Fig Leaves and Fortunes: A Fashion Company Named Warnaco.
Warner Brothers was founded by doctors I. Dever and Lucien C. Warner in rural New York in 1874. The doctors developed a more healthful and comfortable corset design for their patients, who suffered from a variety of physical ailments associated with the tight Victorian corsetwear of the day. Over the next forty years, the brothers and their sons, D. H. and L. T. Warner, developed designs, materials, and technologies for the volume production of a full line of more healthful ready-made corsets. Facilities were erected in Bridgeport, Connecticut, in 1876 and, after 1912, the company produced millions of standard corsets annually with over 4,000 employees.
Warner Brothers experienced serious difficulties in the 1920s and 1930s. Lighter and simpler wrap-arounds and corselettes replaced fiber and steel-boned corsets, Warner's primary products, and the Great Depression devastated all apparel markets. D. H. Warner, company president through this turbulent period, financed an extravagant lifestyle with company revenues. Bankers cut off credit lines, and D. H.'s death in 1934 was followed by an inheritance battle that nearly destroyed the firm.
John Fields, Sr., D. H. Warner's son-in-law, assumed control of the firm in 1934 and turned its fortunes around. Costs were slashed and new credit sources were secured. The company adopted synthetic fabrics and began to manufacture basic corselettes, girdles, and brassieres. It created or expanded design, manufacturing, licensing, and distribution facilities in the United States, Europe, and Latin America. The Second World War only temporarily interrupted an expansion that continued into the 1950s.
Between the late 1950s and early 1970s, improved elastic fabrics simplified the task of designing comfortably fitting foundation wear, and girdles and bras gave way to light lingerie, bodystockings, and pantyhose. Smaller and more product-specific firms and large diversified corporations, department stores, and chain stores cut into Warner's business. Older Warner stockholders liquidated their holdings, and Asian imports captured increasing shares of the U.S. women's clothing market.
The book's author, John Fields, Jr., managed the company through this critical period. Warner narrowed its intimate apparel lines by concentrating on lighter and more fashionable styles for a younger, upscale clientele and moved into dress and knit shirts, sportswear, knit sweaters, and hosiery. It expanded its design and marketing departments, purchased fabric mills and retail outlets, and pursued a low-volume, high-markup production and price strategy. It employed Asian subcontractors, purchased an interest in a major Asian commission house, and expanded its Canadian and European interests. Financial control and research and development were centralized in a corporate headquarters, operational control was allocated to three major product divisions, and fashion risks were minimized by product diversification, close links to markets, and brand-name advertising. The strategies were successful, as the firm's assets, sales, and profits grew dramatically through the 1960s. By the early 1970s the company was listed on the New York Stock Exchange, was among the Fortune 500, and had acquired the name Warnaco.
But Warnaco's sales fell dramatically in the recession of 1974-75. Its import operations incurred costly legal fees and fines and higher than anticipated tax bills. Excess capacity, low profits, and high capital costs thwarted restructuring efforts. The crises forced Fields Jr. to relinquish managerial control to younger executives and to accept fundamental changes in corporate philosophy, strategy, and organization. Product lines were narrowed, plants were sold, company-owned packaging and distribution divisions were sold or liquidated, and engineering, research, and planning staffs were slashed. Although there were large losses at first, the leaner and more specialized firm enjoyed great success between 1978 and the mid-1980s. Soon thereafter, however, a profitable but undervalued Warnaco succumbed to the "junk bond frenzy of the 1980s." In April 1986 the company that had been owned and controlled for over 110 years by four generations of Warners and Fields was purchased by an outside interest.
Fig Leaves and Fortunes is written for an audience far wider than professional historians or economists. It is not footnoted, and the bibliography is incomplete. The work is more descriptive and impressionistic than analytical and theoretical, and it makes little reference to academic work in either economics or history. Nonetheless, Fig Leaves draws on the author's many years of experience in the clothing business and on family and company records and recollections. It contains wonderful illustrations and photographs of fashion, advertising, and marketing materials. It provides a case study for some important theoretical analyses in business and economic history. Studies of segmented industrial development, market creation, and entrepreneurship along the lines pursued in Philip Scranton's Figured Tapestry: Production, Markets and Power in Philadelphia Textiles, 1885-1941 (1989), Susan Strasser's Satisfaction Guaranteed: The Making of the American Mass Market (1989), and Harold Livesay's "Entrepreneurial Dominance in Business Large and Small, Past and Present," Business History Review 63 (1989), can benefit from its empirical material. I recommend Fig Leaves and Fortunes to fashion buffs, business people, and to those academics in search of "insider's accounts" of business organization and strategy.
Bernard Smith is assistant professor of economics at Drew University. He is presently doing research on the uneven development of the women's clothing industry in the United States, and he is the author of "Market Development, Industrial Development: The Case of the American Corset Trade, 1860-1920," Business History Review 65 (1991).
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|Publication:||Business History Review|
|Article Type:||Book Review|
|Date:||Mar 22, 1992|
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