Swank Inc.
Address:
6 Hazel Street
Attleboro, Massachusetts 02703
U.S.A.
Telephone: (508) 222-3400
Fax: (508) 226-9598
Statistics:
Public Company
Incorporated: 1897 as the Attleboro Manufacturing Co.
Employees: 1,500
Sales: $140.1 million (1995)
Stock Exchanges: NASDAQ
SICs: 3172 Personal Leather Goods, Not Elsewhere Classified; 3911 Jewelry & Precious Metal; 3961 Costume Jewelry; 3965 Fasteners, Buttons, Needles, & Pins; 2844 Toilet Preparations; 5136 Men's and Boy's Clothing; 5137 Women's and Children's Clothing
Company Perspectives:
The Company is dedicated to maintaining style and quality leadership in the broad diversity of products it markets.
Company History:
Swank, Inc. is one of the United States' leading manufacturers of men's and women's jewelry and leather goods. Swank's customers are mainly major retailers such as department stores, specialty stores, and mass merchandisers, through which the company's products are marketed under the brand names Pierre Cardin, Colours by Alexander Julian, Anne Klein, Anne Klein II, Guess?, and Swank. Most of the company's retail items are offered at various price points and in numerous styles, so as to appeal to a broad range of consumers. Swank's products are also sold internationally throughout over 50 countries, and through numerous factory outlet stores in the United States that distribute its excess and out-of-line merchandise.
The Early Years
The beginnings of Swank, Inc. can be traced to the year 1897, when Samuel M. Stone and Maurice J. Baer founded the Attleboro Manufacturing Company to produce and sell jewelry for women. The two men took over a building in Attleboro, Massachusetts, that had been constructed decades earlier as a forge to turn precious metals into jewelry. Unfortunately, less than a year after Stone and Baer began production, one of the largest fires in the town's history claimed an entire block of buildings, destroying their small enterprise. Many of the company's employees helped fight the fire and were able to salvage a portion of the machinery and finished jewelry. Therefore, the Attleboro Manufacturing Company was able to resume its operations with the remaining equipment and material in another building nearby, which came to be the center of production for the next century.
Within ten years, the Attleboro Manufacturing Company was enjoying a good deal of success in producing women's jewelry and decided to begin expanding into new markets. In 1908, Baer formed a new division, called Baer and Wilde, to oversee the production of men's jewelry, while Stone remained in charge of Attleboro Manufacturing. The new Baer and Wilde division operated with marginal success alongside the Attleboro Manufacturing Company until 1918, when the Kum-A-Part cuff button was designed and became an immediate success. The item became one of the company's first major products, and its sudden popularity facilitated significant growth for the company.
By the time the United States became involved in World War I, the Attleboro Manufacturing Company was large enough to handle the production of thousands of metal identification tags, better known as "dog tags," for the military. While this was the company's most notable contribution to the war effort, it also profited from the production of numerous other emblems for the U.S. government during those years. It was then that the demand for production of men's jewelry surpassed that of women's, and the women's line was terminated. The company was then able to focus its resources completely on the manufacture of men's collar buttons, pins, and holders, as well as tie clips, dress sets, and other men's jewelry items.
Post-World War I: Swank, Inc. Is Born
After production of the women's jewelry line was halted, the company focused solely on the manufacture and marketing of its men's items. Although its men's products were already in high demand, the company pushed even harder to gain more market share through the implementation of a new marketing plan and increased advertising. The new marketing plan was originated by Stone in the late 1920s and dictated that the Attleboro Manufacturing Company employ seven wholesale dealers in different major cities throughout the United States to handle the sale and distribution of the men's jewelry line. This action helped the company more easily distribute its products nationwide and also increased its advertising range.
The name Swank actually appeared in 1927 on a print advertisement for a men's collar holder, but it was almost another decade before it became the corporate name. By 1936, Stone's marketing plan was so successful that the company invited the seven dealers to form a new corporation, Swank Products, Inc. The merger not only gave the company a new name, but also gave it a national sales organization of its own, which already had direct contact with thousands of jewelry retailers across the country. These connections were an unusual and important asset for a newly formed corporation and aided in the ease and speed in which Swank shifted to operation on a national level.
In 1941, the company changed its name once again and became Swank, Inc., a designation which stuck for the next 50 years and beyond. Shortly after the name change, the United States' involvement in World War II caused Swank to temporarily stall the production of its regular retail items while it instead manufactured tools for the military. Also produced during the war were precision parts for automatic weapons, and the bronze stars and purple hearts that were awarded to U.S. servicemen for heroism in action. These contributions enabled Swank to maintain steady work during the years of the war, which left the company in solid financial condition at its conclusion.
Expansion into the 1950s and Beyond
During the years following World War II, Swank's product line was diversified by the addition of personal leather goods, gifts, and fragrances. The company first began producing items such as wallets, belts, and other accessories for men, a move which considerably increased Swank's annual sales. It also started producing and marketing fragrances under the Royal Copenhagen name.
In 1966, Swank strengthened its blossoming leather products division with the acquisition of the Prince Gardner Company of St. Louis, Missouri, a manufacturer of men's and women's leather goods marketed under the Prince and Princess Gardner brand names. In 1970, Swank purchased another leather goods manufacturer, Crestline Manufacturing Company of South Norwalk, Connecticut. Crestline continued to produce wallets, belts, and accessories under the Swank, Pierre Cardin, and L'Aiglon labels, and soon achieved a strong reputation for the high quality of its products. The following year, Swank rounded out its leather division with the addition of the Alco Leather Manufacturing Corporation of San Francisco, California.
The sudden increase in production demands due to Swank's new additions prompted the company to invest a large amount of capital into expanding and renovating its facilities in the 1970s. First came a move into a new distribution center in Taunton, Massachusetts, after Swank outgrew its original warehouse nearby. Soon after, the Crestline division operations were moved into a modern manufacturing facility, which was designed specifically to handle the immense production demands that came with being the largest belt manufacturer in the country. Finally, another new plant was constructed in 1978 to accommodate the Prince Gardner division's rapid growth.
After ensuring its ability to handle increased production, Swank entered the 1980s with intentions of broadening its product lines and initiating further growth within the company. It was at that time that Swank reintroduced its women's jewelry line, which had been the company's initial product 80 years earlier. Much of the new women's product was marketed under the Anne Klein brand name, as a means of gaining immediate consumer recognition and approval. Also reintroduced in the early 1980s, after an absence of nearly a decade, was a sales incentive program for Swank's salespeople. The incentive program encouraged employees to sell from all of Swank's major product areas, rather than only from those that were easiest to sell. Available products at that point in time were jewelry, leather accessories, belts, fragrances, and gifts such as pen sets and clothing.
In 1985, Swank further expanded its men's leather accessories line with the addition of new items carrying labels by Reed St. James and Colours by Alexander Julian. A new line of women's jewelry under the brand name 90 Park was also introduced. Sales of these items, coupled with the rising success of earlier products and the sales incentive program, helped Swank reverse two years of annual declines and achieve $157.8 million in sales in 1987. This success was also attributed to a decrease in overhead spending throughout the year, and the fact that the women's jewelry division was steadily gaining popularity and generating more sales. Shortly thereafter, Swank began experiencing declines, which continued for almost five years. Thus, in 1989 the company sold the assets of its Prince Gardner division.
The 1990s and Beyond
By 1991, annual sales had dropped by more than $30 million since the record high in 1987. The company managed to achieve increases in sales for the next two years, although 1992 marked the sale of the company's Royal Copenhagen fragrance line, as Swank struggled to lower its expenses and turn the past few years around. After paying much attention to consumer buying trends in the early 1990s, Swank decided to take advantage of the growing corporate trend toward casual dress. While still maintaining its traditional product lines, in 1994 Swank sought a license to produce and market casual products under the Guess? brand name, such as men's and women's costume jewelry and leather goods. Swank also began offering many of its products at various price points and in numerous styles, so as to appeal to a broad range of consumers.
These measures were successful and aided Swank in overcoming the years of declines in an extremely competitive retail environment. The company posted $143.4 million in 1994 sales, while at the same time managing to pay off over half of the largest debt in company history. The remaining debt was scheduled for repayment in 1995, signaling Swank's belief that another strong year lay ahead.
Meanwhile, Swank's new lines of Guess? products were generating increased sales in the leather accessories and jewelry divisions. Unfortunately, those two areas alone accounted for 96 percent of Swank's 1995 sales, leaving the company reliant upon a narrow base of products. Furthermore, a weakening in consumer interest in high-priced fashion jewelry initiated a shift in production toward more competitively priced career-oriented items, which eroded the year's profit potential. 1995 sales dropped by $3 million from those the previous year, prompting Swank chairperson Marshall Tulin to hand down the positions of president and chief operating officer to his son, John, after stating his belief in the 1995 chairman's message that "it was time to let younger minds handle daily operations."
Entering the end of the century, executives at Swank committed themselves to continued efforts at rejuvenating the company. A goal was set to increase margins on the goods sold, and the company began cutting costs and making efforts to manage its assets in a manner that would maximize stockholder returns as methods to achieve that goal. In his first stockholder address as president and CEO, John Tulin stated his belief that while much work remained, the improvement seen in 1996 signaled that the company's efforts were in the correct direction.
Further Reading:
"Swank Back in the Black in 4th Quarter and Year," WWD, March 9, 1992, p. 17.
"Swank: Eighty-Eight Years of Progress," Attleboro, Mass.: Swank, Inc., 1985.
"Swank's Sales Grow on Trees," Sales & Marketing Management, May 19, 1980, p. 16.
Thompson, Michael, "Jewelry's Public Companies: Slim Profits, Aggressive Plans," Jeweler's Circular-Keystone, July 1988, p. 126.
Source: International Directory of Company Histories, Vol. 17. St. James Press, 1997.
