and sales from greeting cards grew from $11 million in 1985 to about $24 million in 1992. However, this sector of business failed to produce the profits and cash flow that the company had hoped for, so to reduce costs it consolidated three Chicago plants in 1992 and began farming out printing to outside vendors.

Patterns remained Butterick's main business in 1992, accounting for $95 million of the company's $120 million in annual sales. Profit figures were not released. According to a Crain's New York Business article, the company was still saddled with about $50 million in senior debt. Nevertheless, it was better off than its rivals, Simplicity and McCall Pattern Co., which each held, along with Butterick, about a third of the domestic patterns market. Simplicity had changed hands four times in about a decade and had defaulted on notes, while McCall had been bought and sold twice before falling for a time into bankruptcy in 1988 after also defaulting on notes.

William P. Wilson was the first chief executive officer of privatized Butterick. He was succeeded in 1988 by John Lehmann, previously the company's head of international divisions. Lehmann, who held ten percent of Butterick in 1992, was still its president in 1996.

Butterick Co., Inc. History

Company History:

Further Reading: