Hampton Industries, Inc. History

Company History:

Hampton Industries, Inc. is one of the oldest companies in the United States engaged in the manufacturing and selling of wearing apparel for men, women and children. The company manufactures men's and boy's shirts, men's and women's sleepwear, sweaters, sportswear, swimtrunks and other items. While manufacturing and selling its own apparel under the company's tradenames "Le Tigre," "Campus," and "Kaynee," Hampton Industries also manufactures and sells apparel under the "Rawlings" and "Nautica for Boy's" trademarks as licensees, and has recently reached new license agreement with such prestigious apparel lines as "Ron Chereskin," "Bugle Boy," "Apex," and "Dickies." Hampton's products are sold across the United States in many of the nation's leading retail chains, including such stores as Wal-Mart and J.C. Penney Company. A majority of the company's apparel is manufactured domestically within the United States, but during the 1990s Hampton has made arrangements to produce more of its products in Central America and Asia. Under the auspices of the Caribbean Incentive Program, the company has entered into two joint ventures for apparel manufacturing in Central America, and numerous agreements have been made with firms in Asia for the same purpose.

Early History

The founder of the Hampton Shirt Company was L. Hampton, a lifelong resident of North Carolina who believed in the value of a well-made man's shirt. Hampton was a successful businessman in Kinston who had always wanted to establish his own apparel company. The need for high-quality dress shirts was a priority in North Carolina, because a southern gentleman who was engaged in business during the 1920s was expected to dress appropriately. What this meant was that every man working in a bank, insurance agency, hospital, or government office was expected to wear a high, stiff-collar, white cotton dress shirt with a suit and tie. Recognizing the need for a regional manufacturer of high-quality dress shirts, Hampton decided to start his own company in 1925. By the end of the decade, the Hampton Shirt Company had garnered a reputation for low-cost, durable yet comfortable, cotton dress shirts that a man could wear to work. Business boomed, and soon the company had approximately 200 employees with an ever-increasing number of satisfied customers.

From the beginning, the company sold its shirts to local retail stores under its own brand name. At the same time, Hampton began to manufacture shirts under license to the brand name of retail stores in the region. This idea of licensing enabled the company to take advantage of the desire many small retailers had in selling their own brand name dress shirt. One of the obvious reasons was to instill of sense of customer loyalty so that the retailer would have a fairly regular customer list over a period of time. Another reason, not any less important, was for advertising the name of the retail store.

With the stock market crash of 1929, and the coming of the Great Depression, Hampton Shirt Company was especially hit hard. Although the effects of the economic downturn left no business in the United States untouched, Hampton Shirt Company not only lost a good many of its customers but was also forced to lay off many of its employees. Most businessmen, instead of purchasing newly-made, white cotton dress shirts, continued to wear their old shirts until they became frayed around the collar and cuffs. As revenues decreased, so did the fortunes of the company. When the Great Depression deepened in its economic severity, management at the company decided to reduce the workforce to a skeleton crew, and keep its operating expenditures to the absolute minimum. These draconian measures were effective to the extent that the company continued in business, but just barely.

World War II and the Postwar Era

With the U.S. entry into World War II after the Japanese bombed the American Naval Base at Pearl Harbor, Hawaii, the Hampton Shirt Company's fortunes changed dramatically. Suddenly, the company was contracted by the United States Armed Forces to manufacture millions of khaki cotton shirts in regular Army green, and numerous other regulation colors. Hampton shirts were worn by generals, privates, ensigns, fighter pilots, cooks, mechanics, and drill sergeants. The company expanded its workforce almost overnight, and added evening and night shifts in order to meet the deadlines established by the government contracts. Revenues increased, and the company continued to expand throughout the remainder of the war.

After World War II ended with the formal surrenders of Germany and Japan in April and August 1945, respectively, Hampton Shirt Company resumed the volume of business it had created for itself during the 1920s. Sales continued to increase as the postwar boom brought new business and activity to the region around Kinston, North Carolina. The company's customer list began to grow rapidly, as retail stores throughout the area contracted Hampton Shirts to manufacture dress shirts under their own label. As previously, Hampton Shirts still made products under their own brand name, and sold them in major retail stores throughout the South, but the licensing agreements were just as lucrative for the company.

The Hampton Shirt Company continued its success throughout the decade of the 1950s. In fact, the 1950s were much like the previous 20 years of the company's business; businessmen still wore white cotton dress shirts to work and were expected to do so in light of the social conventions of the time. Although the company began to expand into other kinds of shirts, including sports shirts and work shirts, the mainstay of the business was the ubiquitous white dress shirt. By the end of the decade, the Hampton Shirt Company had doubled its number of employees, while revenues had also increased significantly.

The 1960s saw Hampton Shirt Company grow slowly but steadily in product lines, revenues, and employees. At the beginning of the 1960s, men were still adhering to the time-honored, traditional dress code of white shirt and dark suit when conducting business. Yet as the social milieu of the United States began to change, and an attitude of skepticism and rebellion towards all that had been previously accepted, most evidently regarding government policies but also including social and behavior norms, swept through the younger generation of the country, people began to dress differently. The white cotton shirt and dark business suit was no longer thought of as the only appropriate manner of dress in which to conduct business. With this more casual approach to business attire came the colored dress shirt in hues of blue, pink, yellow, and beige. The Hampton Shirt Company thus began to manufacture many more lines of shirts and, as the demand for their products grew, so too did the need to expand the firm's facilities. As the 1960s came to a close, the company had designed a number of new product lines, expanded its facilities from one plant to three plants in order to accommodate the rising demand for its products, and had offered a public sale of its stock on the American Exchange.

Growth and Expansion

During the 1970s and 1980s, the company continued its uninterrupted period of postwar growth. New facilities were constructed in Virginia and North Carolina, with a brand-new, state-of-the-art executive headquarters built in Kinston, North Carolina. Having changed its name from the Hampton Shirt Company to Hampton Industries, Inc., to reflect its diverse product lines, the company employed approximately 2,000 by 1979. Recognizing that the company needed an office close to the center of the nation's retail activities, management decided to open a sales and merchandising office in New York City near the heart of the clothing district. Within a few years, Hampton Industries had expanded its operations to include seven plants and three distribution centers in Virginia and North Carolina, while the New York office continued to buzz with the excitement of procuring new contracts and licensing agreements.

The two factors that enable Hampton Industries to garner such success within the highly competitive apparel industry were the quickness of its manufacturing methods and the use of the latest technology for garment production. From the early 1980s on, management at Hampton Industries was committed to a capital improvement strategy that would increase the firm's production capacity while lowering costs at the same time. Over $10 million was apportioned during the 1980s for the company to take advantage of the latest technology within the apparel industry. One of the first installments made by management was the Amdahl 5860 computer, which was programmed to control all of the company's inventory, payroll, accounting, budgeting, order entry and shipping, purchasing, telephone systems for all company locations, cutting tickets, plant scheduling, and electronic mail.

Yet the most instructive example of the company's ability to reduce costs through the use of new technology was clearly evident in its collar constructions for shirts. Employing highly advanced fusing equipment, the lining of a shirt is fused to the top ply of a collar and then made on a state-of-the-art automatic collar-running machine. One Hampton employee was therefore able to combine collar clip-and-turn, press and topstitch into one operation. By using a Lunapress machine, one employee could accomplish the first three stages of this process on two collars at the same time. Additional technology that Hampton brought to its workrooms included a Gartech Teva servo cutting system, custom built spreading equipment, Necchi pocketsetters, mechanized sewing and indexing equipment, hemmers and cuff running machines, buttonhole indexers, Tajima embroidery machines, banding machines and collar runners, and automatic collar topstitchers.

All of this automation paid off handsomely for the company. From 1984 to 1989, sales rose steadily, and by 1989 sales totaled $181 million, up nearly $9 million from the previous year. At the same time, Hampton Industries became more cost effective, with its workforce reduced from 3,000 employees in 1986 to just under 2,500 by 1990. In both 1986 and 1990, the company was awarded the highly prestigious AIM Gold Star Award. Organized by the editors at the Apparel Industry Magazine, the AIM Gold Star Award was given to a company within the apparel industry that had been nominated and then chosen by over 100 industry suppliers, consultants, and research institutions as the "Best of the Brightest."

The 1990s and Beyond

In 1992, Hampton Industries reported its highest ever annual sales figure--$203 million. Yet even at that time the apparel industry was experiencing a dramatic transformation. Intense competition had led many clothing manufacturers to seek out and establish themselves in niche markets, such as work clothing or sportswear. Unfortunately, Hampton Industries had recently expanded its product line to include a host of new items such as ladies sleepwear, activewear, men's shirts and sportswear, and boy's shirts and sportswear. As the competition for customers grew fiercer, Hampton was gradually squeezed out of many of its traditional and sustaining markets. By 1994, annual sales for the company had fallen to $172 million.

Astutely recognizing the trends within the industry, management at Hampton Industries began to implement a comprehensive restructuring strategy that would help the company regain its competitive edge. One of the first steps management took was to immediately discontinue those product lines which were unprofitable and, more importantly, reduce excess domestic production capacity. Accordingly, the company decided to close a number of its plants in Virginia, thereby reducing its operating costs, but also began to increase its imports from overseas. Agreements were made with companies in the Far East, Central America, and the Caribbean to manufacture shirts and sportswear under the brand name of Hampton, and then ship them to the United States for distribution and sale. By the mid-1990s, Hampton Industries was importing approximately 40 percent of all its products from overseas manufacturers.

In addition, each of the company's eight divisions had clarified and established marketing goals and strategies to attain them. Narrower segments of each market were identified, and management pursued a niche in each market where Hampton's product line could be sustained over a period of five to 10 years. Licensing also played a significant role in the company's restructuring strategy, with Hampton Industries reaching agreements with Dickies to manufacture casual and rugged sportswear, and with Apex for men's activewear. Management hoped that Dickies' position as leader in the retail workwear apparel market, and Apex's spot as the premier sports apparel brand name, would provide exposure for the company's own brand name products and enable Hampton Industries to attain a similar position in the sportswear market.

The strategy to revive the company's fortunes is still awaiting a final verdict. Although sales rose in 1995 to $184 million, the 1996 sales figures were somewhat disappointing, having dropped to $160 million for the fiscal year. Yet Hampton Industries continues its restructuring strategy, with more and more products manufactured overseas and shipped to the United States.

Principal Subsidiaries: Production Link, Ltd.; Samsons Inc.; Samsons Manufacturing Corporation; Kinston Shirt Company; Samsons Apparel Corporation; Kinston Paper Box Co., Inc.; Kinston Die Cutting Corporation; Hampco Apparel, Inc.; Hampton Shirt Co., Inc.; Snow Hill Apparel Co., Inc.; Hamptex Inc.; IGM Corp., S.A. de C.V. (El Salvador).

Further Reading:

• D'Innocenzio, Anne, "Nautica: A New Approach," Women's Wear Daily, November 13, 1996, p. 7.
• Feitelberg, Rosemary, and Ozzard, Janet, "Designers Eye a New Step," Women's Wear Daily, April 18, 1996, p. 7.
• "Hampton Industries Has Been Making Children's Clothes for Nautica Since 1994," Daily News Record, May 21, 1996, p. 2.
• Kulers, G. Brian, "Hampton Industries," Apparel Industry Magazine, December 1990, pp. 30-35.
• Lloyd, Brenda, "Status Brands Gobbling Up Space in Southeast," Daily News Record, August 19, 1996, p. 28.
• "The Lowdown on the '97 Licensed Label Lineup," Daily News Record, January 27, 1997, p. 10.
• Parr, Karen, and Ellis, Kristi, "Key Issues: Price, Quick Turns," Women's Wear Daily, December 5, 1996, pp. 10-18.
• Petersen, Anrea, "What's Cool For School?," The Wall Street Journal, August 30 ,1996, p. B1(E).
• Socha, Miles, "Some 'Little Guys' Manage to Battle the Red, White and Blue; Secrets for Surviving in the World of Ralph, Tommy, Nautica," Daily News Record, March 31, 1997, pp. 6-7.

Source: International Directory of Company Histories, Vol. 20. St. James Press, 1998.