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Fruit of the Loom : company profile

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Memorably named Fruit Of The Loom is one of America's top two manufacturers of underwear and intimates. Its core brand is Fruit Of The Loom itself, which encompasses a broad range of men's, women's and children's underwear and innerwear. After several years of steady decline, Fruit Of The Loom was rescued from bankruptcy protection in 2002 by Berkshire Hathaway. Performance has improved dramatically since then, helped along by the resurrection of the popular "Fruit Guys" marketing campaign, first used in the 1970s. The Fruit Guys were finally retired again in 2013. The company has also expanded through acquisition, bolting on Russell Athletic sportswear as well as a collection of women's intimates brands including Vanity Fair and Lily Of France.

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Competitors

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Brands & Activities

Fruit Of The Loom is the #2 maker of male underwear in the US (behind Hanes), but has an especially strong position within mass discounters such as Wal-Mart and Target. It is also a leading manufacturer of women's and girls' underwear. The core brand is Fruit Of The Loom itself, which encompasses a wide range of woven or knitted cotton items in two areas of "intimates" - underwear such as boxer shorts and panties - and "activewear - t-shirts and fleeces. The brand is also widely known for its "Fruit Guys" marketing campaign, first introduced in the 1970s, and then relaunched in the 2000s with great success. The Fruit Guys were phased out in 2013 (following a change of agency) in favour of a new strategy promoting a "fresh start for every day". Among other promotions the brand tied up with LinkedIn to offer a free pair of new underwear to thousands of people starting a new job.

In a survey conducted by fashion trade magazine DNR in 2008, Fruit Of The Loom was named as the single most familiar brand among men (Hanes was #3). A similar study of women run by DNR's sister title WWD has long placed Hanes in the top spot. In addition to the main brand, Fruit Of The Loom also markets men's underwear under the BVD brand (originally introduced in 1876 as Bradley Voorhees & Day), sold mainly through JCPenney. The group is a leading trade supplier of printable T-shirts. The Fruit Of The Loom brand is worth around $2.1bn annually at retail. In 2014, the group launched a new premium-priced casual wear label in Europe under the name Seek No Further.

Following its purchase by Berkshire Hathaway, Fruit expanded its operation considerably with two large acquisitions. Russell Corporation was added in 2006 for $600m. Brands include Russell Athletic sportswear, Jerzees activewear and Spalding sporting goods. Amongst other honours, Spalding is the world's largest manufacturer of basketball equipment, and the official "game ball" sponsor of the NBA for more than 30 years. It has continued to expand that division with the bolt-on of softball manufacturer Dudley Sports, gymnastics specialist AAI and athletic apparel designers Bike, original inventors in the 1870s of the "jockey strap" or jock strap.

That purchase was followed in early 2007 by the intimate apparel division of VF Corporation for $350m. This unit trades as a separate division under the Vanity Fair Brands name. Its lingerie and intimate brands include Vanity Fair, Lily of France, Vassarette and Bestform. A collection of women's lingerie brands in Europe were sold in 2015.

Financials

Berkshire Hathaway doesn't break out revenues for Fruit Of The Loom, which is grouped with Garan, HH Brown and Brooks Sports under the general heading of apparel & footwear. The group's combined sales from that segment were approximately $4.3bn in 2016. Around 80% of sales are generated in the US, and Walmart is the biggest single customer, accounting for over 40% of revenues.

Management

Melissa Burgess-Taylor was named as chairman & CEO of Fruit Of The Loom Inc at the end of 2016 following the untimely death of Rick Medlin, leader for the previous six years. Marketers include Scott Greene (SVP, brand management), Mark Hartman (VP, marketing, Fruit Of The Loom), JoAnna Beddingfield (VP, brand management, Vanity Fair brands) and Christie Lindsey (marketing communications director).

Background

The Fruit of the Loom brandname was first coined in the 1850s by textile manufacturers Benjamin and Robert Knight, as a description of their woven cotton and linen cloth. In 1856, they commissioned the daughter of one of their customers to produce a range of paintings of individual fruit to illustrate the brand, which was trademarked in 1871, just a year after the introduction of trademark law in the US. The well-known apple, grapes, gooseberries and leaves logo was first adopted (in a slightly more ornate form) in 1893 for the Chicago World's Fair.

By 1902, the Knights controlled one of the biggest textiles empires in the US. However within 20 years the company's fortunes had dwindled considerably in face of competition and cheaper imports of cotton cloth. In 1938 the brandname was licensed by Union Underwear, who launched men's underwear under the brand for the first time during the 1940s. After the war, Union grew to become America's largest manufacturer of men's underwear, and the business was eventually acquired in 1960 by diversified conglomerate Northwest Industries. Fruit Of the Loom became a household name in the 1970s for its US television commercials featuring men dressed as fruit (the "Fruit Of The Loom guys"). The campaign was developed by the brand's long-standing agency Grey New York, who managed the brand for almost four decades from the early 1950s. At the same time, the company broadened its range into children's and women's underwear for the first time.

In 1985, Northwest was acquired by entrepreneur William Farley, and renamed Fruit Of The Loom Inc. Farley widened its product range still further into hosiery and sweatshirts and acquired rival underwear brand Gitano. But by the 1990s, the company was in trouble following a sharp decline in profitability. Cost-cutting, including the closure of all its US manufacturing plants, only worsened Fruit's position, and the company closed down its international subsidiaries and began selling off chunks of the business in 1995 in a bid to survive. Farley resigned as CEO in 1999, the same year as the company filed for bankruptcy protection. Eventually, the business was acquired in 2002 for $835m by Berkshire Hathaway. The company relaunched its business in Europe in 2003 after a 10 year absence from that market.

Last full revision 22nd February 2017

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