W. J. Dickey and Sons Inc. in 1957
Introduction (Written by El Penski in June 2009, update 2012)
I wrote the following term paper for a senior Marketing course, taught by John L. Severance who was Secretary of the New York Cotton Exchange. He commuted every Saturday from New York to Philadelphia Textile Institute (Now Philadelphia University).
The 1957 term paper was based on my interview and tour of the Oella Mill conducted by Mr. William A. Dickey Jr. He was very kind, polite, patient, and frank. I was surprised that there was no company literature: annual reports, advertisements, or press releases. Of those companies that I visited, the Oella Mill was among the most frugal. His office was very suprisingly modest and small. Mr. Dickey talked about growing competition but said nothing about his vision or doubts for the future of the mill. I went away with a positive view of the company, but I did not see any signs of preparation for growth and emerging technologies.
I talked to some of employees during the tour. They seemed highly motivated and proud of their work. Mr. Dickey pointed out that his workforce was very loyal. Many of their forefathers had been there for many generations, and many of the employees had been there for several decades. That applied to Mr. Dickey as his great grandfather, William J. Dickey founded the company in 1838 in Baltimore. In 1871, his son, William J. Dickey, bought Ashland Mills from the Wethereds for $82,000. Ashlands Mills contained 300 acres, three mills and many of the houses in the village. The mills were on the Gwynns Falls, and the village and the mill took the name of Dickeyville. The company bought the Oella site from the Union Manufacturing Company in 1887. Union was founded in 1808 and was briefly the largest cotton mill in America, it was destroyed by fires and floods.
I had visited many mills during my years at Philadelphia Textile Institute. Since I was a “chemistry and dyeing” major, I was interested in laboratories and dyeing test equipment. I was disappointed at Oella. At that time, in some companies, when the dyer checked his dye baths, he just stuck his finger in the bath and put it in his mouth to check the acidity or basicity level instead of using modern test equipment. They said it was much faster and more accurate, but they usually dissolved their front teeth with that method. I did not meet any dyers during my tour at Oella.
I stated in my 1957 term paper that “I think that the long term prospects for the company are good.” I was wrong unless you define 15 years as long term. The Mill closed in 1972 about the time of a terrible flood on the Patapsco River knocked out its power plant. One of their competitors, J.P. Stevens & Co., which was founded with one small wool flannel mill in North Andover, Massachusetts in 1813, was acquired by West Point-Pepperell Inc. for $1.2 billion in cash in 1988. In 2012, J.P. Stevens & Co., Inc. was headquartered in New York City as part of WestPoint Home. Another one of their competitors, Woolrich Woolen Mills, claimed to be “America’s oldest woolen mill,” was still in operation in 2009. It was founded in 1830 by John Rich. While I cannot say why Woolrich persists, I know it is located in one of the poorest areas of Pennsylvania, and it does a very good job of promoting its brand name while W. J. Dickey and Sons Inc. maintained a low profile. J.P. Stevens & Company brand name in textiles seems to be forgotten in 2012.
W. J. Dickey and Sons Inc.
(Written in 1957)
W. J. Dickey and Sons is a woolen mill located in Oella, Maryland along the Patapsco River. It was established in 1838. It has about 500 employees and a sales volume of $12,000,000 per year. It spins its own yarn, weaves, dyes and finishes. It has 17 sets of cards, 3,852 ring spindles, 104 broadlooms, and 3 pickers. Also, it has a subsidiary plant in Dickeyville, Maryland (within Baltimore City) which employs 50 people and spins yarn to supplement the spinning done at the Oella plant.
Mr. William A. Dickey Jr. is the president and wool buyer. It was from an interview and plant trip with Mr. Dickey that I obtained most of the material included in this report.
The woolen material that Dickey and Son manufacture goes exclusively into suiting, overcoating, and sportcoating of high quality. No one seems to know what percentages of the total production go into each, but I would guess that 60% goes into sportcoating, 30% into suiting and 10% into overcoating.
The raw materials used are scoured wool, noils, Orlon, Dacron, and silk. The wool is bought from wool dealers in either the scoured or unscoured form. When the wool is bought in the unscoured form, W.J. Dickey and Sons has the wool scoured by such companies as the Delaware Valley Wool Scouring Company or the Philadelphia Wool Scouring and Carbonizing Company. All of the wool that is bought for manufacturing purposes is bought on inspection. Most of the wool is bought as the seasons orders are placed. The domestic wool usually comes from either Texas or New England and the foreign wool usually comes from either New Zealand or South Africa. This wool is bought from dealers through a selling agent. Although the dealer gets 1%, it is often cheaper to buy from the dealer than to buy directly from the foreign or domestic source. This is due to the fact that the dealer buys when wool is the cheapest and then stores it.
Since wool is shorn in the spring and since most wool is pulled in December there are annual price fluctuations which also affect buying time. In order to permit buying to take place where wool is the cheapest, a large amount of wool is stored in the mill.
Since wools price is relatively changeable a certain amount of hedging is done. When the Suez Crisis began the price of foreign wools immediately became very high. To protect the company’s season's contracts, Mr. Dickey immediately bought large amounts of Texas wool which had not been shorn at the time. Although the company could not use this wool, owning it protected it from the risk of having to fill contracts with higher price wool than anticipated at the time the contract was made. This turned out to be a very profitable move. Dealing in this unshorn market is usually pure speculation. Even though the company carries on some hedging, it does not make use of the New York Wool Exchange. Mr. Dickey does not consider the exchange a good gauge of the market nor does he consider it reliable.
As stated previously, the product is used in suiting, overcoating, and sportcoating. These products serve both a basic and fashion need. Since fashion is a factor, styles are changed twice a year. Since the material is of a high grade, the buyers, the ultimate consumer, are usually in a high income bracket. The final product is used almost exclusively by male adults. Of course woolen garments sales vary with the weather conditions of each season. The colder the winter the more woolens are sold or we can say in general that the more winter clothing is sold. Since W.J. Dickey and Sons produce a quality fabric which goes into high price garments, this weather problem seems to have no effect on W.J. Dickey and Sons. This is due to the fact that high price garments are bought by the higher income groups who do not wait until cold weather comes to buy winter clothing but buy before the seasons starts.
W.J. Dickey and Son operate through a selling agent which is situated in New York. This agent is H.R. Leeds Woolen Sales Corporation. This selling agent dictates style changes and types of material produced to Dickey & Son. Since H.R. Leeds Woolen Sales Corporation does a satisfactory job, W.J. Dickey and Son has no sales force.
W.J. Dickey and Sons makes no sales promotion efforts. Mr. W. A. Dickey Jr. said simply but effectively, "Our product is our best advertisement."
The company uses its own contract which is of a relatively firm nature. Occasionally, someone tries to wriggle out of a contract, but in most cases, the people that they do business with are reliable and the simplest type of contract would suffice.
Apparently, competition is not a problem to W.J. Dickey and Sons because of the fact that they are a reliable mill which produces a quality product. Their competitors include large mills such as J.P. Stevens and smaller mills such as Frankford Woolen Mills and Woolrich Woolen Mills. W. J. Dickey and Son has no location or cheap labor advantage, but it does have the advantages of having modern machinery, a high level of workers, low worker turnover, a quality product, and experienced, aggressive, and intelligent leadership.
I think that the long term prospects for the company are good. First of all, I do not think that style changes cut down the use of woolens to any extent. It does not seem likely that worsteds or other fibers can give woolens and its blends much competition in sport coating. As most woolen plants, W.J. Dickey and Sons is highly integrated, carrying on all operations from carding to dying and finishing. While the company is planning no product diversification, it is very responsive to style changes.
At the end of my interview with Mr. Dickey, I asked him what his major marketing difficulties were. He answered that his major problem was the securing of wool which was white enough. In other words, W. J. Dickey and Sons is having no marketing problems. The marketing channels, which at first seemed rather complicated to me, perform their function well and are thus maintained.
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