By a Thread

By Melba Newsome

"People are always surprised to learn that we still make anything here in the U.S.," says Springs Industries CEO Crandall Bowles. The largest home-furnishings company in North America, Springs and its 14,000 employees crank out bedding and bath products, rugs and window coverings in 30 manufacturing facilities in 13 states, Canada and Mexico. Its brand names and licenses--including Wamsutta, Springmaid, Ultrasuede, Kate Spade and NASCAR--produce annual revenues of $3 billion. Springs is proof positive that U.S. textile manufacturing is very much alive. But it would be a stretch to say it's well. According to the Bureau of Labor Statistics, the U.S. lost more than 800,000 textile jobs from 1994 to 2004-- about 350,000 of them since 2001--and 18 domestic textile plants have been closed this year. That figure includes four Springs facilities in South Carolina.

Springs was started in 1887 by Bowles' great-great-grandfather Samuel Elliott White and great-grandfather Leroy Springs. Her father William Close took the company public in 1966. But by the time Bowles became CEO in 1998, the Southern textile industry was under siege from imports. A financial analyst by training (and political wife by fate--she's married to Erskine Bowles, once chief of staff under President Bill Clinton), Bowles understood that to remain competitive, Springs had to restructure, cut domestic production and run a more efficient operation. First she took the company private again, in September 2001, for $1.2 billion. The family is the majority shareholder. Tom O'Connor, executive vice president, says going private gave Springs the flexibility it needed to address the tough reality facing the industry. "We also recognized early on where trade laws were going--that this is going to be a quota-free world--and said, Let's get our ducks in a row."

That meant making more ducks in China, Pakistan and elsewhere to lower costs. Springs can't always be cheapest, Bowles concedes. Instead she hopes that mirror manufacturing, or duplicating much of its product line domestically, will give the company a leg up. "If a customer has a spike in demand or a product starts to sell ahead of forecasting, it takes longer to get it if there's a 90-day supply chain from China," says Bowles. Her U.S. plants can ship in days.

Instead of trying to be all things to all retailers, Springs is focusing on core customers. Bowles says eight of them--including Wal-Mart, Kmart/ Sears and Target--account for about 80% of sales. That could be a risky strategy, since more retailers go directly to overseas suppliers for their store-label goods. Springs increasingly finds itself competing with its customers. Bowles is depending on good service, quick turnaround and brand power to stay in the game.

Given what has happened, her employees fret about the company's ability to survive; 75 of them have 50 or more years on the job. "One of my biggest challenges is to motivate and reassure the employees that this company does have a future and we can grow and prosper," she says. "Everybody sees what's going on, and it's quite threatening."

Despite the upheaval in the domestic industry, Bowles still runs up against the notion that because the company outsources, it cares more about profits than jobs. "That whole thought process is so annoying to me," she says. "How many jobs can we have if we don't make a profit? If retailers will only sell goods made here and consumers will only buy products made here, I'll reopen all my plants here. I'd love to do that. But that just isn't going to happen."