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Unitog Co.

 


Address:
1300 Washington Street
Kansas City, Missouri 64105
U.S.A.

Telephone: (816) 474-7000
Fax: (816) 474-0699


Statistics:
Public Company
Incorporated: 1932
Employees: 4,400
Sales: $261.71 million (1997)
Stock Exchanges: NASDAQ
SICs: 2326 Men's/Boy's Work Clothing; 7213 Linen Supply; 7218 Industrial Launderers


Company Perspectives:


"We will continue to grow, through acquisitions and increasing sales at current locations. But we will focus on the things that have made Unitog successful for 65 years. At the very top of that list is providing exceptional customer service."


Company History:

Unitog Co. is a leading company in the uniform rental and laundering market, and a large manufacturer of uniforms, garments, and embroidered items. Through an aggressive acquisition campaign in the mid-1990s of nearly two dozen companies--mostly in the uniform rental and laundering service--the company has expanded its rental system locations to nearly 60, to go along with its seven manufacturing plants. It is especially dominant in providing uniforms for bottled beverage companies, the oil industry, and the U.S. Post Office.

Company Origins

Unitog was founded in November 1932 by Arthur Dutton Brookfield, known as A.D. The Great Depression was at its height, and like many companies of that time, its origins were very modest. Brookfield started the company in a small two-room office with a cardboard file cabinet and $3,500 in borrowed money. Brookfield's wife died six months prior following a lengthy illness, leaving him with three small children to feed. He had plenty of motivation to succeed.

The nucleus of Brookfield's idea for Unitog was this: Businesses needed to convey a professional image that would establish a company's identity and quality through well-groomed employees. Unitog would provide one-piece neatly tailored uniforms that would boost employee moral and increase visibility for the company.

Unitog's roots actually dated back to 1929. Brookfield was the vice-president for Cowden Manufacturing Co., a large industrial clothing firm with plants in several states. That year, Brookfield started a separate mail order division, called the Unitog Manufacturing Co., which specialized in one-piece "coveralls." The name Unitog was birthed from Brookfield's background as a former teacher of Latin. Unitog is a derivative of the Latin word "Unus," meaning one, and the Greek word "Toga," a Roman garment.

In 1932, Brookfield landed a huge account for Unitog, the Continental Oil Co. (Conoco). After signing the account, Cowden and Brookfield came to an amicable agreement in which Brookfield would get the Conoco account, purchase the Unitog name for $1, and go into business for himself. Conoco was a cornerstone for the fledgling Unitog during its first decade, and remained a key customer into the 1990s.

Struggling in the 1930s

In the early days, Brookfield could carry the company's inventory in the trunk of his car. He contracted out all of the cutting and sewing to various garment factories in Kansas City. Brookfield's offerings were remarkably small, consisting of just three items: a one-piece coverall, a grease coat for service station attendants, and a cap.

Brookfield continued the mail order method he had pioneered while at Cowden. He instituted a pre-pay policy for all orders, which kept cash flow steady during the lean years. At the time, Brookfield had four employees. One was Don Lockwood, a sweeper and shipping clerk. In the 50th anniversary booklet Unitog published in 1982, Lockwood described the early years: "When we had a $500 day, that was a red-letter occasion. And when we had a $1,000 week, we really hit it big."

During the late 1930s, Unitog's sales reached $500,000 annually, and it had branched out to produce other types of uniforms besides coveralls. During 1938 and 1939, the company scored some large accounts in the automobile dealer field, producing shop coats, white shirts, and work pants for employees in the service departments.

Unitog Becomes a Manufacturer

During Unitog's first decade, it was strictly a sales company, contracting out all manufacturing. However, that changed in 1941. At that time, Brookfield began shopping around for new manufacturers, and he met with Harry Garrison, president of Vitt, Mayes, Garrison Manufacturing Co. in Warrensburg, Missouri. Garrison had a good reputation for manufacturing quality clothing, and quality was a hallmark of Unitog. After the meeting, Garrison proposed a partnership between the two firms, so the Brookfield-Garrison Manufacturing Co. was incorporated that year, an equal partnership. Garrison was in charge of manufacturing, and Brookfield in charge of sales. In later years, Brookfield would take over the entire operation. In the mid-1990s, Unitog's largest uniform manufacturing plant was still located in Warrensburg.

The formation of the Brookfield-Garrison Manufacturing Co. could not have come at a better time. The U.S. entered World War II, and the demand for Army fatigues was tremendous. Brookfield served as head of the textile procurement section of the Mid Central War Resource Board, which proved a tremendous power base. He was also chairman of the Kansas City Union Manufacturers Association and went to Washington D.C. in July 1940 to seek contracts for his group. He came back with a $200,000 award for both his company and competitors H.D. Lee, Burlington, and J.A. Lamy. But Brookfield-Garrison Manufacturing Co. most certainly got its share of the business--20,000 coveralls out of the 62,000 contracted for. It was the first such large award to the textile industry west of Philadelphia.

In all, Brookfield-Garrison manufactured 150,000 fatigue suits and jackets for the defense program during the war. This growth prompted the company to open a second manufacturing facility in Concordia, Missouri. But despite the rush of business from the military, Unitog kept its eye on the civilian market. When the war ended, Unitog still had a solid base from the private sector. This foresight was key to its survival, as evidenced from a letter A.D. wrote to his son Dutton in 1945: "The day before the Japanese surrender, Hercules, the Army and everybody else were pushing us all just as hard as they could for increased production; but the day after, they all wanted to cancel."

Postwar Era

With the war over, Unitog focused on two related industries: automobiles and oil. By 1947, Conoco was still the breadwinner at Unitog, logging $237,600 in orders. However, car dealership business was quickly catching up, with Ford putting in orders worth $114,000, and Chevrolet $93,200. That year was also the first time Unitog surpassed the $1 million sales mark. It was during this time that Unitog landed another major coup; his name was Joe Curtis. Curtis retired from Conoco at the age of 66, and was extremely well known throughout the oil industry. Brookfield and Curtis had been close friends since their college days at the University of Michigan and naturally kept in touch through their business relationship. When Brookfield learned that Curtis was retiring, he immediately offered him a sales position. Curtis initially declined but then quickly became bored with retirement, and when A.D. contacted him 60 days later, he immediately took the offer and reported to work the next day.

At the age of 66, Curtis would start a sales career at Unitog that would last 20 years. He became known as Uncle Joe, and propelled Unitog to record sales. Don Lockwood, the former shipping clerk, by this time was a sales representative, and recalled that Curtis had so many connections, sales orders almost fell in his lap. "His name was like an 'open sesame' to formerly closed doors," Lockwood said.

1952 was a year of major change for Unitog, as A.D.'s son, Dutton, became president of the company. Dutton joined the company in 1939 after his graduation from the University of Missouri. Dutton served during World War II and returned to the company as a road salesman at a pay of $15 per week. He was promoted to sales manager by 1947 and quickly began rising through the ranks. By 1949, he was vice-president. A.D. decided it was time to turn the reins over to his son, so in 1952, A.D. became chairman, and Dutton was appointed president of Unitog and Brookfield Manufacturing. (Garrison retired in 1947, and the company became Brookfield Manufacturing.)

Insiders described A.D. and Dutton's style as night and day. A.D. founded the company during the Great Depression, when penny pinching was a way of life. He carried that throughout the company's prosperity. Dutton, on the other hand, believed in spending a dollar to make a dollar. He didn't mind borrowing money if it meant big payoffs down the road.

Post Office Provides Milestone in 1955

1955 was a year of mixed emotions for the Brookfield family. A.D. died on March 31 from a coronary occlusion while returning from Florida on a passenger train. Fortunately for the company, Dutton was firmly in charge of the company by that time. But 1955 also marked another milestone in Unitog's history: the Post Office announced it would establish a uniform allowance for many of its employees. Postal employees would receive $100 annually, and when multiplied times the 130,000 workers who were eligible, Brookfield immediately saw this as a golden opportunity. However, sales would not be a simple as calling on one person in a corporate office who would order hundreds of uniforms. Each uniform had to be sold directly to each Post Office employee, which required a completely different marketing method. In addition, the Post Office placed very strict requirements on the uniforms, stipulating they must be purchased from a licensed vendor.

To meet these new demands, Dutton Brookfield formed a new corporation in 1956, called Brookfield Uniforms. Dutton also borrowed a page from his father's game plan. Just as A.D. used Joe Curtis to help establish Unitog's presence in the oil industry, Dutton hired retired postal workers as sales representatives for the new Brookfield Uniform. These people immediately had connections to many former co-workers, and were also intimately familiar with the workings of the Post Office. Within four years, Brookfield Uniform had a 40-person sales force, and posted $1 million in sales. In 1961, Brookfield Uniforms and Brookfield Manufacturing were officially merged into Unitog.

1960s Ushers in Rental Services

As the company looks back on its history, no bigger decision was made than in 1960, when the company entered the rental and laundry business. That year the company formed Unitog Rental Services, Inc., and purchased its first industrial rental company, the Oak Park Laundry and Dry Cleaners in Kansas City, Missouri. Although the unit lost money its first three years, Dutton Brookfield was committed to seeing it become profitable. But even Dutton, at the time of the purchase, could not envision that someday the rental section would generate nearly 80 percent of the company's revenues.

In 1963, the company took out its first $1,000,000 loan in order to finance the acquisitions and expenses of the new rental unit. That year the company also developed the patented Transeal, which was a method of transferring company logos to uniforms, rather than sewing them on. In 1964, sales reached $6.5 million, with manufacturing plants in Warrensburg and Clinton, and sales and warehousing in Kansas City, Houston, Los Angeles, Minneapolis, Philadelphia, Portland, Oregon, and Columbus, Ohio.

The 1960s continued as a time of great growth for the firm. Larry Peoples, director of merchandising, recalled that Unitog had expanded its market presence to include soft drink bottlers, brewers, dairy products, and bakeries. "Business was kind of easy then," he was quoted as saying in the company's 50th Anniversary booklet. "We weren't pressured to ask those key questions because sales were increasing 15 percent a year whether we liked it or not," he added.

From 1964 through the early 1970s, additional manufacturing plants opened in Fort Smith, Arkansas, as well as in the Missouri cities of St. Louis, Warsaw, and Plattsburg. Moreover, the rental facilities expanded to Atlanta, San Diego, Santa Monica, Chicago, Toronto, Vancouver, and Montreal.

The 1970s

The 1970s was a time of maturing for the company, as well as taking some venture risks--which didn't all work out. One major change occurred in 1971, when the company went public. The company offered 250,000 shares and raised $2.9 million from the offering. It was during this time that Unitog attempted to establish a large presence in Canada. Unitog Canada Ltd. was formed in 1972, and the company invested $320,000 for a new facility in Vancouver which would house a rental laundry, dry cleaning plant, and a distribution center.

From the beginning, Unitog's entrance in the Canadian market was plagued with problems. Only half of a government financial grant came through, labor problems with unions surfaced, and a strike by Canadian postal workers and airline workers made it extremely difficult to fulfill orders. Salesmen were struggling to deliver orders themselves, but were unable to keep up with the demand. Management changes were instituted in an attempt to save the Canadian unit, but it was to no avail. The Canadian operations were eventually sold in 1977 to John Klymak and Randolph Rolf, the latter at the time a vice-president for Unitog. Rolf rejoined Unitog in 1985, and became president in 1987, then chairman of the board in 1991.

The early 1970s was also a time of maturing for the rental services unit. Although more than a decade old, it was still considered a "step child" compared to the manufacturing unit, and some conflict between the two divisions existed. By 1974, there were eight rental locations, but sales had hit an apex, and there was even discussion within the board that the rental division should be sold, since it was a drain on the company's focus.

However, 1974 was also a year of major change for the manufacturing side, as the oil embargo of the early 1970s was changing the way oil companies did business. Many service stations closed, or were converted to self-service, eliminating the need for uniforms. Sales hit a slump. It was during this time that the company's diversity into the rental business really began to pay off. Ernie Rylander and Jack Leisure were two men credited with building the rental unit into a major contributor to the company's pocketbook. By the mid-1970s, they were shaping the rental division into a major profit center.

The company decided on a course of growth through acquisition, although the price tags began to escalate. In 1978, Unitog bought Clean Rental Services, with operations in Birmingham, Alabama, and Nashville, Tennessee, for $2 million. In 1981, the company made its biggest acquisition, the Nuway Linen and Industrial Rental, in Long Beach, California, for $5 million. By the end of the decade, overall sales reached $50 million.

The decade ended in tragedy. Dutton Brookfield suffered severe injuries in a fire at his vacation home in May 1979 and died two months later at the age of 61. His son, Arthur Dutton Brookfield II, took over as president, the third generation Brookfield. He had started with the company in 1969 as a sales representative in Milwaukee, and had worked his way up the ladder, first as vice-president, then senior vice-president of operations. Like his father, he had been groomed for the position.

Brookfield Era Ends

The 1980s would see the end of the Brookfield family involvement in the business. In 1984, the firm went private, as company managers, including Arthur D. Brookfield II, bought Unitog for $36 million. However, within four years, Brookfield stepped down as vice-chairman, and soon was no longer involved in the operations of the company. As a private company, it continued its acquisition of rental units, and surpassed the $100 million in sales for the first time in its history in 1988. In May 1989, the company went public once again, ending its five-year stint as a private company.

Revenues Double in the 1990s

The 1990s was a time of expansion and contraction for Unitog. It opened its first overseas manufacturing plant in Honduras. Distribution centers were cut from 11 to only four. The Clinton, Missouri, plant was shut down. At a management meeting in 1991, 35 top managers huddled for a brainstorming session, and out of that meeting, two managers suggested their own positions were probably not necessary, and they left the company. But while the manufacturing side was downsizing, the rental side of the business was soaring. Unitog acquired three rental business in 1990, and the price tag for one company alone in 1992 was $30 million. Fiscal 1994 sales rose to $177 million.

During a five-year period in the mid-1990s, the company went on a rampage of acquisitions, completing 23 purchases which had an aggregate $99 million in annual revenues. That boosted fiscal 1997 revenues to $261.71 million, with net earnings of $12.12 million. The company had its strongest presence in the Midwest, portions of the South, and the auto corridor of Michigan, Illinois, Ohio, and Indiana. There were also many rental locations on the West Coast. The rental unit captured 78 percent of Unitog's revenues in fiscal 1997 and had become the dominate sector of the company.

Unitog competed with more than 1,000 other rental companies in the United States, but it was clearly in the top five firms going into the next century. In the mid-1990s CEO Randolph Rolf announced a campaign of additional acquisitions, and those plans, managed wisely, were expected to propel the company to continued strength as a major player in the uniform rental and manufacturing industry.





Further Reading:


Bradley, Lenora K., Unitog: A History of Corporate Growth, 50th anniversary booklet, Kansas City: Unitog Co., April, 1982, p. 1-26.
Davis, Mark, "Unitog Investors Enjoy Turnaround," Kansas City Star, April 23, 1996, p. 27D.
DeAngelo, Dory, "Unitog Dresses America's Workers," All American Buyer's Guide, All American Publishers, Fall 1993, p. 26-28.
Heaster, William R., "Unitog Grows in Face of Changes," Kansas City Times, June 14, 1988, p. 7D.
Lee, Don, "Unitog's Reduction of Management Follows a Trend," Kansas City Star, September 24, 1991, p. 35E.
------, "Unitog to Sell Stock to Public," Kansas City Times, April 8, 1989, p. 1C.
Morgan, Ray, "Unitog to Celebrate Its 50th Birthday," Kansas City Times, April 29, 1982, p. 5C.
"Unitog, A Brief History," Unitog Co., April 1997, p. 1
"Unitog Completes Buyout," Kansas City Star, May 7, 1984, p. 5A.

Source: International Directory of Company Histories, Vol. 19. St. James Press, 1998.




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