Lee Apparel Company, Inc. Business Information, Profile, and History

History of Lee Apparel Company, Inc.

Lee Apparel Company, Inc. is the second largest manufacturer of jeans in the United States. The company, which got its start in the dry goods business before moving into the production of denim clothing, leads in sales of women's jeans and holds a significant share of other clothing markets as well. After focusing its production on work clothes throughout the first half of the twentieth century, Lee took advantage of the sales boom in fashion jeans throughout the 1960s and 1970s. Although its market decreased considerably during the 1980s, the company has been rejuvenated through its introduction of innovative new denim processing and finishing techniques.

Lee was founded in 1889 by Henry David Lee and several business associates in Salina, Kansas. As a teenage hotel clerk in a small Ohio town, Lee saved his earnings and, investing them skillfully, was eventually able to take over the Central Oil Company, which distributed kerosene oil for lighting. Stricken with tuberculosis and advised by doctors to relocate to a more hospitable climate, Lee sold his business to John D. Rockefeller's Standard Oil Company in the late 1880s and moved to Kansas, bringing several associates from his oil company with him. In Kansas, Lee and his associates sought out a five-year charter from the state to run a wholesale grocery business that would sell fine food products under several different brand names, including "Mother's Style," "Cadet," and "Summer Girl." The company's start-up financing totaled $100,000, with one quarter of it reportedly contributed by the town of Salina.

Lee's business rapidly prospered, benefiting from its position as the largest food supplier between Denver and Kansas City. The market it served was enjoying a period of rapid growth, as it developed from frontier to a more settled, prosperous area. Within its first ten years, the company had branched out into three additional businesses, the H. D. Lee Flour Mills Company, the Lee Hardware Company, and Kansas Ice and Storage. Soon, the Lee company was also selling sewing materials, furnishings, paper goods, and school supplies. By the turn of the century, Lee's enterprise represented the largest wholesale grocery and dry goods business in the Midwest.

The company experienced a setback on December 4, 1903, when its headquarters in Salina, and all its inventory, burned to the ground. Although losses totaled $575,000, the company recovered quickly, building two new, fireproof buildings on its property.

The most important addition to the Lee company's product line came in 1911, when Lee became frustrated by infrequent deliveries of work clothes, such as overalls and dungarees, from a manufacturer in the east. Recognizing the benefits of being able to produce the needed items himself, and encouraged by the continuing growth of the American population and economy, Lee decided to open a garment factory in Salina to produce overalls, jackets, and dungarees.

Two years later, Lee began manufacturing the item that would make the company famous. Legend has it that the idea originated with H. D. Lee himself, who noticed that his chauffeur needed a sturdy one-piece outfit that could easily be pulled over his uniform when he needed to service Lee's car. The Lee Union-All basically consisted of a jacket and a pair of work pants sewn together at the waist, and it proved practical for farm and factory workers who wanted to shield themselves from the dirt of their work, which got between their clothes and skin.

By 1915, the charter of the Lee company had been expanded to account for its new interest in clothing manufacturing, and the company had opened a second factory, designated for the exclusive manufacture of Union-Alls, in Kansas City, Kansas. In 1916, two more factories were opened, in Kansas City, Missouri, and South Bend, Indiana.

The following year, Lee became the first company in the apparel industry to introduce a nationwide advertising campaign, placing a full-page ad in the Saturday Evening Post. The company's business received a further boost during this time as the United States entered World War I, and Lee was asked to manufacture as many Union-Alls as possible for the U.S. Army. The Lee garment became the official fatigue uniform for American soldiers fighting in Europe.

After the war's end, Lee continued to expand, moving into a new nine-story building in Kansas City, Missouri, in 1919, which replaced its smaller Kansas City, Kansas, facility. The following year, Lee launched its first consumer promotion campaign, introducing a ceramic doll, named "Buddy Lee," that wore miniature Lee clothes manufactured in the company's factories.

Over the next two years, Lee continued to move away from a broader background in groceries and dry goods and toward its new identity as a clothing manufacturer. As the company narrowed its product line, it also simultaneously embarked upon a dramatic geographic expansion, opening a new plant and warehouse in Minneapolis as well as storage facilities in San Francisco and Los Angeles. Also during this time a factory in Trenton, New Jersey, was closed, so that a larger one could be opened.

Throughout the 1920s, Lee continued to develop its line of apparel, introducing new fabrics and new designs for special purposes. In 1924, the company produced pants made for seamen and loggers, and also began to manufacture cowboy pants made of heavyweight 13-ounce denim, which would come to be known as "jeans." The following year, the company introduced Lee Jelt Denim, an 11-ounce cloth that featured twisted threads that provided strength and durability. In 1926, there was a flurry of innovation, as jeans with zippers and U-shaped saddle crotches as well as work clothes with sliding fasteners were brought to market. Furthermore, Lee began to offer tailored sizes, which corresponded to waist and inseam measurements. The following year, color-fast dyed herringbone twills and hickory striped denim were incorporated into the company's product line. In addition, Union-Alls fastened with newly-invented zippers were renamed "Lee Whizits" after a consumer contest to choose a new name.

In 1928, H. D. Lee died of a heart attack at the age of 66, and control of the company was left to Leonard C. Staples, the husband of Lee's niece. Under the guidance of Staples, Lee continued to post strong gains in sales until the end of the decade.

With the coming of the Great Depression in the wake of the stock market crash in 1929, however, Lee's fortunes suffered. A sharp slump in sales caused declines in profits, and the company was forced to reduce wages. Nevertheless, within five years Lee was again profitable and, predicting its best performance since the start of the decade, the company was able to declare a special dividend to stockholders.

In 1936, Lee moved to identify itself more fully with the Western world of cowboys and rodeos by forming the Rodeo Cowboys Association. The company also opened a plant in San Francisco to produce its trademark denim cowboy pants, now known as Lee "Rider" pants. For the first time, the company's logo was rendered in a "hair-on-hide" leather label that featured the letters of its name connected in a way that resembled the mark of a cattle brand. By 1939, Lee had become the largest producer of work clothes in America, as sales reached $6.4 million. With six plants in operation, the company was able to fully restore its pay rates to their pre-Depression levels.

Soon after Lee had fully returned to profitability, the United States entered World War II, and the country's economy was once again thrown into turmoil as it concentrated its efforts on wartime production. With fabric scarce under a government rationing plan, Lee was forced to curtail its manufacture of products for the civilian marketplace, causing shortages of its goods for consumers. However, the company did convert its factories to manufacture clothing for the war effort. In 1943, Lee changed its official name to "H.D. Lee Company, Inc.," dropping the word "Mercantile" to better reflect its primary emphasis on garment manufacturing.

With the war's end in 1945, the U.S. economy entered a period of rapid growth, and Lee expanded along with it. The company began to market its products not just to working people, who needed the rugged garments for practical reasons, but to upper middle-class Americans, who were caught up in the romance of the West, eager to visit dude ranches, and beginning to regard denim pants as fashionable rather than merely functional. During this time, Lee began to purchase other clothing manufacturers to increase its production capacity. Eloesser-Heynemann Company, a workwear maker based in San Francisco, was bought in 1946. Three years later, the Bruce Company, a Kansas clothing maker, was also purchased. Also in 1949, Lee introduced Lady Lee Riders for women, specifically designed to fit women better than standard men's jeans.

At this time, Lee shed a remnant of its past as a foods wholesaler when it sold its former grocery warehouse in Salina, Kansas. The company left the food business altogether in 1950 when it turned over its grocery division to Consolidated Grocers of Chicago for about $3 million. With the money earned from this sale, Lee sought to further expand its garment business.

Throughout the 1950s, Lee struggled to keep up with the increasing demand for its products. The company continued to acquire factories, including Sun Garment of St. Joseph, Missouri, and began building new facilities as well as adding on to those it maintained. One new factory, built in the town of Chetopa, Kansas, gave its name to a new heavy-duty twill fabric that Lee began to market in 1952 under the name Chetopa Twill.

From 1952 to 1956, Lee also moved to strengthen its identity as a purveyor of Western wear by bringing in the founder of the Cowboy Hall of the Fame and the Western Heritage Center to serve as corporate chairperson. With the company's new image, production and sales of Lee products continued to grow.

In 1954, the company introduced "Leesures," its entrant in the new and rapidly growing leisure sportswear market. Three years later, the company began to market clothes for boys under the brand name "Double Knees." Lee ended the decade with its introduction of the Lee Westerner line of products, which featured dressy white jeans and jackets. In 1961, the style of this line was further refined with the addition of center creases and narrower pants legs. Lee promoted this line of clothing with the slogan, "the clothes you need for the life you lead," hoping to appeal particularly to high school and college students.

By the 1960s, as postwar baby boom had begun to wind down, denim jeans were more and more becoming the uniform of the younger generation. The company worked to meet the demand for its product as jeans exploded in popularity. Additional plants were opened in Virginia, Georgia, Louisiana, Missouri, Kansas, and Texas. In 1964, five years after its establishment of an international division, Lee opened its first overseas factory, in Sint Niklaas, Belgium.

Also that year, Lee introduced stretch denim, to appeal to young women, and "no iron" permanent press slacks for men, under the "Lee Prest" brand name. These innovations contributed to a continuing record of profitability, which began to attract the attention of investors interested in either acquiring the company or merging it with their own operations. Lee's directors turned down an offer from the Work Wear Corporation in 1967, as well as a proposal from U.S. Industries the following year. In 1969, however, the shareholders of the company agreed to sell their assets to the VF Corporation of Pennsylvania, which manufactured Vanity Fair lingerie.

With the infusion of capital from the company's sale, Lee was able to invest in expanded production capabilities. The company modernized its manufacturing facilities in the United States and also became involved in joint ventures overseas, entering into agreements with factories in Scotland, Belgium, Spain, Australia, Brazil, and Hong Kong.

As Lee moved into the 1970s, the company continued to vary its offerings to meet current fashion trends. Flared leg bottoms on jeans and leisure pants were introduced. In 1972, the company began to sell a polyester double-knit leisure suit, which it marketed in a wide variety of colors as a sporty alternative to the business suit. In 1973, Lee introduced jeans designed especially for women under the "Ms. Lee" brand name. The company's long term commitment to jeans tailored specifically for women gave it a strong leading spot in this market. Six years later, the company formed a Youthwear division to market products for children.

With the end of the 1970s, however, came the end of the rapid expansion of the jeans market. Industry-wide, sales for denim pants peaked in 1981, and then went into a steady decline. Lee was forced to close several plants in response to the slump. In an effort to offset declines in profits from dropping sales, Lee invested further in modern equipment, to make its manufacturing process as efficient as possible. The company installed automatic cutters to produce pieces for 32 pairs of jeans at once, as well as automatic belt loopers and pocket setters.

In addition to updating its equipment, Lee also began to experiment with the very essence of the garments it manufactured, its denim. Traditional jeans had been sprayed with corn starch as a fixing agent, resulting in a garment that shrunk and faded dramatically when the customer washed it. In an effort to provide jeans that fit more accurately, Lee began to pre-wash its own denim, a step known as "wet processing." In 1982, "stone washed" jeans were introduced. This was followed by "acid-washed" denim, which produced an even more faded look.

In addition to innovation in its basic product line, in 1983 Lee expanded its offerings to include products for infants and toddlers, in an effort to appeal to faithful customers of the 1960s and 1970s who had by this time become parents. The company also began to sell "Dress Blues" made of denim that did not fade, stretch jeans, corduroy jeans, and denim with cable stripes. In 1986, Lee began marketing looser pants and pleated pants under the label "Relaxed Riders," for girls and women, and "Easy Riders" for men.

Continued consumer demand for denim with novel finishes led Lee to further experimentation with its wet processing. A wide variety of objects, including bottle caps, golf balls, shredded tires, ropes, and wood, were thrown into washing machines with denim pants, producing a look referred to as "distressed" in the fashion industry. In 1986, the company introduced "Frosted Riders," for which Turkish pumice stones were used to soften the fabric. Anticipating continued demand for washed denims, Lee made a large investment in washing machines and laundries. Furthermore, the company engaged experts in chemical and mineral washes, and acquired sources of raw materials (such as rocks) in Mexico, Greece, and the western United States for use in their processes. By the end of the 1980s, the company was preparing its fabrics in over 70 different ways, marketing such products as "Glacier," "Pepper," and "Bubble" denim.

Innovation in processing was complemented by development in equipment, as Lee put in place computer technology to speed up its manufacturing processes. The company opened a new distribution facility in Mocksville, North Carolina, in January, 1990, to warehouse and ship its products. By 1992, an industry-wide return to basics had pushed up sales of jeans once again, and Lee introduced "Lee Basics," designed to appeal to younger consumers. Anticipating higher sales, the company announced that it would add 570 jobs to its payroll.

As the Lee company moved into the mid-1990s, it had a long history and a venerable brand name to its credit. As a significant player in the American jeans industry, it should look forward to years of continued growth and prosperity.