GLOBE OUT TO RAISE STAKES IN SPANDEX
Byline: Stuart Chirls
FALL RIVER, Mass. — The “quiet” spandex company is getting ready to make some noise, pumping up the volume in the red-hot spandex market.
Behind the three-foot-thick granite walls of a converted cotton mill built during the industrial revolution a century ago, Globe Manufacturing Co. is in the midst of a transformation from an old-line manufacturer of spandex fiber into an modern, aggressive competitor.
It’s a profound change for a company that for decades took pride in referring to itself as a “quiet” supplier, a change informed by the growing global textile market.
“We are in an expanding industry and intend to keep pace,” said Globe’s chairman, Thomas Rodgers Jr. “We can’t stand still or our competitors will leave us in the dust.”
Rodgers is a Yankee octogenarian who was born and raised in this town, and his company has always reflected his low-profile mien. But now, the apparel market’s insatiable demand for stretch fabrics has upped the competitive ante. In June, DuPont, by far the world leader in spandex, opened a state-of-the-art spandex facility in Waynesboro, Va., while Bayer Corp., the American subsidiary of Bayer AG of Germany, plans to break ground early next year for an expansion of its plant in Bushy Park, S.C.
Globe, which is forecasting a minimum 10 percent annual growth rate for spandex fabrics in total through 2000, has unveiled a multipronged strategy that is designed to raise its corporate profile, boost sales and make its name a force in the worldwide apparel fabrics business. The plan includes:
A $17 million expansion of its Tuscaloosa, Ala., spinning plant that will increase capacity there by 50 percent.
Doubling its advertising and promotions budget.
Introducing new product for new markets.
Creating a new contemporized logo.
A “Spandex Solutions” telephone hotline to assist retailers and apparel manufacturers.
“As things become more competitive pricewise, we have to improve our product,” said Rodgers, whose son, Thomas 3rd, is president of Globe.
Globe is focusing on increased productivity to boost its margins, Rodgers said, but there are indications that fiber prices could be improving. DuPont, as reported, has announced the first price increase on Lycra spandex in six years — a 6 percent increase on a number of yarns to go into effect on Dec. 27 — and a Globe spokesman said that it would follow suit in 1998. “We intend to be a player in this field,” said Rodgers.
The stakes are high for Globe. According to published estimates of the 90,000-ton annual worldwide spandex market, DuPont owns a commanding 42,000 tons capacity, followed by Korean-based Taek Kwang at 16,000 tons. Globe and Bayer are locked in a fierce battle for third, at 9,000 and 8,500 tons, respectively.
Founded in 1945 by Rodgers as a maker of rubber thread, Globe now has 1,100 employees at plants here, its largest site, where it produces thread, and dry-spun and reaction-spun spandex yarn in medium and heavy deniers; in Tuscaloosa, which makes dry-spun, fine-denier yarn, and at a warping and distribution center in Gastonia, N.C. Though privately held, Globe executives ballparked capacity at 25 million to 30 million pounds, with annual sales of around $175 million.
“We’re not changing, we’re just being more open,” said William Girrier, director of marketing and business development. “How does a company differentiate itself now? Through responsiveness and hands-on service, without the bureaucracy.”
Girrier said that Globe, like other fiber and textile makers, is learning to operate outside the industry’s traditional boundaries. “Our plan is all about dealing with our direct customer, but you also have got to be an information and solution provider. We have to be considered a resource. The lines delineating what you are are blurred, especially with the retailers controlling everything and rolling cost increases way the heck back in the pipeline.”
While Globe sells into the swimwear and ready-to-wear markets, other product segments that Globe supports include women’s and men’s hosiery; fine-denier warp knits, such as panties and other lingerie, nonwovens (disposable diapers) and narrow fabrics.
Currently, circular knits account for 50 to 60 percent of Globe’s apparel sales. Warp knits are projected to total 8 to 10 percent within a few years. Wovens are another small area that’s expected to grow for the firm.
“There has been a huge influx into this country of circular knitting machines, and there are very few that don’t have spandex attachments,” said Mac Reis, vice president of operations. “It is a big market getting bigger.”
The Tuscaloosa expansion boosted capacity there in dry spinning by 5 million to 7 million pounds, or 50 percent, for a total output of around 12 million pounds, all for the apparel market. Fall River produces both dry- and reaction-spun spandex for apparel and hosiery, while Gastonia is about 90 percent reaction spinning, for narrow fabrics, hosiery and nonwovens.
In the coming months, Globe plans to roll out a new spandex fiber aimed at apparel. “It is a polyether-based product that will make us chemically competitive with the other spandex makers in heavy-denier yarns,” said Girrier. “We will be selling into the warp-knit area, including raschel — markets we haven’t been in before.”
All told, Globe’s production is evenly divided among hosiery, apparel and narrow and nonwoven constructions.
That capacity has been stimulated to a large degree by overseas sales, an area that has been a key to Globe’s business plan. “We have to be international,” Girrier said, noting that Globe has agents and distributors in 40 countries, in South America, Europe and Asia.
Europe is Globe’s largest foreign market, and the company has been making a push for a bigger slice of the women’s hosiery market. British retail giant Marks & Spencer has also been a longtime Globe customer.
Fully 32 percent of overall volume is from foreign sales.
“Our current business plan calls for that to rise to 50 percent by 2000,” he added.
The elder Rodgers said that Globe more than likely will float a public stock offering sometime in the next few years to raise the needed capital for international expansion.
“I envision us in the next five years furthering what we do on the Continent,” said Robert Bailey, vice president of sales and marketing. “We are bullish on spandex and we want to be ahead of the curve.”