Russell Corporation
Encyclopedia
Russell Brands, LLC, headquartered in Bowling Green, KY, is a manufacturer of sports equipment
, which markets its products under many brands and subsidiaries, including Russell Athletic
(its flagship brand), Spalding
, Huffy
, and Brooks
, amongst others.
Formerly a publicly traded company, Russell Brands has been a wholly owned subsidiary of Berkshire Hathaway
since 2006.
By 1990 the company owned and operated 13 sewing plants outside of Alexander City and employed 15,000 workers. Since 1976 sales revenues had increased by 13 percent annually. With the acquisition of two subsidiaries, Quality Mills in North Carolina and Cloathbond Ltd. in Scotland, in 1988 and 1989 respectively, the company had become a global contender in the sportswear industry.
Under President and CEO John C. Adams, Russell Corporation had become the top manufacturer of athletic uniforms in the nation. In 1992 the company was awarded a five-year contract to serve as the exclusive producer and marketer of athletic uniforms for most MLB
teams. The contract also stipulated that the company held the exclusive right to manufacture and market replicas of major league uniforms, T-shirts, and shorts. This put the company in an advantageous position in relation to its main rival, Champion, Inc.
, the supplier of uniforms to the NBA teams. In 1992 alone, Russell's international sales increased 40 percent over 1991.
In early 1998, as the company's troubles continued, Adams retired; stepping in as chairman, president, and CEO was John "Jack" Ward. Within months of Ward's arrival, Russell announced a major restructuring. Over a three-year period, the company planned to eliminate about 4,000 jobs, or 23 percent of its workforce; close about 25 of its 90 plants, distribution centers, and other facilities; and move most of the final assembly of garments abroad, to Mexico
, Honduras
, and elsewhere in the Caribbean basin. The company expected to take charges of $100 to $125 million during the restructuring period. Russell hoped these efforts would result in annual savings of $50-$70 million. Part of these funds would then be used to bolster the marketing and advertising of Russell's brands, including tripling the advertising budget to $25 million per year. Russell also established a second headquarters in Atlanta in February 1999.
Restructuring charges led Russell to post a fiscal 1998 net loss of $10.4 million on revenues of $1.18 billion. Results for the first half of 1999 also showed a net loss of $12.9 million but the restructuring had resulted in a decrease in selling, general, and administration costs of 13 percent. Russell had also increased its offshore apparel assembly to 55 percent of total capacity, a substantial increase from the 17 percent mark before the restructuring was launched. Russell had far to go before it could be considered fully turned around, but it appeared that the company was well on its way.
and Spalding
to their holding. Russell continued its acquisition spree in 2004 by purchasing American Athletic Inc. (AAI), Huffy Corp.
's sports division, and Brooks Sports. It also secured an extended contract to provide Spalding and Huffy branded products to the National Basketball Association.
The company faced challenges in 2005 due to rising costs and falling sales. During Hurricanes Rita and Katrina, over 40 containers of Russell products were lost or destroyed and nearly 70 percent of the ports it used for shipping were closed. Amid intense competition and faltering profits, the company launched a restructuring plan much like the effort of the late 1990s. Russell continued shifting its manufacturing base overseas and cut a total of 2,300 jobs.
Conglomerate Berkshire Hathaway Inc
. acquired Russell Corporation for $600 million in early 2006. Berkshire, led by billionaire Warren Buffett
, believed Russell would be a good fit with its Fruit of the Loom Inc
. subsidiary .
Since January 2009, Russell faces the largest collegiate boycott
of an apparel company in history over violations of labor codes in its Honduras manufacturing facilities. The boycott is coordinated by United Students Against Sweatshops
in the United States and Canada, and supports the campaign by the Honduran garment workers' union SITRAJERZEESH.
The Worker Rights Consortium
has documented violations of the rights of workers by Russell in its factory Jerzees de Honduras. The report finds that Russell illegally fired nearly 2,000 in two of its factories, in retaliation for employees protesting working conditions and forming a union. The report also states death threats were allegedly made against some members of the union, though not by high-level company management. In response, over eighty universities have canceled their contracts with Russell, including Duke University
, Georgetown University
, Columbia University
, University of Michigan
, University of Miami
, University of Maryland
, University of Washington
, University of Houston
, Penn State University, Rutgers University
, University of Minnesota-Twin Cities, University of Wisconsin–Madison
, Purdue University
, Cornell University
, University of Florida
, and the University of Aberdeen
in Scotland.
On May 13, 2009, sixty-five Congressmembers
wrote to Russell CEO John Holland expressing their concern over the labor violations. On June 25, 2009, Russell became the first collegiate licensee to be placed on probation
by the Fair Labor Association
.
At first, Russell said it was being unfairly targeted by the garment workers' union and student activists, and that the plant closure was due to the general down turn in the world economy. Five schools announced they planned to continue doing business with Russell, however at least one of those, the University of Florida
, has since terminated its licensing deal with Russell. The company had issued a statement noting that it had recognized the unionization of the Jerzees de Honduras plant on October 3, 2007. In later statements, the company admitted wrongdoing, although the violations are yet to be resolved.
(through its flagship brand, Russell Athletic
, the production of official basketballs for the NBA (through its subsidiary Spalding
), and the production of official footballs for the AFL
(under the Sherrin
Brand).
Sports equipment
Sports equipment is a general term for any object used for sport or exercise. Examples of sports equipment include:-Exercise equipment:Examples for exercise include swiss balls, weights, equipment for the gym...
, which markets its products under many brands and subsidiaries, including Russell Athletic
Russell Athletic (brand)
Russell Athletic is the main brand of the Russell Brands. Founded in 1902, the company produces uniforms for a wide range of sports, such as american football, basketball, baseball, softball and volleyball...
(its flagship brand), Spalding
Spalding (sports equipment)
Spalding is a sporting goods company founded by Albert Spalding in Chicago, Illinois, in 1876 and now headquartered in Bowling Green, Kentucky. The company specializes in the production of balls for many sports, but is most-known for its basketballs...
, Huffy
Huffy
The Huffy Corporation is an American importer and manufacturer of inexpensive mass-market bicycles. It was founded in 1887 when George P. Huffman purchased the Davis Sewing Machine Company and moved its factory to Dayton, Ohio. Seven years later, in 1894, Huffman adapted the factory to...
, and Brooks
Brooks Sports, Inc.
Brooks Sports, Inc. was founded in 1914 by Morris Goldenberg and is a company that produces high performance shoes, soccer and running apparel. Brooks originally produced bathing shoes in 1917 before moving into sports in the 1930s by producing baseball cleats in 1920 and football cleats in the...
, amongst others.
Formerly a publicly traded company, Russell Brands has been a wholly owned subsidiary of Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
since 2006.
Russell Corp. established
The original "Russell Manufacturing Company" company founded by Benjamin Russell become "Russell Corporation" in 1973, under the presidence of Eugene C. Gwaltney, who had taken over in 1968. .By 1990 the company owned and operated 13 sewing plants outside of Alexander City and employed 15,000 workers. Since 1976 sales revenues had increased by 13 percent annually. With the acquisition of two subsidiaries, Quality Mills in North Carolina and Cloathbond Ltd. in Scotland, in 1988 and 1989 respectively, the company had become a global contender in the sportswear industry.
Under President and CEO John C. Adams, Russell Corporation had become the top manufacturer of athletic uniforms in the nation. In 1992 the company was awarded a five-year contract to serve as the exclusive producer and marketer of athletic uniforms for most MLB
Major League Baseball
Major League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
teams. The contract also stipulated that the company held the exclusive right to manufacture and market replicas of major league uniforms, T-shirts, and shorts. This put the company in an advantageous position in relation to its main rival, Champion, Inc.
Champion (sportswear)
Champion is a manufacturer of clothing, specializing in sportswear. The brand is a subsidiary of HanesBrands Inc. , which was spun off by the Sara Lee Corporation....
, the supplier of uniforms to the NBA teams. In 1992 alone, Russell's international sales increased 40 percent over 1991.
Major restructuring
Although sales and net income reached record levels in 1996, in part because of the impact of the Summer Olympics which were held in Atlanta that year, Russell's fortunes turned south in 1997 when both sales and net income fell. The decline was caused by intensifying competition as industry-wide over-capacity and price-cutting by rivals forced Russell to lower its own prices, all of which hurt the company's results. Particularly troubled was the Licensed Products Division, which Russell dissolved in 1997, dividing its operations among the other divisions. In 1997 Russell also ended its licensing deals with the professional football, basketball, and hockey leagues.In early 1998, as the company's troubles continued, Adams retired; stepping in as chairman, president, and CEO was John "Jack" Ward. Within months of Ward's arrival, Russell announced a major restructuring. Over a three-year period, the company planned to eliminate about 4,000 jobs, or 23 percent of its workforce; close about 25 of its 90 plants, distribution centers, and other facilities; and move most of the final assembly of garments abroad, to Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
, Honduras
Honduras
Honduras is a republic in Central America. It was previously known as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize...
, and elsewhere in the Caribbean basin. The company expected to take charges of $100 to $125 million during the restructuring period. Russell hoped these efforts would result in annual savings of $50-$70 million. Part of these funds would then be used to bolster the marketing and advertising of Russell's brands, including tripling the advertising budget to $25 million per year. Russell also established a second headquarters in Atlanta in February 1999.
Restructuring charges led Russell to post a fiscal 1998 net loss of $10.4 million on revenues of $1.18 billion. Results for the first half of 1999 also showed a net loss of $12.9 million but the restructuring had resulted in a decrease in selling, general, and administration costs of 13 percent. Russell had also increased its offshore apparel assembly to 55 percent of total capacity, a substantial increase from the 17 percent mark before the restructuring was launched. Russell had far to go before it could be considered fully turned around, but it appeared that the company was well on its way.
New millenium
The company completed its restructuring process in 2001. Nearly all of its retail outlets had been shuttered, over 6,000 jobs had been cut, and most of its manufacturing operations had moved overseas. In 2002 the company added the Bike Athletic CompanyBIKE Athletic Company
Bike Athletic Company is a sportswear company with headquarters in Atlanta, GA. They invented the jockstrap in 1874 for bicyclists in Boston...
and Spalding
Spalding (sports equipment)
Spalding is a sporting goods company founded by Albert Spalding in Chicago, Illinois, in 1876 and now headquartered in Bowling Green, Kentucky. The company specializes in the production of balls for many sports, but is most-known for its basketballs...
to their holding. Russell continued its acquisition spree in 2004 by purchasing American Athletic Inc. (AAI), Huffy Corp.
Huffy
The Huffy Corporation is an American importer and manufacturer of inexpensive mass-market bicycles. It was founded in 1887 when George P. Huffman purchased the Davis Sewing Machine Company and moved its factory to Dayton, Ohio. Seven years later, in 1894, Huffman adapted the factory to...
's sports division, and Brooks Sports. It also secured an extended contract to provide Spalding and Huffy branded products to the National Basketball Association.
The company faced challenges in 2005 due to rising costs and falling sales. During Hurricanes Rita and Katrina, over 40 containers of Russell products were lost or destroyed and nearly 70 percent of the ports it used for shipping were closed. Amid intense competition and faltering profits, the company launched a restructuring plan much like the effort of the late 1990s. Russell continued shifting its manufacturing base overseas and cut a total of 2,300 jobs.
Conglomerate Berkshire Hathaway Inc
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
. acquired Russell Corporation for $600 million in early 2006. Berkshire, led by billionaire Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
, believed Russell would be a good fit with its Fruit of the Loom Inc
Fruit of the Loom
Fruit of the Loom is an American company which manufactures clothing, particularly underwear. The company's world headquarters is in Bowling Green, Kentucky. It is currently a subsidiary of Berkshire Hathaway.-Company profile:...
. subsidiary .
Brands
The Russell Corporation is made up by the following brands and their products:| Brands | Products | Year of Acquisition |
|---|---|---|
| Russell Athletic Russell Athletic (brand) Russell Athletic is the main brand of the Russell Brands. Founded in 1902, the company produces uniforms for a wide range of sports, such as american football, basketball, baseball, softball and volleyball... |
Clothing Clothing Clothing refers to any covering for the human body that is worn. The wearing of clothing is exclusively a human characteristic and is a feature of nearly all human societies... (uniforms for college and school teams) |
Former company |
| Brooks | Athletic shoe Athletic shoe Athletic shoe is a generic name for the footwear primarily designed for sports or other forms of physical exercise but in recent years has come to be used for casual everyday activities.... s, clothing |
2004 |
| Spalding Spalding (sports equipment) Spalding is a sporting goods company founded by Albert Spalding in Chicago, Illinois, in 1876 and now headquartered in Bowling Green, Kentucky. The company specializes in the production of balls for many sports, but is most-known for its basketballs... |
Ball Ball A ball is a round, usually spherical but sometimes ovoid, object with various uses. It is used in ball games, where the play of the game follows the state of the ball as it is hit, kicked or thrown by players. Balls can also be used for simpler activities, such as catch, marbles and juggling... s, accessories |
2003 |
| Jerzees | T-shirt T-shirt A T-shirt is a style of shirt. A T-shirt is buttonless and collarless, with short sleeves and frequently a round neck line.... s |
1992 |
| Bike BIKE Athletic Company Bike Athletic Company is a sportswear company with headquarters in Atlanta, GA. They invented the jockstrap in 1874 for bicyclists in Boston... |
Protections | 2002 |
| Dudley | Softball Softball Softball is a bat-and-ball sport played between two teams of 10 to 14 players. It is a direct descendant of baseball although there are some key differences: softballs are larger than baseballs, and the pitches are thrown underhand rather than overhand... balls and accessories |
2003 |
| AAI (American Athletic) | Gymnastics Gymnastics Gymnastics is a sport involving performance of exercises requiring physical strength, flexibility, agility, coordination, and balance. Internationally, all of the gymnastic sports are governed by the Fédération Internationale de Gymnastique with each country having its own national governing body... ' tables, bars, rings, horses Vault (gymnastics) The vault is an artistic gymnastics apparatus, as well as the skill performed using that apparatus. Vaulting is also the action of performing a vault. Both male and female gymnasts perform the vault... |
2004 |
Honduran sweatshop controversy & boycott
Boycott
A boycott is an act of voluntarily abstaining from using, buying, or dealing with a person, organization, or country as an expression of protest, usually for political reasons...
of an apparel company in history over violations of labor codes in its Honduras manufacturing facilities. The boycott is coordinated by United Students Against Sweatshops
United Students Against Sweatshops
United Students Against Sweatshops is a student organization with chapters at over 250 colleges and universities in the United States and Canada. In April 2000, USAS founded the Worker Rights Consortium , an independent monitoring organization that investigates labor conditions in factories that...
in the United States and Canada, and supports the campaign by the Honduran garment workers' union SITRAJERZEESH.
The Worker Rights Consortium
Worker Rights Consortium
The Worker Rights Consortium is an independent labor rights monitoring organization focused on protecting the rights of workers who sew apparel and make other products sold in the United States, particularly those bearing college or university logos...
has documented violations of the rights of workers by Russell in its factory Jerzees de Honduras. The report finds that Russell illegally fired nearly 2,000 in two of its factories, in retaliation for employees protesting working conditions and forming a union. The report also states death threats were allegedly made against some members of the union, though not by high-level company management. In response, over eighty universities have canceled their contracts with Russell, including Duke University
Duke University
Duke University is a private research university located in Durham, North Carolina, United States. Founded by Methodists and Quakers in the present day town of Trinity in 1838, the school moved to Durham in 1892. In 1924, tobacco industrialist James B...
, Georgetown University
Georgetown University
Georgetown University is a private, Jesuit, research university whose main campus is in the Georgetown neighborhood of Washington, D.C. Founded in 1789, it is the oldest Catholic university in the United States...
, Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
, University of Michigan
University of Michigan
The University of Michigan is a public research university located in Ann Arbor, Michigan in the United States. It is the state's oldest university and the flagship campus of the University of Michigan...
, University of Miami
University of Miami
The University of Miami is a private, non-sectarian university founded in 1925 with its main campus in Coral Gables, Florida, a medical campus in Miami city proper at Civic Center, and an oceanographic research facility on Virginia Key., the university currently enrolls 15,629 students in 12...
, University of Maryland
University of Maryland
When the term "University of Maryland" is used without any qualification, it generally refers to the University of Maryland, College Park.University of Maryland may refer to the following:...
, University of Washington
University of Washington
University of Washington is a public research university, founded in 1861 in Seattle, Washington, United States. The UW is the largest university in the Northwest and the oldest public university on the West Coast. The university has three campuses, with its largest campus in the University...
, University of Houston
University of Houston
The University of Houston is a state research university, and is the flagship institution of the University of Houston System. Founded in 1927, it is Texas's third-largest university with nearly 40,000 students. Its campus spans 667 acres in southeast Houston, and was known as University of...
, Penn State University, Rutgers University
Rutgers University
Rutgers, The State University of New Jersey , is the largest institution for higher education in New Jersey, United States. It was originally chartered as Queen's College in 1766. It is the eighth-oldest college in the United States and one of the nine Colonial colleges founded before the American...
, University of Minnesota-Twin Cities, University of Wisconsin–Madison
University of Wisconsin–Madison
The University of Wisconsin–Madison is a public research university located in Madison, Wisconsin, United States. Founded in 1848, UW–Madison is the flagship campus of the University of Wisconsin System. It became a land-grant institution in 1866...
, Purdue University
Purdue University
Purdue University, located in West Lafayette, Indiana, U.S., is the flagship university of the six-campus Purdue University system. Purdue was founded on May 6, 1869, as a land-grant university when the Indiana General Assembly, taking advantage of the Morrill Act, accepted a donation of land and...
, Cornell University
Cornell University
Cornell University is an Ivy League university located in Ithaca, New York, United States. It is a private land-grant university, receiving annual funding from the State of New York for certain educational missions...
, University of Florida
University of Florida
The University of Florida is an American public land-grant, sea-grant, and space-grant research university located on a campus in Gainesville, Florida. The university traces its historical origins to 1853, and has operated continuously on its present Gainesville campus since September 1906...
, and the University of Aberdeen
University of Aberdeen
The University of Aberdeen, an ancient university founded in 1495, in Aberdeen, Scotland, is a British university. It is the third oldest university in Scotland, and the fifth oldest in the United Kingdom and wider English-speaking world...
in Scotland.
On May 13, 2009, sixty-five Congressmembers
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
wrote to Russell CEO John Holland expressing their concern over the labor violations. On June 25, 2009, Russell became the first collegiate licensee to be placed on probation
Probation
Probation literally means testing of behaviour or abilities. In a legal sense, an offender on probation is ordered to follow certain conditions set forth by the court, often under the supervision of a probation officer...
by the Fair Labor Association
Fair Labor Association
The Fair Labor Association , a non-profit labor rights organization, is a multi-stakeholder initiative bringing together companies, colleges and universities, and civil society organizations to improve working conditions worldwide by promoting adherence to international and national labor laws...
.
At first, Russell said it was being unfairly targeted by the garment workers' union and student activists, and that the plant closure was due to the general down turn in the world economy. Five schools announced they planned to continue doing business with Russell, however at least one of those, the University of Florida
University of Florida
The University of Florida is an American public land-grant, sea-grant, and space-grant research university located on a campus in Gainesville, Florida. The university traces its historical origins to 1853, and has operated continuously on its present Gainesville campus since September 1906...
, has since terminated its licensing deal with Russell. The company had issued a statement noting that it had recognized the unionization of the Jerzees de Honduras plant on October 3, 2007. In later statements, the company admitted wrongdoing, although the violations are yet to be resolved.
Sponsorships
Throughout its history, Russell Corporation has been involved in the manufacturing and selling of equipment for many professional, collegiate, and high school sports teams. Most notably of these are its stint of manufacturing uniforms for MLBMajor League Baseball
Major League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
(through its flagship brand, Russell Athletic
Russell Athletic (brand)
Russell Athletic is the main brand of the Russell Brands. Founded in 1902, the company produces uniforms for a wide range of sports, such as american football, basketball, baseball, softball and volleyball...
, the production of official basketballs for the NBA (through its subsidiary Spalding
Spalding (sports equipment)
Spalding is a sporting goods company founded by Albert Spalding in Chicago, Illinois, in 1876 and now headquartered in Bowling Green, Kentucky. The company specializes in the production of balls for many sports, but is most-known for its basketballs...
), and the production of official footballs for the AFL
Australian Football League
The Australian Football League is both the governing body and the major professional competition in the sport of Australian rules football...
(under the Sherrin
Sherrin
Sherrin is a brand of football used in Australian rules football and is the official ball of the Australian Football League, designed to its official specifications...
Brand).