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Blair Corporation

 


Address:
220 Hickory Street
Warren, Pennsylvania 16366
U.S.A.

Telephone: (814) 723-3600
Fax: (814) 726-6123


Statistics:
Public Company
Incorporated:1910 as New Process Co.
Employees: 2,300
Sales: $506.8 million (1998)
NAIC:45411 Electronic Shopping and Mail-Order Houses


Company Perspectives:


Providing quality products at reasonable prices, offering credit appropriately and unconditionally guaranteeing everything we sell are aspects of connecting with customers and building strong, lasting relationships with them--in essence, delivering on our promise ... 'Because Good Clothing Doesn't Have to Cost a Lot.'


Company History:

Blair Corporation is a retailer of low- to mid-priced men's and women's clothing and home products. Apparel accounts for approximately 88 percent of the company's sales, with home products making up the remainder. Blair primarily sells its products via direct mail merchandising pieces, including multi-sheet, letter-style mailings and catalogs. It also operates two retail stores--one in Pennsylvania and one in Delaware--and two outlet stores in Pennsylvania. The company's products are manufactured by a number of independent suppliers, many of whom produce merchandise based on Blair's specifications. Blair receives and processes orders in its corporate offices in Warren, Pennsylvania. Orders are filled at and shipped from a nearby distribution center in Irvine, Pennsylvania.

1910--30: A Suitcase Full of Raincoats and a Good Idea

Blair Corporation was founded and built by John L. Blair, a young law student at the University of Pennsylvania. In 1910, Blair was nearing the end of his law studies when a classmate approached him with a business venture. The classmate, who had inherited a raincoat factory, wanted Blair to become the company's sales manager. Blair agreed to take a suitcase full of raincoats home with him for Easter break and consider the offer. Making sales calls at various stops on his way home, he managed to sell a single black raincoat to an undertaker he encountered in a Kane, Pennsylvania, shop. The shop owner, however, declined to carry the coats. Blair's experience convinced him that the best way to sell the coats was to market them directly to consumers. He was also convinced that the best way to reach those consumers was through the mail.

Calling his venture the New Process Rubber Company (because the raincoats had a layer of rubber between two layers of cloth), Blair borrowed $500 to print and mail advertising flyers to 10,000 undertakers across the nation. In response, he received 1,200 orders for the coats, which his classmate quickly set about producing. Soon, customers were asking Blair to offer other reasonably priced clothing items by mail. He obliged by expanding his product line, and the business grew at a rapid pace. Blair's younger brother Harold, who was still in high school, began helping out at the New Process Company on weekends.

In 1920, Blair added a small retail store to his mail-order business and made another of his brothers, Lester, its manager. The store, which was located near the company's headquarters in downtown Warren, was soon joined by another in Jamestown, New York. The direct-mail side of the business continued to grow, also. Although Blair had purchased several existing buildings in Warren to serve as warehouses, he soon discovered that more space was needed. In 1927 and 1928, a new, three-story building was added to the New Process Company's facility.

The late 1920s also marked the company's transition from a privately held company to a public one. In 1927, shares of New Process Company began trading on the American Stock Exchange. It was only the fifth company to be listed on the new exchange.

Meanwhile, the company's product line continued to expand. In addition to apparel, which was offered on a seven-day, free-trial approval basis, Blair began experimenting with a more diverse line of merchandise. Some of the items available to New Process customers in the 1920s and 1930s included electrical appliances, cameras, auto tires, motor oil, fans, healthcare products, and perfume. The company also offered a three-volume set of books, written by its own executives and entitled The Book of Success.

1930s-60s: Setbacks and Advances,

The advent of Depression spelled hard times for businesses all across America, and New Process was no exception. The generally bleak economic conditions were only made worse for the company by an October 1933 fire that destroyed many of its buildings, an estimated $500,000 loss. Blair worked tenaciously to ensure that New Process kept running, however. The company's operations resumed within ten days of the fire, and a new building was erected to house the company within a year.

From the late 1930s through the early 1950s, expansion was the watchword at New Process. Increases in sales resulted in a continuing need for more employees, more warehouse space, and more equipment. The company responded both by purchasing buildings adjacent to its property and by building additions to its existing facility. Through a series of property improvements, the New Process headquarters eventually evolved into a sprawling complex capable of handling its ever-increasing order processing and fulfillment operations. The completed plant covered almost an entire city block.

One particular expansion caught the attention of the local consumers. In 1941, the company purchased a former hardware company building, which came to be known as 'the Annex,' for use as a warehouse. New Process also used the Annex to hold annual warehouse sales, which gave shoppers the chance to get rock-bottom prices on closed-out and overstocked merchandise. The sales caused quite a stir, drawing thousands of people from miles away. It was not uncommon to see customers lined up for blocks outside the Annex during one of its warehouse sales. Some even camped on the sidewalk overnight to ensure a good place in line.

While expanding physically, the company also made gains in productivity by implementing new equipment. One such piece of equipment was the addressograph, a machine that used stamped metal plates to print addresses. For several decades, New Process workers had used typewriters to address each of the company's thousands of mail pieces individually, a tedious and labor-intensive task. The introduction of the addressograph near the middle of the century provided a great boost in efficiency and productivity.

The addressograph was but a humble forerunner, however, to innovations that were to come. In 1965, New Process installed its first computer system: a small IBM with auxiliary machines. In 1969, the addressograph was replaced by electronic data processing equipment. In place of the six million metal address plates--which occupied thousands of square feet of floor space--the company's entire mailing database was stored on 80 reels of EDP tape. Soon, computers were used in virtually every department at New Process, from order processing to advertising to mailing.

The 1960s also marked the passing of the company's founder and leader, John Blair, and of his brother Lester, who was then serving as vice-president and advertising manager. Upon Blair's death his son, who was also named John, assumed leadership of the New Process Company. He had previously been the company's personnel director.

1970s: A New Home for Distribution

As the 1970s got underway, New Process celebrated the mailing of its two-billionth advertising piece. The company also opened two new outlet stores--one in Warren, and one in Erie, Pennsylvania--and expanded several of its departments to accommodate the increasing number of mailings and product shipments.

In 1971, it appeared that New Process had finally outgrown its long-time home in downtown Warren. As a result, the company acquired 189 acres of land near Irvine, Pennsylvania--which was just southwest of Warren--and planned to build a new complex to house its merchandise handling operation. The 348,000-square foot distribution center opened in 1973, and soon all warehousing, shipping, and returns were being handled by the hundreds of employees located there. Customer orders were shuttled each morning from the company headquarters, which remained in Warren, to the distribution center; and an average of 48,000 orders were shipped out every day. New Process warehoused around $25 million worth of merchandise in its new complex.

The expanded warehouse and shipping facility enabled the company to once again expand its product line. It did so in 1977 with the addition of a Home Furnishings division. New products included in the line included linens, draperies, furniture covers, area rugs, and bath accessories.

The New Process Company's enhanced capacity, in combination with the expanded product line, produced dramatic growth in sales and earnings throughout the 1970s. For the years 1970 to 1974, average sales were approximately $120 million, more than twice the average for the years 1965 to 1969. Net income increased from an average of $3.3 million to an average of $8.2 million. The growth rate remained similarly high during the second part of the decade, with sales climbing to the $200 million mark and earnings averaging $9.5 million.

1985--95: Shifting to Catalogs

By the beginning of 1985, New Process Company had more than 1,800 employees and offered 1,255 different items through its mail-order operation. The company had set new records with sales of $299 million and earnings of $18.7 million. All three of its merchandise groups--women's apparel, men's apparel, and home furnishings--were showing gains in revenue and profits. It was on this high note that company president and chairman John Blair retired, leaving New Process in the hands of Murray McComas. McComas had been with the company since 1962, when he started his employment in the advertising department. Along with the change in leadership came a change in identity; in 1989, the company officially changed its name from New Process Company to Blair Corporation.

1910:John L. Blair founds the New Process Company.

1920:New Process opens its first retail store.

1927:Company begins trading on the American Stock Exchange

1962:Founder John Blair dies; his son becomes president and chairman of the board.

1973:Merchandise handling operations are moved to a new distribution center in Irvine, Pennsylvania.

1989:The New Process Company changes its name to Blair Corporation

1993:Blair begins testing a catalog format for its direct-mail pieces.

In the early 1990s, Blair undertook an ambitious renovation of its headquarters. Relocating its distribution operation to the new facility in Irvine had vacated a great deal of usable space, resulting in the need for work area reconfiguration. In addition, the buildings--which Blair had occupied since 1921--needed modernization and upgrading. The renovation involved replacing most of the existing office equipment with modern workstations, making the entire building handicapped-accessible, and enlarging and remodeling the retail store section of the facility.

By 1993, Blair had built a mailing list of more than 15 million. Unlike most of its mail-order competitors, the company did not use catalogs. Instead, its letter-style mailings more closely resembled the type of flyer John Blair had originally sent out back in 1910. They generally included several individual sheets containing product information, along with a cover letter signed by the company's president. In 1993, however, Blair began testing a catalog format for its home furnishings line and other non-apparel items. Finding that the catalogs were well-received by its existing customer base, the company expanded its distribution to include potential customers. It also began creating pilot catalogs for its men's and women's apparel.

Blair released test mailings of men's apparel catalogs in July 1995 and a test batch of women's catalogs followed in January 1996. When the mailings produced promising results, the company began full mailings to both prospects and existing customers. By the end of 1996, Blair had mailed 60.3 million catalogs. That number increased to 100.7 million in 1997, and jumped to 128.2 million in 1998. As the company relied increasingly on catalogs as its marketing vehicle, its traditional letter-style mailings decreased. Between 1996 and 1998, the number of these mailings fell from 176 million to 88.5 million.

With the shift to catalog marketing came a slight shift in Blair's target demographic. The company had traditionally targeted low-to-moderate income customers who were aged 50 or older. The company believed, however, that the catalog approach enabled it to reach a younger population as well. Therefore, it redefined its customer profile as 'over 40, low-to-moderate income.' According to Blair's 1998 annual report, its newly defined market was the fastest growing segment of the population.

Looking Ahead

Since its inception in 1910, Blair had maintained an impressive track record of surefooted, quiet growth. As the 20th century drew to a close, it appeared probable that the company would continue making gains in the coming years. One of the most significant avenues of growth was likely to be its newly expanded target market. By redefining its target age range to include 40-to-50-year-olds, Blair had opened the door to a whole new--and growing--group of consumers.

To focus advertising efforts on this group, the company planned a year 2000 launch of a new apparel catalog geared to working women. Also planned were a dress and casual men's apparel catalog and a gifts and collectibles catalog. Additional catalog releases were likely in the future as Blair continued its shift to that form of marketing. The company also had plans to focus on its Internet presence, with an eye toward joining the ranks of direct-mail companies that also offered online shopping. Blair's increased use of catalogs--and the potential use of e-commerce--was expected to result in a decrease of its letter-style mailings.

The company was also gearing up for an impending change in leadership. Blair's president, Murry McComas, planned to retire in December 1999. He was to be replaced by John Zawacki, a Blair veteran of 28 years. Zawacki was the vice-president and general manager of the company's womenswear division and a member of the board of directors.

Principal Subsidiaries: Blair Holdings, Inc.

Principal Competitors: Fingerhut Companies, Inc.; Ames Department Stores, Inc.; Brylane Inc.; Burlington Coat Factory Warehouse Corporation; J.C. Penney Company, Inc.; Kmart Corporation; Ross Stores, Inc.; Sears Roebuck and Co.; The TJX Companies, Inc.; Target Stores, Inc.; Wal-Mart Stores, Inc.





Further Reading:


Anderson, Manley, 'Blair Corp. Sets Open House for Today,' Post-Journal (Harrisburg, Penn.), August 26, 1995, p.5.
'Blair Corp. Opens Retail Store,' Post-Journal (Harrisburg, Penn.), December 10, 1992.
Gannon, Joyce, 'Blair Enjoys Quiet Success in the Clothing Business,' Pittsburgh Post-Gazette, March 26, 1991, p.2.
75th Anniversary Book, Warren, Penn.: Blair Corporation, 1985.

Source: International Directory of Company Histories, Vol. 31. St. James Press, 2000.




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