Malden Mills From Bankruptcy to Innovation

Malden Mills was on the brink of bankruptcy in 1996, with a debt of over $100 million and a workforce of just 1,500 employees. The company's owner, Aaron Feuerstein, had to make a tough decision to save the business.

The company was struggling to compete with foreign manufacturers who were producing similar products at a lower cost. Feuerstein's leadership and vision were put to the test as he sought to revamp the company's operations.

Feuerstein made a bold move by investing $50 million of his own money to revitalize the business, including upgrading equipment and expanding into new markets. This investment paid off, and Malden Mills began to flourish once again.

Malden Mills was founded in 1906 by Henry Feuerstein and operated for three generations under the Feuerstein Family. They started off with specialization in lightweight fabrics and wool clothing.

Malden Mills was a part of the Lawrence, MA community dating back to the glory days of the American textile industry in the early 20th century. The company was the city's largest employer, and their innovations were used by some of the biggest names in the industry, including L.L. Bean and the North Face.

Aaron Feuerstein, the grandson of Henry Feuerstein, passed away on November 4, 2021, at the age of 95.

Malden Mills was a part of the Lawrence, MA community dating back to the glory days of the American textile industry in the early 20th century.

Their customers included well-known brands like L.L. Bean, Lands End, Eddie Bauer, and the North Face, who all used their popular innovation, Polartec Fleece.

The company even supplied clothing to the Department of Defense, which used it for cold weather operations in Afghanistan.

Malden Mills was the city's largest employer, which made its decline all the more significant for the community.

Aaron Feuerstein, the company's owner, passed away in 2021 at the age of 95.

In the 1970s, garment workers in the United States faced dire straits, with Malden Mills being a prime example.

Malden's problems were addressed with the introduction of synthetic fleece in 1979.

This breakthrough technology was quickly adopted by Patagonia, who used it in their iconic Snap-T fleece pullovers.

By 1983, Malden Mills was able to recover from its dire situation.

On December 11, 1995, a devastating dust explosion occurred in one of the hoppers used to produce Polartec at Malden Mills, destroying three of the factory's buildings and causing 40% damage to the whole plant.

The fire, which was initially thought to have started in a boiler, was later found to have likely begun in a hopper on the "flock" line, where nylon fibers are oriented in a 50,000 volt electric field while applied to adhesive on a backing fabric.

This fire was a major blow to the community, as Lawrence, Massachusetts was already experiencing a downward economy due to other companies leaving the area. The fire injured 36 people and placed 2700 jobs at risk.

CEO Aaron Feuerstein made the bold decision to quickly rebuild the factory, extending the pay and benefits of his employees while the factory was being rebuilt.

The fire that devastated the Polartec factory in Lawrence, Massachusetts, was a devastating industrial accident that occurred on December 11, 1995.

A dust explosion in one of the hoppers used to produce Polartec destroyed three of the factory's buildings, causing 40% damage to the whole plant.

The fire happened during the company's off season, which minimized losses, but it was still the largest property damage fire loss in Massachusetts history at the time.

Initially, the cause of the fire was thought to be a boiler malfunction, but subsequent investigation revealed it was likely started in a hopper on the "flock" line.

In this line, nylon fibers are oriented in a 50,000-volt electric field while applied to adhesive on a backing fabric, and fibers occasionally ignited passing through this field.

Despite automatic fire suppression methods, a previous explosion occurred in 1993, seriously burning several workers.

The fire injured 36 people and placed 2700 jobs at risk, making it a dire situation for the community.

The fire was later ruled an "industrial accident", and it was a major blow to the already struggling economy of Lawrence, Massachusetts.

CEO Aaron Feuerstein made the decision overnight to quickly rebuild the factory, showing his commitment to the employees and the community.

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He extended the pay and benefits of his employees while the factory was being rebuilt, a gesture that earned him praise from many.

Rebuilding was completed on September 14, 1997, but it left 70 employees still displaced, and ultimately, Feuerstein's choices may have led to the insolvency of the company.

In November 2001, Malden Mills declared bankruptcy due to the recession at the beginning of the new year leaving the company unable to pay creditors.

The company's creditors showed remarkable generosity, and government subsidies helped Malden Mills achieve solvency.

Feuerstein was relieved of actual control of the company by its creditors.

Malden Mills filed for bankruptcy again in January 2007, and the company would be sold to the Gordon Brothers Group of Boston.

However, the assets of Malden Mills were purchased by Polartec, LLC, a newly formed company owned by Chrysalis Capital Partners of Philadelphia, Pennsylvania.

The federal Pension Benefit Guaranty Corporation took over the underfunded Malden Mills pension plan, which covers about 1500 employees, on June 28, 2007.

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The pension plan was abandoned because the company missed a $1.7 million pension payment, and the sale of Malden Mills assets sealed its fate.

A notice on the old Malden Mills website announced that the week of July 23, 2007 would be the final shipping period for rolls of fabric from the company.

Malden Mills' Deming Transformation was a sincere effort to study and apply Deming's teachings throughout the factory.

Management delegated the activity to experienced line managers, such as Marshall Hudson, who showed aptitude and enthusiasm for applying Deming's theory.

The line managers began to put into effect changes they learned at the GOAL seminar, inspired by Deming's 14 Points.

Installing Personnel Coordinators in departments was one of the changes, to assist workers with personal and work-related problems without having to go directly to management.

Replacing the production bonus system with profit sharing was another change, to reward everyone for production system improvements.

Efforts were also made to work with suppliers to reduce defects in incoming materials and to ensure uniformity in the direction of seam laps for backing.

Machines that could be demonstrated as the source of excessive variation and defects were replaced with control charts.

Training was improved to ensure everyone knew the correct methods for operating machinery and how to collect system data for improvements.

Here are some of the key changes made by Malden Mills' management:

Malden Mills' journey to improvement was marked by significant and manifold results. They realized $2M in savings in a $45M division on an initial investment of $50k in training and consultant fees.

The application of statistical process control techniques was a game-changer for the company. By using control (Shewhart) charts to account for flock and adhesive weights on one of their production lines, they achieved $1M in savings alone.

Replacing fabric cutting blades with improved chromed ones had a lasting impact. Not only did it reduce seconds levels due to poor clearings, but it also improved longevity, saving $125Kin regrinding and re-chroming costs.

Employee morale and engagement improved dramatically after the elimination of the production bonus system. This contributed to better relations with management, and employee turnover was reduced tenfold to 25%.

Absenteeism dropped from 6.5d to 2.5d per 100 workdays, and grievances went to zero over a two-year period.

Malden Mills has since rebranded to Polartec, which continues the legacy of the great invention of the 20th century, synthetic fleece.

The company never patented their invention, so now makers worldwide can create their own synthetic fleece products.

Synthetic fleece has become a staple in many people's wardrobes, and depending on your lifestyle, you might encounter it more often than wool that inspired its creation.

Polartec, the successor to Malden Mills, is still devoted to improving and providing high-quality synthetic fleece products.

Here's a list of some of Polartec's popular products:

Polartec NeoShell, launched in 2011, is a waterproof breathable fabric that competes directly against Gore-Tex and other similar products.