Strategy and Structure in the Textile Industry: Spencer Love and Burlington Mills, 1923-1962

Abstract

Shrewd product selection allowed Spencer Love to build Burlington Mills into a large profitable firm in what most observers regarded as a declining industry, textiles. Using integration, diversification, and a multidivisional structure, he then attempted to have Burlington dominate its industry just as a few other large corporations controlled steel, automobiles, and chemicals. In textiles, however, powerful forces constrained and sometimes defeated these strategies. After the emergence of artificial and synthetic fibers, textile mills became dependent on large yarn manufacturers in the chemical industry such as Du Pont and Celanese. In addition, large size and diversification did not always protect a company's profits, and forward integration into the volatile women's garment industry proved to be especially dangerous. In the end, Love concluded that Burlington should remain a weaving and knitting company; when he died in 1962, textiles remained an industry in which small, specialized firms survived alongside the corporate giants.