Well-Suited In an industry on the wane, clothier flourishes

When it comes to fine men's clothing, certain names come to mind: Burberry, Christian Dior, Halston and J. Schoeneman Inc.



Despite near-anonymity among consumers, the Owings Mills-based company is a major manufacturer of men's suits, jackets and slacks. Its products bear the labels of prominent designers and those of chic retailers such as Saks Fifth Avenue and Neiman-Marcus.

Schoeneman, founded in 1889, has outlasted apparel makers such as Lebow Bros., L. Greif and Raleigh Clothes, which have closed their Maryland operations. And it is more than a survivor -- it has expanded and added hundreds of workers.


"What we've done is actually contrary to what has been going on," said James J. Stankovic, president and chief executive officer. "Not only in the industry, but in the nation."

Schoeneman, which has about $100 million in annual sales, has stayed healthy because its high-end market niche has been spared the brunt of foreign competition. Mr. Stankovic also credits the company's determination to stay abreast of fashion trends and a lean, efficient work force that has remained dedicated despite several ownership changes in recent years.

Maryland's apparel industry employment dropped nearly 50 percent over the past decade -- from 12,479 in 1982 to 6,292 in 1992, according to the Maryland Department of Economic and Employment Development. The reasons: foreign competition, corporate defections to Southern states and internal reductions to boost efficiency.

Nationally, apparel industry employment has dropped 18.4 percent -- from 997,200 in 1982 to 813,900 in 1992, according to U.S. Labor Department figures.

"In effect, labor-intensive jobs have gone overseas," said Peter Nadash, regional director and international vice president of the International Ladies' Garment Workers Union. He has seen union membership in a five-state area drop from 17,000 to less than 4,000 in the past decade.

Schoeneman, meanwhile, has more than 2,000 employees. Its main operations: a 1,723-worker factory in Chambersburg, Pa., and the 236-worker headquarters and distribution center on Reisterstown Road in Owings Mills.

The company, which is privately held, won't reveal detailed financial results. Company officials say it has consistently turned a profit, though sales have remained flat over the past five years.

Schoeneman's latest expansion started in March 1992, when it captured the licensing rights to Christian Dior menswear. That coup, which should add between $25 million and $30 million to annual revenues, prompted Schoeneman to rehire hundreds of laid-off workers.


Then last April, Schoeneman's parent company, Plaid Holdings Corp., announced that it was buying the men's tailored clothing business of Crystal Brands Inc., which included the Palm Beach Co. of Cincinnati and the Calvin Clothing Corp. of New Bedford, Mass.

That acquisition, which includes plants in Alabama, Georgia, Kentucky, Massachusetts, Ohio and Tennessee, more than doubled Plaid's work force, to 4,000, and boosted annual sales to about $300 million. It also added such prestigious labels as Palm Beach, Haspel, Evan-Picone, Polo for Boys by Ralph Lauren and Pierre Cardin for Boys.

And to cap last year's burst of activity, Schoeneman bought and reopened the Gleneagles outerwear plant in Bel Air, recalling 77 workers in recent months.

Stability amid change

Schoeneman could have become a casualty of the corporate takeover binge of the late 1980s -- in a series of mergers and acquisitions, the ownership of Schoeneman changed four times

in five years.


But the energetic, effusive Mr. Stankovic -- a 33-year veteran of Schoeneman -- lent stability to the company. Through most of those changes, he remained president and chief executive officer, and the basic Schoeneman operation, along with its management team, were left alone.

"Essentially, we turned a deaf ear to whose names were on the documents that said who owned Schoeneman," Mr. Stankovic said at the Owings Mills distribution center, where coats and jackets hang on long racks, like some giant dry cleaning operation. "There is only one thing that can take you through trials and tribulations like that; that is a totally, 100 percent dedicated force of labor."

He should know. The former union member started as a stock boy at Schoeneman and moved up through the ranks. Today, he praises the willingness of union workers to perform a variety of duties.

Just a decade ago, for example, workers who sewed sleeves onto coats would leave the plant if there were no more sleeves on hand. Today, the workers simply move to another task, such as sewing linings into coats.

"We run a very, very tight ship. A very, very lean ship, if you will," he said. "A lot of people cross a lot of lines."

Schoeneman's managers work closely with labor to boost productivity, says Carmen S. Papale, manager of the Baltimore Regional Joint Board of the Amalgamated Clothing & Textile Workers.


The managers meet regularly with employees to hear suggestions on organizing work. One example: Workers suggested a new way to mark the spot where suspender buttons are sewn on pants. That saved the company more than $12,000 a year.

Schoeneman also has prospered by paying close attention to fashion trends, including new fabrics. The company was one of the first to offer "Ultrasuede" clothing and lined up exclusive contracts to buy the fabric from mills. Today, it is moving into "microfabric," a lightweight material that looks naturally wrinkled.

As a private company, Schoeneman has not received the scrutiny that a publicly traded company comes under. But for those analysts who are familiar with it, Schoeneman enjoys a good reputation.

"It's known for good quality," said Edward F. Johnson, director of Johnson Redbook Service, a research boutique that tracks the textile, apparel and retail industries.

The company has modernized its plants and controlled costs while maintaining quality, he said. And Mr. Johnson expects conditions to improve for Schoeneman because men's suit sales are picking up and department stores are increasingly selling private label merchandise -- a Schoeneman specialty.

Tackling foreign competition


Plaid Holdings, a collection of foreign and U.S. investors formed shortly before buying Schoeneman, might expand further. Although all of its acquisitions so far have been American, Vice Chairman William B. Anneken does not rule out future deals in other countries. "We'll pursue any opportunities that make sense," he said.

But he rules out moving Schoeneman's production to another country. "There is a certain level of workmanship and mystique that could not be easily translated overseas."

Still, Mr. Anneken is concerned by increasing competition from Mexico and the Caribbean.

"We will have to do better what we are doing," he says.

Mr. Stankovic, who has been elevated to president and chief executive officer of Plaid Holdings, also is very conscious of foreign competition, though Schoeneman hasn't been the primary target of low-cost, foreign producers. Schoeneman's main foreign competition is European, particularly Italian clothing, which has captured part of the U.S. market in recent years.