Fruit of the Loom

Last updated
Fruit of the Loom, Inc.
Company type Subsidiary
Industry Textile, sports equipment
Founded1851;173 years ago (1851)
in Warwick, Rhode Island, U.S. (as "B.B and R Knight Corp.) [1]
Founders Robert Knight & Benjamin Knight [2]
Headquarters
Bowling Green, Kentucky
,
United States
Area served
Worldwide
Products Clothing (casual wear, activewear), sports equipment
Brands Exquisite Form
Number of employees
32,400
Parent Berkshire Hathaway
Subsidiaries
Website fruit.com

Fruit of the Loom is an American company that manufactures clothing, particularly casual wear and underwear. The company's world headquarters is located in Bowling Green, Kentucky. Since 2002, it has been a wholly owned subsidiary of Berkshire Hathaway.

Contents

Products manufactured by Fruit of the Loom itself and through its subsidiaries include clothing (t-shirts, hoodies, jackets, sweatpants, shorts and lingerie), and sports equipment (softballs and basketballs) manufactured and commercialized by Spalding.

Company profile

Fruit of the Loom is one of the largest manufacturers and marketers of underwear, printable T-shirts and fleece for the activewear industry, casualwear, women's jeanswear, and childrenswear. The company employs more than 32,400 people worldwide.[ citation needed ]

The company's logo comprises a red apple, leaves, green grapes, purple grapes, and white currants (or yellow gooseberries), [3] but not a cornucopia. In July 2023, a Snopes reporter said that a search of newspaper advertisements between the 1920s and 2020s revealed none that depicted a cornucopia — this is often cited as an example of the Mandela Effect. [4]

The company is a vertically integrated manufacturer. In 2006, Fruit of the Loom acquired Russell Brands, LLC, a global company whose brands included Russell Athletic, Brooks Running, and Spalding, among other names in athletic wear. [5] The purchase amount was $600 million. [6]

History

Rhode Island beginnings

The origin of the Fruit of the Loom company dates back to 1851 in Rhode Island, [7] [8] when textile mill owner Robert Knight and his brother Benjamin established the "B.B. and R. Knight Corporation" after they acquired the Pontiac Mills in Warwick, Rhode Island. In 1856, the company introduced the brand name "Fruit of the Loom", while producing its first muslins. [2]

A friend of Robert Knight named Rufus Skeel owned a small shop in Providence that sold cloth from Knight's mill. Skeel's daughter painted images of apples and applied them to the bolts of cloth. The ones with the apple emblems proved most popular. Knight thought the labels would be the perfect symbol for his trade name, Fruit of the Loom  – an expression referring to clothes, paralleling the phrase "fruit of the womb", which can be traced back to the Bible (Psalm 127:3). [9]

In 1871, just one year after the first trademark laws were passed by Congress, Knight received trademark number 418 for the brand "Fruit of the Loom". Much of its athletic outerwear was sold under the "Pro Player" label, a now defunct division.[ citation needed ]

20th century

Earth 20th century newspaper ad for Fruit of the Loom muslin fabric (1921) Fruit of the Loom Muslin newspaper ad.png
Earth 20th century newspaper ad for Fruit of the Loom muslin fabric (1921)

The company was part of Northwest Industries, Inc., until NWI was purchased by William F. Farley in 1985 and renamed Farley Industries, Inc. [10]

Farley served as president, CEO, and majority shareholder for 15 years. Fruit of the Loom's sales revenue rose from approximately US$500 million at the time of NWI's purchase (equivalent to $1.36 billion in 2022) to roughly US$2.5 billion nearly 15 years later (equivalent to $4.25 billion in 2022), about a three-fold increase after inflation. Debt financing proved difficult to manage, however, even as dollar sales revenue quintupled.[ citation needed ]

On March 23, 1987, the company sold its subsidiary General Battery to Exide Corporation. [11]

In the 1990s, the American textile industry overall experienced widespread downsizing in the wake of North American Free Trade Agreement and General Agreement on Tariffs and Trade. [12]

In 1995, Chairman Farley announced that the company would close six plants in the Southeastern United States, and cut back operations at two others. Operations were moved to cheaper plants abroad. 3,200 workers, or about 12 percent of its American work force, were laid off. Farley also announced that company earnings fell 22 percent, despite a 10 percent increase in sales. [12]

In 1999, Fruit of the Loom filed for Chapter 11 bankruptcy protection, shortly after posting a net loss of $576.2 million. [13] Its 66 million shares of outstanding common stock dropped in value from about $44 per share in early 1997 to just more than $1 by spring 2000. Reasons for the bankruptcy are varied. A large debt load which was assumed in the 1980s, a common practice at the time, did not help. William F. "Bill" Farley, the company's former chairman, CEO, and COO, was ousted prior to the bankruptcy filing in late 1999, after having piloted the company into massive debt and unproductive business ventures,[ citation needed ] including structuring the company into an off-shore entity in the Cayman Islands to avoid taxes. [14]

21st century

The company was bought from bankruptcy by Berkshire Hathaway Corporation, controlled by investor Warren Buffett, who wanted the valuable brand. He agreed in January 2002 to purchase the company for approximately $835 million in cash. The deal was concluded on April 29, 2002. A condition of the purchase required that former COO and then interim CEO John Holland remain available to be the CEO for the company. [15]

The company purchased Russell Brands, LLC, effectively taking the former competitor private, in a deal valued at $598.3 million that was completed August 1, 2006. [16]

The company announced the purchase of VF Corporation's intimate apparel company named Vanity Fair Intimates for $350 million in cash on January 23, 2007. [17] This company was renamed Vanity Fair Brands and is operated as a wholly owned subsidiary. [18]

In 2010, Rick Medlin was named president and CEO of Fruit of the Loom. Longtime CEO John Holland became the company's chairman. [19] In 2014, the company closed its Jamestown, Kentucky, plant, which had once been the second manufacturing plant in the state, and laid off all 600 employees. [20] The company acknowledged it was moving the plant's operations to Honduras to reduce production costs. [21]

In December 2016, Melissa Burgess Taylor was named chairman and CEO of Fruit of the Loom by Buffett after the death of Rick Medlin. [22]

Bibliography

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References

  1. ↑ Company Overview of Fruit of the Loom, Inc. on Bloomberg.com
  2. 1 2 History and more on FOTL website
  3. ↑ 98% Brand Recognition The History of Fruit of the Loom Apparel
  4. ↑ Kasprek, Alex (July 5, 2023). "Has the 'Fruit of the Loom' Logo Ever Contained a Cornucopia?". Snopes.com. Retrieved July 6, 2023.
  5. ↑ Acquisition of Russell Corporation Complete on Business Wire
  6. ↑ Russell Corporation history in "Reference for Business" website
  7. ↑ "Fruit of the Loom". fotlinc.com. Retrieved June 10, 2016.
  8. ↑ Rhodes, Margaret (March 24, 2014). "Why Fruit Of The Loom Is Designing More Than Just Undies". Fast Co Design. Retrieved June 10, 2016.
  9. ↑ Psalm 127:3 . Retrieved 2018-08-29. Lo, children are an heritage of the Lord : and the fruit of the womb is his reward.{{cite book}}: |website= ignored (help)
  10. ↑ "Northwest Industries Inc.". The Electronic Encyclopedia of Chicago. Chicago Historical Society. 2005. Retrieved 2018-04-06.
  11. ↑ Times, Special to the New York (1987-03-24). "COMPANY NEWS; Fruit of the Loom". The New York Times. ISSN   0362-4331 . Retrieved 2023-01-20.
  12. 1 2 Feder, Barnaby (31 October 1995). "Fruit of the Loom to Close Six U.S. Plants". The New York Times. p. D6. Retrieved 2018-04-29.
  13. ↑ "Fruit of the Loom Files for Chapter 11". Los Angeles Times. December 30, 1999. Retrieved June 10, 2016.
  14. ↑ "Fruit of the Loom votes to change its base". The Irish Times. Retrieved 2023-12-20.
  15. ↑ Buffett, Warren (February 28, 2002). "Chairman's letter". Berkshire Hathaway. Retrieved 2007-01-23.
  16. ↑ "Berkshire agrees to buy Russell for $598.3M in cash". MarketWatch. April 17, 2006. Retrieved June 10, 2016.
  17. ↑ "VF Corp. sells intimate apparel unit to Fruit of the Loom". MarketWatch. January 23, 2007. Archived from the original on July 7, 2012. Retrieved January 23, 2007.
  18. ↑ "Perceva offers to buy Berkshire Hathaway's lingerie brands".
  19. ↑ Maze, Brent (August 10, 2010). "New CEO to lead Fruit". AlexCityOutlook.com. Retrieved May 31, 2013.
  20. ↑ Estep, Bill (March 21, 2015). "Jobs gone, Fruit of the Loom's unpaid property tax bill remains in Russell County". Lexington Herald Leader. Retrieved September 20, 2016.
  21. ↑ Beam, Adam (April 3, 2014). "Fruit of the Loom to close U.S. plant, move jobs to Honduras". St. Louis Post Dispatch. Associated Press. Retrieved September 20, 2016.
  22. ↑ "Fruit of The Loom News". fotlinc.com. Retrieved 2018-03-13.
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