Filed under: Small Business, Consumer Goods, Manufacturing, Entrepreneurs, This Built America
By Julia Halewicz
There's a persistent rhythm to the sewing machines at the Colonial Mills factory in Pawtucket, Rhode Island.
Needles puncture through cords of cotton and linen, binding yards of fabric into soft braided rugs and baskets so fast they're barely visible at a passing glance.
The women operating the machines act like snake charmers, coaxing tangled piles of baby pink, gray or floral blue fabric out of barrels and into recognizable rug forms with seemingly magical ease.
Only the hissing sound of forced air competes with the drum of the needles. The air comes through small holes drilled into sprawling green wooden tables, helping to levitate the rugs and ease the process of spinning them as they grow to 9- or 12-feet wide.
There's a loft-like feeling to the 68,000-square-foot factory, with windows that flood the wide-open floor plan with light, and cheerful white and green painted walls that give off an energetic freshness. Rooms for bobbin production, fabric storage and braid making are remarkably clean, with not one fabric cutting out of place.
On an average day, 80 employees will make about 700 rugs, and in a year fill 175,000 orders. Often it only takes two days from when you hit "submit" on your online order to having one of these rugs under your feet.
While the digital age may have added online-only retailers like Wayfair.com (W) to Colonial Mills' traditional customer base of stores such as Pottery Barn and Kohl's (KSS), the company hasn't much changed the way it makes its rugs since it opened in the 1950s. They all start as cotton from Georgia or wool from Canada or America that is dyed, braided into flat or cable lock patterns and then sewn on one of the company's 35 sewing machines.
A rug begins as a bolt of fabric or wool, which then gets turned into spools of thread or yarn. From there, the spools are braided into long cords in patterns like houndstooth, seersucker, florals or even solid colors then cut precisely to measure for specific rug orders. Next, they're sewn into their shapes and if necessary, finishers add a border or piping. Although machines are used at every step, the process has a handmade feel about it as each step is watched and manipulated by trained workers on the lookout for quality.
The company's long-standing American-made reputation has kept Don Scarlata -- who bought the company in 1977 and now runs it with his two children, Gregg Scarlata, 31 and Meredith Thayer, 34 -- from ever taking production overseas.
"I'm always asked why I don't move production overseas. There may have been times it might have been less expensive," Don says. But even when the economy crashed in the late 2000s, Colonial Mills remained committed to its "Made in the USA" mantra. "I wanted to maintain all the control over what was being made and how it was being made," he says. "Our reputation made me continue to focus on being a domestic manufacturer."
Don, 63, didn't know how to run a factory when he purchased Colonial Mills more than 30 years ago. And he didn't know how to make a rug. But he had a feeling he could figure out the mechanics of sewing machines.
With the self-assured swagger of a new father, a then-26-year-old Don walked away from a job in finance to get his hands dirty. Living in Massachusetts, Don had been on the lookout for a job that produced something he could touch, when he and his brother Paul Scarlata saw an ad in the Boston Globe. Colonial Mills was being sold for $3,000. They pooled their money and dove in. If there were fears of failure, his New England practicality steadied him: "I looked at it as a simple manufacturing operation," Don said. "If it didn't work out, I'd get another job."
A few miles down the road from Colonial Mills, Samuel Slater built the first cotton-spinning factory in 1793 by harnessing the power of the Blackstone River. Young men apprenticed for more than 10 years before getting paid for their work, mastering the machinery needed to run the factories. Women worked the cotton mill and seeded protests over fair pay. Slater Mill revolutionized American textile manufacturing and became a harbinger of the industrialized America to come.
In its 1977 form, Colonial Mills was far from the technological marvel Slater Mill was when it was built. There were just five employees working at a factory that was literally a mess. Exposed wires hung from the ceilings and lights dangled. Don got right to work, cleaning up the space and putting organizational processes into place. Each night, he returned to his family filthy and exhausted, but completely fulfilled.
Once the factory was up to Don's standards, his attention turned to the rugs. "The product was not being designed to coordinate with home fashions of the time," he says. While on the surface the company seemed like it was a manufacturer, Don envisioned it as a home fashion business. It seemed obvious enough to Don that Colonial Mills' color palette needed to change from drab browns and oranges to fit the ever-changing nature of interior design. They added five new designs in four color options -- including the now classic Federal Blue -- in the first few years. In 1989, Don's innovations had set the company on a course for success, so much so that he was able to buy his brother's share of Colonial Mills.
Chapter 2: Surviving the Present
By 2008, Colonial Mills was flourishing as a home interiors company with a strong American-made manufacturing foundation. But just as it was set to really take off, the economy crashed and retail business models began to change. The company that accounted for 40 percent of the Colonial Mills' business, JCPenney (JCP), slashed its orders.
Don considered walking away from the company, but with help from the state and the Small Business Administration, Colonial Mills remained open by using low-interest loans to float costs like making payroll and acquiring materials. Colonial Mills also cut its workforce in half, dropping from 120 employees to 60. "The recession was hardest because of the human factor," says Don's son Gregg.
Gregg never had any intention of joining his father's company, but during this rocky patch, he took on the challenge of reshaping Colonial Mills' entire sales strategy. Step one was increasing the channels for sales to make up for the huge loss of JCPenney business. Gregg hit the road to build Colonial Mills' partnerships; his friends started calling him a "traveling carpet salesman." Eventually, he landed an account with Restoration Hardware. But new clients revealed a new need in the industry.
Customization of products and speed of delivery became the new differentiators for manufacturing businesses. Colonial Mills began to diversify their client roster, pulling smaller orders, but from more clients. The company had found its new niche.
Before the Great Recession, 90 percent of orders were filled in five to seven days. To keep up with its new business model and cut production time, Colonial Mills implemented "lean" manufacturing practices, much like the ones automakers have used for decades. Since 2010, production dropped to four days and since August 2013, Colonial Mills fills orders in 2.2 days 93 percent of the time. Today, nearly 80 percent of its products are individual orders.
But more change was coming, courtesy of Don's daughter Meredith.
If Gregg was responsible for changing Colonial Mills' business model, Meredith can take credit for reviving and retooling the company's creative path. In her role as chief designer, she helped to land a huge new business win for Colonial Mills that set a course for her tenure. The potential client was Pottery Barn, and Meredith knew their pitch had to stand out. So she bought the company's classic kids pink gingham sheets and turned them into a basket to take into the pitch meeting. Pottery Barn was hooked. Baskets now account for 20 percent of Colonial Mills' business.
Just as her father revolutionized the company's color scheme early in his career, Meredith is reinvigorating Colonial Mills' product line. Her vision includes using pastel yarns to create contemporary children's rugs using traditional braided rug techniques. "Rather than focusing on [rugs] just being something to cover your floor, there is texture and design to them," Meredith says.
Gregg and Meredith's involvement in the company has brought a renewed passion to the business of braided rugs -- and a huge amount of pride to their father. "Right now I find it amazing how my kids have picked it up from where I brought it," Don says.
Chapter 3: A Strong Foundation
To define family at Colonial Mills you have to look beyond Don, Gregg and Meredith. Many at the factory have been with the company for more than a decade, and some 30 years.
"They're like family, they have seen my kids grow up," Don says about his employees.
Don drew on this connection to stay focused on keeping the company open when it seemed nearly impossible. Most employees work within five miles of the factory and keeping the company running meant helping the community immediately beyond its walls.
The City of Pawtucket is important to us and we're important to the City of Pawtucket.
Loyalty runs both ways in the company. Diva Pinenta has been a sewer with Colonial Mills for 31 years and, when prompted, happily tells the story of her hiring in a thick Portuguese accent. For starters, Pinenta didn't know how to sew, but Colonial Mills took her in and trained her anyway. Two years later, Pinenta developed breast cancer and spent three months home. Once she had beaten the disease, her job was still waiting for her. Pinenta remembers her first day back, walking over to her sewing machine. "I like the work here. I'm happy every day."
All of the sewers are trained over the course of six months to a year, a fact that garners loyalty and helped the company during its recession reinvention. Having expertly trained crafts people helped Colonial Mills to maintain the quality of the product while the company focused on retooling its business and manufacturing process.
It's a model not unlike the one started by Samuel Slater more than 200 years ago. Then, the view of the Blackstone River from Slater Mill would have been blocked by the small homes built to house factory workers. The community was centered around the Mill, which offered apprenticeships and eventual employment along with the promise of a better life.
"We value employees who have been here for so long," Gregg says. "They are some of the best, hardest working, loyal people I've ever met. They're what makes us who we are."
