SIC 2253
KNIT OUTERWEAR MILLS



Manufacturers in this category are primarily engaged in knitting outerwear from yarn or in the production of outerwear from knit fabrics produced in the same establishment. Establishments that are primarily engaged in hand knitting outerwear for the trade are included in this industry. Establishments primarily engaged in knitting gloves and mittens are classified in SIC 2259: Knitting Mills, Not Elsewhere Classified. Those manufacturing outerwear from purchased knit fabrics are classified in the major group for apparel and other finished products made from fabrics and similar materials.

Products manufactured under this category include such diverse products as bathing suits, bathrobes, beachwear, blouses, body stockings, caps, collar and cuff sets, dresses, hats, headwear, housecoats, jackets, jerseys and sweaters, jogging suits, leotards, lounging robes, mufflers, neckties, pants, scarves, shawls, shirts, outerwear, shoulderettes, ski suits, skirts, slacks, suits, sweat bands, sweat pants, sweat shirts, sweaters and sweater coats, T-shirts, tank tops, ties, trousers, warm-up suits, and wristlets.

NAICS Code(s)

315191 (Outerwear Knitting Mills)

Industry Snapshot

This category in the late 1990s contained more establishments, 679, than any other category classified in Industry Group 225 (knitting mills). In 2000, according to the U.S. Census Bureau, the value of shipments from this industry was $2.91 billion. There were a reported 28,250 employees working in the knit outerwear industry that year.

The industry's major players in the late 1990s ranged from large, widely diversified Sara Lee Corp. to a number of somewhat smaller companies more narrowly focused on the production of apparel. In the latter category were VF Corp., Russell Corp., Tultex Corp., and Dyersburg Corp.

In addition to its involvement in knitwear and other apparel, Sara Lee, headquartered in Chicago, has a major stake in food products, jewelry, and cosmetics. With more than 138,000 employees worldwide, Sara Lee reported sales of $20 billion in fiscal 1999, the twelve months ending June 30, 1999.

VF Corp., based in Greensboro, North Carolina, employs 70,000 people and manufactures a broad range apparel, of which knitted outerwear is only one segment. Annual sales exceed $5 billion. Russell, headquartered in Atlanta, posts annual revenues in excess of $1 billion. Russell employs a workforce of more than 15,500.

Tultex, a major producer of active wear and college-licensed sports clothing, is headquartered in Martinsville, Virginia. With a workforce of more than 5,000 people, Tultex sales neared the $500 million mark in the late 1990s. Based in Dyersburg, Tennessee, Dyersburg Corp. reported revenue of $312 million in fiscal 1999, the 12 months ending September 30, 1999. Dyersburg boasted a workforce of more than 2,200 people as of late 1999.

Most of these companies have worked to capitalize on one of the fastest growing product areas in the textile industry and the fastest growing section of apparel textile products: leisure and active wear. Popular products in this market segment include T-shirts and golf shirts (knit shirts with collars) for men, women, and children. The T-shirt business has been one of the fastest growing in the textile industry, especially with the trend toward putting messages and company names on them.

Organization and Structure

Two broad categories of knitting machines produced the products in this classification—circular and flat. Circular machines are much more prominent in this category because flat machines generally are used in the production of sweaters. Major producers of circular knitting machines were Camber International of Leicester, England; Fukuhara Ltd. of Osaka, Japan; Mayer & Cie of Albstadt, Germany; Monarch Knitting Machine Corp. of St. Glendale, New York; Terrot Strickmaschen GmbH of Stuttgart, Germany; Tritex International Ltd. of Leicester, England; and Vanguard-Supreme of Monroe, North Carolina. Monarch and Mayer were among the major producers of flat knitting machines as well as Liba Maschinenfabrik GmbH of Naila/Bavaria, Germany, and Karl Mayer of Obertshauesen, Germany.

While it is a generally accepted practice that companies in the weaving business are fully integrated (they produce their own yarn requirements), it is also a general rule that knitting companies are not fully integrated (they buy their required yarn). Most manufacturers of knit products require so many different types of yarn that it is not economically feasible for them to produce their own. Notable exceptions to this practice in the knitting sector were the largest companies in the industry, including Sara Lee. Larger companies can produce their own yarn because they can confine specific products to certain plants and they can invest in modern yarn manufacturing machinery and equipment. Also, while producing more than most other knitting companies, larger companies do not produce as many types of products.

One similarity between large companies such as Sara Lee to the other knitting companies that are not integrated is that knitting operations are not housed in the same buildings as yarn manufacturing operations. Dyeing and finishing the knit fabrics is, however, usually located in the same plant with the knitting operation.

Each week, Sara Lee's Mountain City plant produced more than 1 million pounds of 100 percent cotton yarn for the company's Hanes Beefy-T T-shirt products. The plant was modern not only in its machinery and equipment, but it also employed state-of-the-art electronic information systems technology and the latest in management techniques. At the fully automated plant, bales of cotton were manually unloaded from the delivery trucks, but no one touched any part of the product after that until palletized cartons of yarn were ready to be put back on the same trucks for shipment to Sara Lee's knitting plants.

The Mountain City plant also was fully computerintegrated. A computerized network system monitored each machine for quality, production, and efficiency. A series of alarms and shut-down capabilities alerted teams if problems occurred.

The unique management technique at Mountain City broke industry norms. There were no supervisors except the plant manager. The plant operated 24 hours a day, seven days a week, with two 12-hour shifts. Each shift had two 20-person teams that were responsible for each half of the plant. These teams patrolled operations, monitored electronic information systems, and controlled the manufacturing facility. Teams hired and fired team members and participated in extensive training in such areas as problem solving and consensus decision-making. All employees were salaried and were given business cards. As a symbol of ownership, a tree was planted on the plant's property with each employee's name recorded on a plaque displayed by the tree. In addition, all employees were paid an incentive bonus based on plant production and quality evaluated at the knitting plant.

Background and Development

While the basic principles of knitting have not changed over the years, the recent use of electronic technology has tremendously enhanced the process. The most prominent infusion of electronics has been use of CAD/CAM (computer-aided design/computer-aided manufacturing) systems. The best known system was manufactured by Monarch Design Systems, which produced a system that increased creativity, productivity, and versatility. Products designed to be knitted on an electronic knitting machine were transferred onto a 3.5 inch disk and then loaded on a Macintosh computer. The disc was then transferred to the knitting machine by a loading device on the knitting floor. This innovation, like new electronic processes in weaving, reduced to hours (in some cases minutes) processes that once took weeks.

Another form of electronics used in the knitting industry was a program for monitoring performance of the process as well as production of the product. One such system was STARFISH (start as you intend to finish), developed by Cotton Technology International, of Manchester, England. STARFISH was a set of computer programs that related the properties and dimensions of a knitted cotton fabric to the knitting parameters and the finishing route. By the using such programs, manufacturers and buyers could quickly calculate the performance of the most popular fabric constructions after dyeing and finishing. Thus, major savings in development time and money were achieved and decision making enhanced.

The knitting industry also took advantage of the textile industry's advancements in using technology to control costs. The American Textile Partnership (AMTEX) collaborated on many projects to increase efficiency, including fostering research and development between the integrated U.S. textile industry and national laboratories. The Demand Activated Manufacturing Architecture (DAMA) project was developing a communications system between the textile industry and the consumer. The rapid communication allowed the industry to quickly respond to changes in the marketplace with appropriate manufacturing processes and inventories—thereby cutting overall costs.

Current Conditions

Passage of the North American Free Trade Agreement (NAFTA) augured well for manufacturers of products in this classification in the late 1990s. North American countries made up the U.S. textile industry's most important export markets, and demand for U.S. made and U.S. style products in Mexico was expected to increase, especially for affordable T-shirts, sweat suits, and jogging suits.

However, although the use of leisure and active wear increased in the late 1990s, competition from exports began to undercut business for U.S. industry leaders. The value of industry shipments fell from $4.35 billion in 1997 to $2.91 billion in 2000. As a result the number of employees in the industry fell from 40,154 in 1997 to 28,250 in 2000. The costs of materials declined from $2.27 billion to $1.69 billion over the same time period. The weakening of the North American economy at the turn of the twenty-first century also undermined the performance of industry leaders.

Further Reading

Brookstein, David. "U.S. Textiles Has Global Opportunities." Textile World, February 1997.

"DAMA Pilot Project Under Way." Textile World, October 1996.

Hoover's Online. Hoover's Company Capsules, 1999. Available from http://www.hoovers.com .

Morrissey, James A. "Textile Firms Turn Trash to Treasure." Textile World, February 1997.

"NAFTA Boosts U.S. Textiles." Textile World, January 1997.

Richard, Robert. "Market Outlook." Textile World, March 1996.

Rozelle, Walter. "Business Outlook." Textile World, March 1996.

Textile Highlights. Washington, D.C.: American Textile Manufacturers Institute, March 1994.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .

U.S. Census Bureau. 1997 Economic Census. Washington, D.C.: GPO, 1999.

U.S. Department of Commerce. U.S. Industry and Trade Outlook '99. Washington, D.C.: GPO, 1999.



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