Pendleton Woolen Mills, Inc. Business Information, Profile, and History

Company Perspectives:

Pendleton continually strives to maintain its well-deserved reputation by using the best, newest and most innovative state-of-the-art techniques and resources to create a year-round selection of wool and non-wool products that others strive to imitate. By balancing the offering with other non-wool garments that complement the "core competency"—wool. Pendleton provides a full line of merchandise that answers today's consumer request for value, comfort and classic good looks.

History of Pendleton Woolen Mills, Inc.

A fifth generation family firm, Portland-based Pendleton Woolen Mills, Inc. is one of a handful of family-owned U.S. apparel and textile manufacturing companies still thriving in the early 21st-century's global economy. The company, whose motto is "from fleece to fashion," remains vertically integrated, including operations for scouring, spinning, dyeing, and weaving wool into fabric; manufacturing men's and women's clothing; and retailing its own products, which are also sold in department stores. The company has plants in Washington, Nebraska, and New Hampshire. In the late 1990s, in the wake of NAFTA and GATT, Pendleton moved about half of its sewing operations offshore.

The Early Years: 1893–1909

The Pendleton Wool-Scouring and Packing Co. incorporated on December 20, 1893, in Pendleton, Oregon, the first scouring mill east of the Cascades. Its owners and operators, two Boston wool brokers, wanted to cut rail costs by cleaning the wool before it was shipped to eastern mills. Their enterprise followed the settling of the Pacific Northwest in the mid-1880s, which opened up large tracts of land for ranching sheep. The development of the railroads offered a means of moving the animals and their products to market.

The Pendleton Woolen Mill, which began production in the fall of 1896, was a natural consequence of the scouring mill. Using the clean water of the nearby Umatilla River for washing and dyeing, the mill operated seasonally from May to November. The company wove the traditional designs used by the different Native American tribes of the region into the trade blankets it produced. It sent a factory representative to visit the reservations throughout the West to learn the colors and designs required by each tribe. Pendleton also sold blankets to businessmen who resold them to the miners of the Klondike gold fields.

The mills profited due to increased freight tariffs imposed on shipping scoured wool. In 1895, the company enlarged the scouring plant and converted it to a woolen mill that made bed blankets and robes for Native Americans. Pendleton blankets, renowned for their quality, grew in popularity as far away as the East Coast, and the company capitalized on the Indian lore surrounding its designs. In 1902, it introduced photographs of well-known Indians of various tribes dressed in Pendleton robes as a form of advertising. In 1904, the company launched its famous blue and gold label, which it sewed into the smoking and fancy outing jackets it manufactured as well as its Indian blankets and robes.

By 1905, however, the mill grew idle, due to continued recession and an overabundance of wool. Then in 1909, brothers Clarence, Roy, and Chauncey Bishop purchased the Pendleton scouring and weaving mills, with family and town backing, and constructed a new, more efficient mill with the aid of a local bond issue. The Bishop brothers came from a family of mill owners. In the 1860s, their English grandfather, Thomas Kay, had helped organize Oregon's second woolen mill in Brownsville, whose weaving operation he oversaw. He soon became the company superintendent. In 1889, Kay opened his own mill in Salem, Oregon. Kay's daughter, Fannie, and later, her husband, C.P. Bishop, a Salem, Oregon, boys' and men's wear merchant, took part in mill operation and management. Fannie and C.P. were the parents of the three Bishop brothers.

In September 1909, the Bishop brothers resumed production of Indian blankets using Jacquard looms. Trade rapidly expanded from the Nez Perce nation near Pendleton to the Navajo, Hopi, and Zuni nations. Pendleton blankets became these tribes' basic apparel, ceremonial garb, and a standard of value for trading and credit among nations. So synonymous was the company name with trade blankets, that all trade blankets eventually became known as "Pendletons." In 1910, the brothers opened their first retail store in Seaside, Oregon, and in 1912, expanded production into other areas of woolen manufacturing, adding a second weaving mill in Washougal, Washington. This mill had the capacity for lighter fabrics, including suitings, and for the next 12 years, the plant produced fabric for suits and topcoats. The company moved its headquarters to Portland in 1919 to be closer to its main mill.

The Growth of an American Symbol: 1920s-40s

Then in 1924, the Pendleton virgin wool men's shirt was born, a colorful, plaid variant on the utilitarian men's work shirt of the era, using shirting material woven in Washougal. The shirt's cut was long and roomy and the fabric offered greater comfort, warmth, and durability than had previous work shirts. Ranchers, loggers, and sportsmen quickly adopted the shirt and, by 1929, the company was making a full line of men's wool sportswear.

Throughout the 1930s and 1940s, Pendleton grew under the direction of Clarence (C. M.) Bishop. Chauncey Bishop had died in 1927, and Roy Bishop had left the company in 1918 to manage the Oregon Worsted Company. Pendleton was now in total garment production, from raw wool processing to the manufacture of ready-to-wear clothes, and its products were in steady demand. In 1932, Pendleton was awarded the commission to produce a special blanket for Olympic athletes. During the first half of the 1940s, Pendleton devoted a large share of its operation to producing uniforms, blankets, and sleeping bags for American soldiers serving in World War II. After 1945, as the apparel division thrived, Pendleton expanded the production of non-wool garments to complement its woolen coordinates. In 1949, after market research identified a need and an opportunity for virgin wool classic sportswear, the company entered the women's wear market with its instantly popular 49er jacket.

During the 1950s and 1960s, Pendleton became something of an American symbol. Its finely crafted, long-lasting items, known as "investment clothing," became a standard of apparel in many well-to-do households. In 1955, along with Pepsi and Carnation, Pendleton opened an old style retail shop in Frontier Town at Walt Disney's newly launched theme park. In 1956, the women's wear division introduced its reversible, plaid pleated skirt, which joined the 49er jacket in furthering the company's branded image. In 1960 Pendleton pioneered washable wool, and the singing group that would later become The Beach Boys took form as the Pendletones, adopting the company's name and shirt as their uniform.

The company acquired several new plants throughout this period to accommodate its increased production needs. In 1941, it purchased the Columbia Wool Scouring Mill, which it had leased since 1923. In 1946, it opened a facility in Omaha, Nebraska. In 1955, it purchased a plant in Portland, Oregon, and then, in 1956, in an interesting twist of events, Pendleton acquired a second Portland facility from the Oregon Worsted Company, the company Roy Bishop had left Pendleton to manage. By 1970, a year after the death of Clarence M. Bishop, the company had two sewing operations in Portland, a plant in St. Helens, Washington, and three plants in Nebraska. It purchased the Dorr Woolen Co. in New Hampshire in 1982, and added facilities in Council Bluffs, Iowa, in 1985.

Decline Within the Industry, Move to Overseas Manufacturing: 1970s-90s

In 1970, Pendleton introduced its own truck fleet for transportation of its goods, and in 1980, the company expanded international distribution with the introduction of Pendleton Country Japan. However, throughout the 1970s and into the 1980s, the apparel industry experienced a steady decline. Pendleton's St. Helens plant closed in 1986. While many other apparel manufacturers moved operations overseas to capitalize on lower labor costs, Pendleton, under the direction of C.M. Bishop II and Broughton Bishop, continued to manufacture its products in the United States and advocated fair rules regulating international trade. In the late 1980s, in response to buyers' return to classic styles and with women's wear making up 65 percent of the company's total sales, it introduced the redesign of its women's 49er shirt. It also began operating its own retail stores as department stores were in decline.

Nonetheless, from 1989 to 1993, when Richard Poth took over as president of the business, sales declined about 36 percent with total units down about 28 percent although the early 1990s' return to casual clothing and the plaid items favored by grunge fashion helped the company somewhat. Pendleton also benefited from increased interest in the culture of the American Southwest. With women's wear still 65 percent of sales, men's wear 30 percent, and blankets and piece goods 5 percent, the company began directing its marketing efforts toward a broader range of men's demographic groups. Pendleton also focused on developing a 12-month business by manufacturing clothes in lighter weight fabrics. In 1992, it decided to test run the production of women's blouses in Mexico as a cost-savings measure.

By 1994, less than 5 percent of Pendleton's total output was being produced offshore, but company officials announced publicly that in order to remain competitive the company would continue to make use of low-cost foreign labor to manufacture cotton women's blouses. In 1996, the company moved the manufacture of men's jackets and shirts to Mexico. Management, however, remained opposed to the North American Free Trade Agreement (NAFTA) and the global General Agreement on Tariffs and Trade (GATT) for what it viewed as its corollary reduction of U.S. apparel and textile jobs. It blamed the 1996 shut down of its manufacturing operations in Council Bluffs and the 1998 closings of its Milwaukee, Portland, and Fremont, Nebraska plants on international trade agreements. Together the two closings accounted for layoffs of about 9 percent of Pendleton's nationwide workforce. The company still operated its second Portland plant and the plant in Washougal, Washington.

In 1994, the company also embarked on an effort to re-tailor its corporate image, changing its logo for the first time and consolidating and expanding clothing lines. It also instituted environmentally sensitive manufacturing renovations and computerized ordering and inventory management systems. The new merchandising strategy improved sales, while shifting the company's business away from its classics. In 1996, as part of an effort to explore other market niches, Pendleton introduced its first mail-order catalog, inaugurated its web site, and opened four more company-owned retail outlets. It introduced more casual women's clothes as well as a line of dressier outfits. The company by then employed 1,700 people and enjoyed annual sales estimated at about $150 million, about 60 percent of which comprised department store business. By 1998, women's casual wear accounted for 30 percent of all women's apparel sales—up from 10 percent five years earlier—and all catalogue items were also available online.

In the late 1990s, Pendleton looked increasingly overseas, both for production and sales. By 1997, it manufactured 40 percent of its clothing in Mexico, and in 1999, it granted Daiwa Seiko, Inc. the right to manufacture shirts and sweaters and sell them under the Pendleton name in Japan. The company also opened new shops in Tokyo, Kobe, and Sapporo, bringing its total number of Japanese retail outlets to four. These, combined with the roughly 70 U.S. retail stores, accounted for approximately 25 percent of revenues when C.M. Bishop III took the helm.

As part of its continuing effort to reposition itself, reach a broader audience, and update its image, the company reorganized its four divisions—men's wear, women's wear, retail, and blankets— into one single vertical entity with a focus on brand marketing in 2000. It dedicated about $1 million to its media budget and embarked on a new advertising campaign with the tag line: "Pendleton. Good for Life." The company, which now sold its products in department stores and its own retail stores, via catalogue, and through the Internet, had not grown much in the past several years, yet still enjoyed yearly estimated sales of $120 million to $150 million. Its men's wear now made up about 20 percent of sales, women's wear 50 percent, blankets 15 percent, and textiles 15 percent. Its original blankets had become collector's items. When, in 2001, it became the official men's casual apparel provider for CBS Sports crews, it appeared as much a symbol of Americana as ever.

Principal Subsidiaries: Dorr Woolen Co.; Columbia Wool Scouring Mills.

Principal Competitors: Boucher Boys & the Indian; Pillowtex Corporation; The Talbots, Inc.; WestPoint Stevens Inc.

Chronology

• Key Dates:
• 1893: Pendleton Wool-Scouring and Packing Co. incorporates.
• 1896: Pendleton Woolen Mill begins production.
• 1904: The company launches its famous blue and gold label.
• 1905: The mill falls idle, due to continued recession and an overabundance of wool.
• 1909: Clarence, Roy, and Chauncey Bishop purchase the Pendleton scouring and weaving mills.
• 1910: The company opens its first store in Seaside, Oregon.
• 1912: The brothers expand production into other areas of woolen manufacturing, adding a second weaving mill in Washougal, Washington.
• 1918: Roy Bishop leaves the company to manage the Oregon Worsted Company.
• 1919: Pendleton moves its headquarters to Portland, Oregon.
• 1924: The first Pendleton virgin wool men's shirts are sold.
• 1927: Chauncey Bishop dies.
• 1949: The company enters the women's wear market with its 49er jacket.
• 1955: Pendleton opens a shop at Walt Disney's newly launched theme park.
• 1956: Pendleton's women's wear division introduces its reversible, plaid pleated skirt.
• 1960: Pendleton pioneers washable wool.
• 1969: Clarence M. Bishop dies; his two sons take over the business.
• 1970: Pendleton introduces its own truck fleet for transportation of its goods.
• 1980: The company expands international distribution with the introduction of Pendleton Country Japan.
• 1992: Pendleton manufactures women's blouses in Mexico.
• 1993: Richard Poth becomes president of the business.
• 1996: The company moves the manufacture of men's jackets and shirts to Mexico; begins catalogue and Internet sales.
• 1999: Pendleton grants Daiwa Seiko, Inc. the right to manufacture shirts and sweaters and sell them under the Pendleton name in Japan; C.M. Bishop III replaces Poth.