Carhartt, Inc. History

Address:

Three Parklane Boulevard
P.O. Box 600
Dearborn, Michigan 48121
U.S.A.

Telephone: (313) 271-8460
Fax: (313) 271-3455

Private Company
Incorporated: 1884 as Hamilton Carhartt and Co.
Employees: 2,520
Sales: $307 million (1998 est.)
NAIC: 315211 Men's & Boys' Cut & Sew Apparel Contractors; 315191 Outerwear Knitting Mills

Company Perspectives:

Carhartt has supported the American worker for over 100 years. We have provided rugged, durable clothes for the men who built the railroads that cross our nation and to those who now construct massive skyscrapers. From farmers to ranchers to the outdoor enthusiast, Carhartt remains the choice brand for those who work or play in the outdoors.

Company History:

Carhartt, Inc. is a leading U.S. producer of workwear--overalls, jeans, coveralls, jackets, and other items--favored by those in the construction and farming industries. During the 1990s workwear became fashionable, as popular rap music artists and hip-hop bands started wearing Carhartt clothes. Despite the broader appeal of Carhartt clothing, the company continued to regard its most important customer as the American worker, who preferred Carhartt clothes, even though they were typically priced higher than other work clothes, because they proved durable, comfortable, and easier to clean. In the late 1990s, the company's garments were sold chiefly at smaller retail outlets catering to blue-collar men. However, Carhartt was also available in limited quantities in such department stores as J.C. Penney, Meijer, and Sears. Facing challenges in meeting consumer demand, Carhartt maintained a selective distribution policy in order to handle the growth of the business.

Early History

The company's founder, Hamilton Carhartt, was born in Macedon Locks, New York, in 1855 and was raised in Michigan and Wisconsin, where his father, Dr. George Carhartt, was a physician and surgeon. Although his family distinguished itself mainly in the learned professions, Hamilton Carhartt had an interest in commercial pursuits. He left school in 1882 to enter the furniture business, first in Grand Rapids, Michigan, and then, in 1884, in Detroit.

There Carhartt established a wholesale furniture business under the name Hamilton Carhartt & Co. In 1889, he converted the business from home furnishings into one devoted exclusively to manufacturing apparel for working men. His first products were overalls made of duck--a tightly woven cotton fabric--and denim fabrics for men working on and building the railroads.

In 1905 the business was incorporated as Hamilton Carhartt Manufacturer, Inc.; it was reincorporated as Hamilton Carhartt Cotton Mills in 1910. By this time Carhartt had grown to include two mills in South Carolina and Georgia, as well as plants in Atlanta; Detroit; Dallas; San Francisco; Walkerville, Ontario; Vancouver, British Columbia; and Liverpool, England. The Walkerville plant was devoted to the manufacture of gloves.

By 1925 Carhartt had established a new plant in Paris and had an office and warehouse in New York City. A third mill was operating in Alabama. Hamilton Carhartt Junior--Manufacturer, a subsidiary specializing in young men's working apparel, had operations in Los Angeles and Philadelphia. The company was producing work clothing, overalls, shirts, hunting wear, pants, and shoes.

1920s-30s: Economic Downturns

The Cotton Depression of the 1920s and the Great Depression of the 1930s resulted in Carhartt losing all of its locations except its plants in Atlanta, Detroit, and Dallas. Moreover, the firm sold off its rights to sell in Texas, most of the southern states, and in southern California, Europe, and Canada. Carhartt unsuccessfully attempted to launch a sportswear line during this time.

With the assistance of the people of Irvine, Kentucky, a new plant was completed at the beginning of 1932 for just over $35,000. The new facility employed 20 people when it opened. In 1937 Hamilton Carhartt, age 82, was killed in an automobile accident; his son Wylie Carhartt assumed control of the corporation.

Despite economic challenges, the Carhartt firm had a solid reputation for quality clothing. It had built this reputation for durable work and outdoor clothing by using heavyweight 100 percent cotton duck for most of its products. The tightly woven material provided strength and durability as well as wind and snag resistance. All Carhartt duck products also had triple chain stitching over felled main seams. This method locked the seams in place, giving them great strength and making it very difficult to pull them apart. The strength of the fabric was also increased by using double fill yarn, where two yarns were twisted together and used as one.

Keeping it in the Family: 1950s-60s

Wylie Carhartt was succeeded in 1959 as head of the company by his son-in-law, Robert C. Valade, who had begun his career at Carhartt in 1949. During the 1960s Carhartt began to enjoy larger revenues from chain store sales. This enabled the company to repurchase selling rights in territories it had been forced to sell back in the 1930s. Under Valade's leadership Carhartt would grow from sales of $2 million in 1960 to more than $300 million in the mid~1990s.

In 1960 the firm made two significant acquisitions: Crown Headlight of Cincinnati, Ohio, and W.M. Finck & Co. of Detroit, an overalls manufacturer. Following the acquisitions the firm began selling garments under the label of Carhartt Headlight & Finck. Carhartt also acquired E.F. Partridge in Georgia, which effectively gave the company the right to sell garments in the South again. In 1965 Carhartt, Inc., a Michigan corporation, was formed from the merger of Hamilton Carhartt Overall Co., Inc., a Georgia corporation, and W.M. Finck & Co., a Michigan corporation.

Acquisitions and Expansions: 1970s-80s

In 1971 Carhartt established its first contemporary subsidiary, Carhartt South, Inc., to produce jeans, after acquiring a plant in Drew, Mississippi. In 1976 Carhartt formed another subsidiary, Carhartt Midwest, Inc., after purchasing the assets of Shane Manufacturing Co., Inc. The new subsidiary had plants in Evansville, Indiana, and Sebree, Kentucky. In 1978 the acquisition of Gross Galesburg Co. in Galesburg, Illinois, resulted in the formation of a third subsidiary of the same name.

In 1980 Carhartt Midwest expanded into a plant and warehouse in Madisonville, Kentucky. The next year it purchased another plant in Providence, Kentucky, and subsequently closed its Evansville, Indiana, plant. In 1982 Carhartt launched its first national marketing program with national advertising. During the latter half of the decade Carhartt streamlined its organizational structure by merging its subsidiaries with the parent company to form divisions. In 1989 the company built a new distribution center and a new sewing plant on its property in Madisonville, Kentucky. Cutting operations from all plants except Galesburg were then centralized in the former sewing plant at Madisonville. An additional plant was acquired in Edmonton, Kentucky.

Expanding Capacity: 1990s

Carhartt's sales reached a record $92 million in 1990. The firm expanded its capacity in 1992 by purchasing a 64,000-square-foot sewing plant in Glasgow, Kentucky. That year the company's Gross Galesburg division was renamed Muleskins Division and began concentrating its production on sweatshirts. The Muleskins Division was discontinued shortly thereafter.

Work wear was showing signs of becoming a fashion trend in the late 1980s and early 1990s, so Carhartt displayed its outdoor working man's collection for the first time at fashion shows in New York in 1991. The company had been selling its clothes in Japan strictly as fashion items since 1987.

Revenues in 1992 reached an estimated $102 million. Expansion continued in 1993 with the completion of a new 100,000-square-foot distribution center in Glasgow, Kentucky. The firm also purchased an 80,000-square-foot sewing plant in Camden, Tennessee, that began production in mid~July.

Workwear as a fashion trend became very popular in 1993, helping Carhartt toward its 1993 sales goal of $120 million. Top rap and hip~hop groups were wearing Carhartt work clothing on televised videos as well as on CD covers and in performances onstage. Carhartt clothes were even featured in the pages of Vogue and Harper's Bazaar.

The company was challenged to keep up with demand as trendy urbanites snapped up the firm's limited supply, making it difficult to service the traditional Carhartt market. Mark Valade, Robert Valade's son and vice-president of marketing at the time, told Sales and Marketing Management, "We're really having a problem balancing the traditional retailer and the new retailer." All of the firm's manufacturing plants were operating at capacity, and a second distribution center was opened. Still, the company did not have enough product to supply everyone in 1993, and was forced to turn down accounts from department and specialty store chains because it did not have the production capacity to meet demand.

Carhartt's facility in Irvine, Kentucky, which was originally constructed in 1932, was converted to administrative offices and warehousing as the firm embarked on construction of a new 70,000-square-foot sewing plant there.

Further expansion took place in 1994, as Carhartt broke ground on a new central Kentucky cutting center in Glasgow, Kentucky. The company also purchased a 120,000-square-foot sewing plant in McKenzie, Tennessee, from competitor OshKosh B'Gosh, Inc. In 1995 the firm bought a 90,000-square-foot sewing plant in Dover, Tennessee, and a 26,882-square-foot sewing plant in Marrowbone, Kentucky, in 1996. The McKenzie plant was subsequently closed in 1999.

Internationally, London-based Work in Progress owner Ben Joseph, Carhartt's designated licensee and distributor in the United Kingdom, began promoting Carhartt clothing in England and Ireland in 1995. By 1998 he was also distributing for Carhartt in Europe, with combined revenues reported to be $8 million.

In the fall of 1997 Carhartt introduced a women's line and an Extremes line. Carhartt Extremes was a line of outdoor clothing designed to withstand the harshest weather conditions in wet and cold environments. After testing the women's line the previous fall, the company rolled out its new line of work wear for women at more than 100 stores. It was the first line of Carhartt garments designed specifically for women. Orders met and then exceeded expectations.

The Late 1990s and Beyond

In 1998 Carhartt began construction of the new 350,000-square-foot Robert C. Valade distribution center in Hanson, Kentucky. It opened in May 1999. When Carhartt awarded a contract for the distribution center to a nonunion design-and-build contractor, the company became involved in a dispute with the local building and construction trades council and the AFL~CIO, which threatened to boycott Carhartt products. Although there was never an official boycott, many union members were awaiting the outcome of the dispute before purchasing Carhartt apparel. The dispute was settled in November 1998 when Carhartt agreed to work with appropriate union building and construction trades councils in the construction of future projects, but planned to complete the Hanson facility with the existing contractor and subcontractors. Carhartt had traditionally been a unionized manufacturer, and union workers were a major customer segment. Carhartt had won the AFL~CIO labor management award in 1992.

Carhartt also expanded its marketing efforts in 1997 and 1998 through national sponsorships. It began supporting Professional Bull Riders events in November 1997, and in January 1998 began sponsoring one of the riders, Troy Dunn, who went on to win the title of World Champion in both 1997 and 1998. In the spring of 1997 Carhartt began its role as official national sponsor of Stihl Timbersports. Soon thereafter, Carhartt became a national sponsor of the Future Farmers of America (FFA) as well as the official sponsor of the FFA Home and Community Development Proficiency Award. As a national sponsor of the National High School Rodeo Association, Carhartt supported events all over the country.

Revenues for 1998 reached an estimated $307 million, triple the figure reported in 1992. Wholesale revenues in the United States were about $255 million, while $50 million was credited to Europe and the United Kingdom and $2 million to Japan. However, sales were flat from 1997 to 1998, a fact the company attributed to an unusually warm winter, given a common perception that Carhartt was a seasonal clothing company for fall and winter.

In 1998 Mark Valade became president of Carhartt following the death of his father, Robert Valade. His mother, Gretchen Carhartt Valade, became board chairperson. For the 1998-99 selling season Carhartt introduced a new merchandising concept for stores carrying its products, employing three unique fixtures: a workhorse fixture that expanded from one to two levels of hanging garments, a wall unit, and an accessory fixture. The module was designed to leverage Carhartt's brand power by organizing its full range of apparel and accessories in one easy-to-shop location. New signage was provided to identify the brand and call attention to the company's newer lines. The fixtures were interchangeable regardless of store format, an important consideration since Carhartt apparel was sold in a variety of retail outlets including discount and department stores, farm stores, and uniform outlets. Following a successful test run, the new shop initiative was rolled out to about 100 stores nationwide in 1998, with an additional 90 stores set to come on board in 1999.

In late 1998 the company began focusing on "first layer" clothing, such as T~shirts and jeans, for workers to wear in warmer weather. Even though work clothes had become a popular form of casual wear, all of the company's clothes continued to be designed for workers, especially construction workers. The company's marketing manager visited construction sites throughout the country to find out what workers wanted. Interestingly, he found that workers would often purchase Carhartt clothing for casual dress; then, as the clothes faded or lost their new look, the consumer would then wear the clothes for work.

With the construction of a 200,000-square-foot factory in Penjemo, Mexico, in September 1998, that would employ 500 union workers, Carhartt began making new products outside the United States. However, the company planned to continue making its core products at its existing U.S. facilities.

Carhartt, Inc. History

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