Malden Mills Industries Inc., the maker of Polartec fleece fabric is focusing on a new line of military products to rescue the company from bankruptcy protection (director-e News, Monday 25 November)
With the help of well-placed political allies, Malden Mills has booked $30 million (£19 million) worth of Pentagon orders in the past two years, including a deal last month worth more than $12 million (£7.6 million), and is lobbying for an even bigger order next year to produce flame-resistant versions of its Polartec polyester fabric for Navy pilots.
The company says the revenue projected from these deals underpins a recent understanding with creditors that could enable it to emerge from Chapter 11 bankruptcy protection soon - with its chief executive, Aaron Feuerstein, still in a leadership role at the family business renowned for its generosity to employees after a devastating 1995 fire.
Many legal obstacles remain before the company's future is clear, but Malden's emphasis on military work has already made its black fleece popular in new circles.
Army General Tommy Franks, commander of US forces in Afghanistan, has worn a black Polartec jacket at outdoor press conferences; and since last year more than 200,000 other US military personnel have been issued similar jackets, making them familiar from Bosnia to Kandahar.
Another 1,000 service members whose units were not issued the fleece have paid $56 (£35) apiece for the latest from the Pentagon's winter collection.
Malden Mills sees around 10 percent of its revenue coming from military fleece sales going forward - or between $17 million and $18 million ((£10.7 - (£11.4 million) of sales of between $171 million and $183 million ((£108 - (£115.6 million) the company now expects to record in 2003, according to David Costello, Malden Mills' military business manager.
In addition, Costello says Malden Mills expects more revenue from paramilitary branding strategies, such as a new line for duck hunters made to resemble the Army garments. "Our products are validated by the fact that the best of the best in the military demand Polartec", he says.
Perhaps the real surprise is that the sluggish military procurement system has any of Malden Mills' Polartec fleece fabric at all.
The deployment of troops to Afghanistan stressed the Pentagon's supply of basic outdoor gear, according to a congressional budget report last month. It cited Army estimates that the average soldier spends $300 ((£190) a year out of pocket on black fleece apparel, water-carrying backpacks, satellite-positioning receivers, and other familiar consumer products.
"It is unacceptable for American soldiers - both active and reserve - to be deployed with anything but the best the Army has developed", the report states.
How Malden gained its military niche reflects both the company's lobbying efforts in Washington and its quest for new markets after the 1995 fire - following which Feuerstein used insurance money to continue paying thousands of idled workers while rebuilding his plant locally.
For his actions, Feuerstein drew acclaim as a model of corporate responsibility. But he reinvested too much, and after a sales downturn, lenders forced the company into bankruptcy protection last year as a condition of further financing.
All the while Malden Mills had tried to develop military sales, figuring it had a leg up since rules require the Pentagon to buy certain textiles domestically - and the company's largest competitors are based in Asia.
Identifying the niche
The niche was first identified in the late 1980s by an employee, Cesar Aguilar, who spent several weeks shivering in the Army's cold weather gear while on National Guard manoeuvres in upstate New York.
Known as the 'bearsuit', the brown insulating clothing was sewn from a simpler polyester pile fabric that absorbed water. The outing "was cold, snowy, and miserable", recalls Aguilar, now Malden Mills' executive vice president.
He sought out officials at the Army's Soldier Systems Centre in Natick, which designs clothing for US Special Operations troops, and by the mid-1990s had arranged for several runs of black fabric that were sewn into jackets used by soldiers in Bosnia and elsewhere.
A higher volume of sales proved elusive, however. One obstacle turned out to be more than 100,000 old-style shirts and pants in the warehouses of the Defence Logistics Agency, which continued buying the previous designs as late as 1997.
A more serious hurdle was the long process of working out military specifications so that hundreds of thousands of Polartec jackets, shirts, and pants could be sewn by the Pentagon's network of non-profit manufacturers such as Goodwill Industries and Peckham Inc., both of which employ many disabled workers.
Aguilar and Costello found allies in Natick, however, who were jealous of advances that had made Polartec trendy at shopping malls during the 1990s. The military designers' specifications were eventually accepted by the Army and Marines for larger orders.
With the services' interest, Malden sought help from US Senator John F. Kerry and two Massachusetts armed services committee members, Senator Edward M. Kennedy and US Representative Martin T. Meehan of Lowell; all cited Feuerstein's past benevolence as they sought funding for the company.
Malden Mills announced its first major military order on 31 October 2000: a $17 million (£10.9 million), three-year deal to provide Polartec to be stitched into pullover sweaters for the Marines. "This is a natural fit", declared Feuerstein, himself a National Guardsman in the late 1940s.
A second deal announced last month, worth $12.4 million (£7.9 million) in 2003, gave Malden Mills orders for more cold weather clothing and for researching electronic textiles for the Natick laboratories.
Already, production lines are humming. At Peckham, manager Karen Jury said workers produced and shipped 270,000 black fleece jackets during the 12 months ended in July, and about 700,000 fleece garments in all.
Workers are too busy to accept requests from civilians who want to wear the fleece around themselves. "If you're not active duty, and you're not going someplace overseas, the answer is no", Jury said.
Aguilar and others say there's an irony in the military's new-found demand for Polartec, a material that first proved a hit in more liberal circles. A more delicate matter for Malden Mills is just how much to advertise its status as a military supplier.
As an experiment, last month Malden and Cabela's, a chain of eight hunting-and-fishing supply stores, set up a special in-store display area to sell what it calls the 'Special Operations Forces Clothing System' and the 'Special Ops Pullover'. A black Polartec jacket similar to the one worn by General Franks sold out earlier this month.
Jeff Smith, product manager for Cabela's, said Malden Mills has assured him the terms are valid because the fabrics are the same as those used by the military. Smith said he let Malden Mills provide the item names anyway.
Fred Chan, a programme manager at the Natick labs, says technically any use of the term 'Special Ops' for commercial sales isn't correct because the Army doesn't license the phrase or its endorsement.
But it's not illegal either, and Chan says he won't object. "It's an improper use of the term, but we don't care", he said. "If somebody wants to buy one to feel like they're getting something official, great. I've got more important things to do than to pursue it".