Seams Sewn Long Ago: The Story of Coats the Threadmakers by Brian Coats

Author:Brian Coats [Coats, Brian]
Language: eng
Format: epub
Publisher: UNKNOWN
Published: 2013-11-28T00:00:00+00:00

Chapter 23

Competition Reaction and a New Century

The wise learn many things from their enemies.

Aristophanes

There is little doubt that the companies that made up the new J. & P. Coats Ltd. were the cream of the crop. Several of the remaining UK sewing thread firms had offered to join the Coats group, but had been turned down on the basis that they would weaken the newly formed conglomerate. They had suffered from the various price wars and were just as fed up as Coats was with their arbitrary nature and the resulting losses. Most of them had formed an Association in 1887, but it had been largely ineffective and had lapsed after a number of years.

In the face of the new Coats alliance, the need for a more permanent amalgamation was recognised, and in December 1897, fourteen companies got together to form the English Sewing Cotton Co. (ESC). This was a real hodgepodge. Only eleven of them made or sold sewing thread and several specialised in linen or silk. They all retained their individual identity (i.e., they continued to operate largely as before) but were reconstituted as limited liability companies, all owned by ESC, who had a board of seventeen directors representing all but one of the companies. They subsequently absorbed R. F. & J. Alexander from Paisley and Alderns of Stockport, effectively converting the British Sewing Thread market into a two-horse race.

Things did not go well for ESC. There were conflicts with Coats,[116] mainly in Cuba and Spain, where Alexander’s had a business. Their costing methods were inefficient, and they did not adopt the Coats system (whereby “every last cent could be traced”), even though it was offered to them. This was only one manifestation of their incompetent management, who struggled with old-fashioned machinery and ideas, and a stubborn belief in their own way of doing things. Excess capacity was identified but was not always idled, and even when it was, as with three plants in 1903, the cost was not written off the books.

Coats had already sold 100,000 of their shares when ESC first asked for help in 1899. Their profits had never been anything to write home about, but fell from £173,000 in 1898 to a loss of £127,000 three years later. The shares fell from £2/7/6d (£2.37½) to 9/6d. (£0.47½) over the period. Mr. Lawton, one of the directors, talked of "the gross over-capitalisation, the questionable finance, the extravagant and inefficient management, the bad buying, bad manufacturing, and bad selling”.[117] Not a formula for success.

The shareholders now demanded a committee to reorganise the business and none other than Mr. Philippi was put in charge of this. As a result, Algernon Dewhurst stepped down as chairman, the board was reduced to seven, with only two of them coming from the original vendors, and a more economical salary structure was introduced, with performance incentives incorporated. Coats, through Philippi, had effectively taken English Sewing under their wing and at least partially under their thumb and, although this didn’t solve all

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.