Volume 15 | Issue 3 | Year 2012

Most textiles have a tag on them that tells you the product was made somewhere other than where you bought it, most likely Asia. In fact, the textile industry was one of the first trades to contract manufacturing offshore to emerging countries with low labor costs and huge labor pools. The problem with such conventional wisdom is that it is, well, so conventional.
Cambridge Towel makes it a point not to follow the herd. As the largest North American maker of woven and printed terry towels, and one of the few remaining to rely primarily on domestic manufacturing, the 35 year old, privately held Canadian company stands out not only for its “we do it all here, from soup to nuts” approach, but its success in doing so.

Indeed, the global and domestic economy notwithstanding, Cambridge Towel president and COO Hugh Thompson reports, “We had a good last six months in 2011, and the first half of 2012 has been equally positive.” Cambridge Towel sells to retail, hospitality, specialty and ecommerce markets both in Canada and the United States, as well as internationally primarily to Mexico, South America, the Caribbean and the Middle East.

One reason for this performance is that every aspect of design, marketing and shipping as well as most manufacturing is performed under the one roof of its one million square foot facility in Cambridge, Ontario, where it employs 300 people.

“Our commitment to domestic made quality is singularly unusual in our industry,” Thompson explains, “but works on a number of levels. For one thing, contrary to prevailing thinking that outsourcing overseas reduces costs, it actually helps us hold down production costs to manufacture here in Canada. We buy all our cotton from the U.S., which is only about an hour’s drive away from us. So we save on not having to pay the costs of shipping from across an ocean. Additionally, thanks to NAFTA (North American Free Trade Agreement), we also are less expensive because most Canada – U.S. trade is duty free.”

Also, Thompson points out, “Equally important is that many of our customers are working with just-in-time inventories. It’s much more difficult to do JIT if you’re outsourcing overseas. A domestic manufacturer like us, on the other hand, saves customers money because we can more easily accommodate the demands of their JIT systems. We don’t have to buy 100,000 pieces because we’re projecting 10 orders of 10,000 at some point over the next 12 months; we can make it as we need to, which lowers our carrying costs and, consequently, lowers the cost of what we charge our customers.”

He adds, “Buying a product from Cambridge Towel means less margin goes toward fuel, ocean container ships, packaging, middlemen and customs fees; allowing for more money to be invested in high quality production materials, innovation and growth.”

Proximity to both your supply sources and your customers is not only good for business, but good for the environment. “Shipping overseas burns fuel and emit pollutants,” Thompson says. “Because most of our product is made here and shipped domestically, we have one of the lowest carbon footprints in the industry.”

In addition, Cambridge Towel has instituted a number of ecoconscious policies and manufacturing procedures, which include saving energy with shorter dryer times and using more environmentally friendly dyes. “We always look to partner with other environmentally responsible companies,” Thompson points out. “Moreover, we make products that last, which reduces the amount of stuff that winds up in the waste stream because it doesn’t last. When you add all this up, it makes Cambridge Towel the greenest supplier on the market.”

Thompson also emphasizes the importance of community. “Our decision to keep manufacturing here in Canada wasn’t just about economics or the environment, as important as they are,” Thompson said. “It’s also about creating good jobs at fair wages and good benefits that support families and communities. We consider our employees our family. We know the faces of our workers and together we know the value of producing the best quality products.”

He adds, “It is important for us to do business the right way. We are as firmly committed to ensuring our products and processes allow our community to live better as we are committed to providing our customers quality products at competitive prices.”

As it happens being good for the purpose of being good also makes good business sense. “Many of our customers are looking for suppliers with sustainable practices, a commitment to their communities and a guiding business ethic of responsibility,” Thompson points out. “One value add is our values.”

VERTICAL INTEGRATION
Thompson describes the vertical integration of products and people this way: “Our staple product, the solid color bath towel, can serve as an example. The towel starts as spools of yarn, made from the highest quality US cotton. It is then weaved into rolls of terry and placed onto one of our automated, efficient looms to be finished. From there, it is bleached, scoured, dyed and pre-washed. Then it is off to be cut and sewn. Our automated sewing machines cut, stitch and place perfect labels on the towel, where it is hand inspected by one of our caring employees, before it is folded and packaged for shipping. While all this is taking place, our product development, design and sales teams are putting together the marketing campaign and merchandising vehicles for our product with no assistance from outside PR firms or spokespeople. Our shipping and logistics team handles all distribution of our products all over the world.”

About 80 percent of Cambridge Towels are made in solid colors. The remaining 20 percent are patterned and, consequently, are outsourced to facilities that have the capability and expertise. “We have customers who want patterned product and we want to satisfy those customers, so we outsource because the relative small quantities doesn’t make it economical for us to do here,” Thompson explains. “It’s a strategic decision to satisfy our customers in a way that makes the most sense for us, and for our customers. Our ability to do either/or is another feature that differentiates Cambridge Towel from other textile companies.”

Another key strategy decision is to pursue opportunities with eCommerce ventures that sell through the Internet. One recent example is the partnership with the Home Shopping Network to supply towels online for its Concierge Collection; the company also sells product online at Amazon, Beyond the Rack and eTowel. “This is another example of how Cambridge Towel is ahead of the curve,” Thompson says. “We were active with eCommerce customers long before anyone else in the textile industry. Everyone else is not trying to playing catch-up. In this business, the most critical element for success is good distributors, and there are a lot of good distributors operating on the Internet. Our eye is on the dot com business representing a big opportunity for future growth. ”

Which is not to say anyone is throwing in the towel when it comes to traditional brick and mortar stores. Indeed, Thompson notes that Cambridge Towel’s continued success, despite the recession, has been thanks to traditional retailers. “Here in Canada, one of our big customers is Wal-Mart, and we just picked up Sears. These two outlets are largely responsible for our regional growth here in Canada,” he says. “US markets have been okay, of late, but we’re looking for them to pick up soon.”

The company is also looking to perhaps expand beyond the bed and bath category into kitchen textiles. Mostly, however, Thompson says that the company’s unconventional thinking will continue to wipe up the towel business.