Incorporated: 1926
NAIC: 315224 Men's and Boys' Cut and Sew Trouser, Slack, and Jean Manufacturing; 315222 Men's and Boys' Cut and Sew Suit, Coat, and Overcoat Manufacturing; 315223 Men's and Boys' Cut and Sew Shirt (except Work Shirt) Manufacturing
SIC: 2325 Men's/Boys' Trousers & Slacks; 2311 Men's/Boys' Suits & Coats; 2385 Waterproof Outerwear; 2321 Men's/Boys' Shirts
Haggar Corporation and its subsidiaries are leading designers, manufacturers, importers, and marketers of men's apparel. Established in 1926, Haggar has played an important role in the fashion industry. "Slacks" did not exist until Haggar introduced them in the 1940s. Since that time, Haggar has expanded its line to include men's shorts, wrinkle-free cotton shirts, suits, and pants, including occasional forays into women's clothing. The company's goods are sold through about 10,000 department stores, specialty stores, and mass market retailers in the United States, the United Kingdom, Canada, Indonesia, and Mexico. Haggar also sells its clothing in 70 company-operated retail outlets. Haggar markets its products under its namesake, and under the licensed brands of Claiborne, Kenneth Cole, and Kenneth Cole Reaction. A private equity group led by Infinity Associates LLC acquired Haggar in 2005.
J.M. Haggar, a 34-year-old Lebanese immigrant, started Haggar in 1926. Born in 1892, Haggar sailed from his homeland to Mexico at the age of 13. He moved to the United States a few years later, settling first in Texas, moving on to New Orleans, and finally reaching St. Louis, Missouri. His first jobs were menial ones, such as dishwasher and window washer, but over the years his skill with people landed him inevitably in sales. After stints in the oil and cotton businesses, where his prowess as a salesman became legendary, by 1921 Haggar found himself selling overalls in Texas, Louisiana, and New Mexico for a company based in Missouri. While working at that job, Haggar concluded that selling many items at a single, stable price would bring more profit than selling a lot of different grades of merchandise each of which yielded a different and constantly shifting profit margin.
No Depression at Haggar
By 1926, Haggar had saved enough money to launch his own enterprise. He set up shop in Dallas and began to make and sell high-quality, low-cost pants for working men. Within three years, his Dallas Pant Manufacturing Company had 250 employees and occupied 6,000 square feet of space on two floors of the Santa Fe Building in Dallas. The company managed not only to survive, but to thrive during the Great Depression. In 1933 Haggar staged a "Prosperity Picnic/Parade" in downtown Dallas to demonstrate that his company was still hiring, and that good times were bound to return. By 1936 the company had opened a facility in Greenville, Texas, its first outside of Dallas.
Haggar's son, E.R. (Ed) Haggar, joined the company in the 1930s. Until the late 1930s, Haggar products were sold to chain stores and other accounts with no brand name attached to them. Under E.R. Haggar's direction, the company introduced brand names. In 1938, Haggar began its first national advertising campaign and began the creation of a national sales organization in order to raise customer awareness of the Haggar name, as well as its trademark Mustang brand. Haggar's second son, J.M. (Joe Jr.) Haggar, Jr., began to play a major role in company operations in the 1940s. During that decade, Haggar, with the assistance of the Tracey Locke Advertising Agency (a forerunner of advertising giant DDB Needham), coined the term "slacks." The idea behind slacks was that they were to be worn during the slack time away from work. Slacks quickly became an accepted part of the American male wardrobe vocabulary.
Around the same time, the Haggar name was becoming increasingly familiar across America through relentless advertising. The company became the first pants manufacturer to advertise in the trade journals, beginning with Daily News Record and Men's Wear Daily. With the success of those early ads, the company gradually expanded its advertising budget. Its ads soon appeared in such big-name magazines as Life, Collier's, and Esquire. Haggar's Life ad featured a gimmick called the "Haggar Harmony Chart." The chart showed men how to "mix and match" in order to triple their wardrobe with the purchase of a few pairs of Haggar slacks. The charts were also made available through retailers and by mail order from the company. The chart eventually disappeared, but by that time the idea of mixing and matching had sunk into the heads of previously fashion-shy American men. Several other now-common merchandising tactics can be credited to Haggar during this period, including two-pairs-at-a-reduced-price offers and prepackaged, precuffed, ready-to-wear slacks.
Haggar regularly placed ads in at least a dozen major magazines by 1950, and its distribution system grew accordingly. By 1954 there were 32 Haggar sales representatives roaming the country, more than double the number during World War II. As the "slacks" concept continued to gain momentum, Haggar latched onto the idea of well-known sports figures as the ideal pitchmen for their products. Advertising heavily in such publications as Sport and Sports Illustrated, the company began to associate its name with dashing sports heroes like Mickey Mantle, Bobby Lane, and Arnold Palmer.
The Television Age
One of Haggar's product innovations of the 1950s was "forever-prest," one of the first lines of pants made from wrinkle-resistant material. Meanwhile, television was emerging as an important new way to advertise, and Haggar became one of the first clothing manufacturers to take advantage of this new medium. One of Haggar's early television spots showed a pair of Haggar "forever-prest" slacks being crumpled up and run over by a steamroller. They were then picked up, shaken out, and shown to be wrinkle free. The ad was so successful that the Gimbels department store in New York sold out of the slacks less than 24 hours after its initial airing in that city. As with its early magazine ads, the success of Haggar's first television commercials led to a full-blown commitment to television advertising. The company became a sponsor of such shows as Sugarfoot, Bronco, Twelve O'Clock High, and Naked City.
As television expanded its coverage of sports in the 1960s, Haggar found a new male-dominated outlet for its advertising. The company became a sponsor of ABC's Wide World of Sports in 1963, and a few years later it became a major advertiser during NFL football game broadcasts. Haggar also advertised during other televised sporting events, including baseball, basketball, hockey, and tennis, as their television coverage grew.
In addition to advertising, Haggar meanwhile continued to innovate in other areas as well. New products such as the "Imperials" line of dress slacks created new market niches in the gaps between "casual" and "dress" clothing. Haggar also introduced the "Haggar hanger," a special hanger that streamlined the distribution process by allowing the company to ship pants already on hangers, ready to be put on racks by retailers. Among other innovations were Haggar's precuffed pants that didn't need to be tailored.
In the late 1960s, Haggar popularized polyester-and-wool permanent press pants. By the beginning of the 1970s, Haggar controlled the biggest chunk of the men's dress slacks market, with a 20 percent share, and the Haggar brand name was the one recognized most for dress pants among American men. So omnipresent was the Haggar label in American retail outlets that the company's unofficial slogan was "We cover the asses of the masses."
In the 1970s, Haggar introduced leisure tops to go with its slacks. By the company's 50th birthday in 1976, it increased its sales of slacks during a year in which sales for the industry had experienced substantial drop off. As in previous decades, new styles and products were added on a regular basis. A line of slacks called 640 was introduced in 1972, and in 1976, a contemporary line of slacks and tops called the Gallery, featuring a trimmer, updated fit and made of slick 1970s fabrics, was launched. A young men's line called Body Work was also added. The 1970s also brought the addition of Haggar sport coats and vests, and by the middle of the decade a customer fond of Haggar merchandise could pretty much clothe himself entirely in Haggar goods regardless of the occasion. By the end of the 1970s, the aging J.M. Haggar, while still retaining a powerful voice in company affairs, had handed over most of the duties of operating the company to sons Ed, who served as president, and Joe Jr., executive vice-president. By this time there were 16 plants manufacturing Haggar clothing, located across Texas and Oklahoma.
In 1983, Haggar launched the Reed St. James brand, a clothing line specifically conceived to be sold through discount retailers. The development of the Reed St. James brand solved the problem of how to tap into the lucrative discount store market without cannibalizing the company's department store sales. By creating a quality brand that could compete favorably with cheap imports, Haggar was able to gain a strong foothold in discount stores. The idea was so good that within a few years Haggar was licensing the Reed St. James name to several other menswear manufacturers, including Levi Strauss and Jockey. By 1986 the line was generating sales of $50 million for Haggar. Other 1980s breakthroughs for Haggar included the first use of both bar codes and Quick Response electronic data interchange technology among apparel manufacturers.
In 1986 competitor Levi Strauss caught Haggar off guard when it introduced its Dockers line of all-cotton pants. Dockers did what Haggar had made its reputation by doing; it found a space between casual and dressy that was not yet occupied. Since the tastes of American men had taken a turn toward the casual, Dockers took a sizable bite out of the market for Haggar's slightly dressier slacks. Haggar responded with its own line of all-cotton pants, but the company did not initially focus its marketing attention on this line. In 1990, Haggar's sales dropped 6 percent to $292 million, its first backslide in many years.
Cotton is King: 1990-2000
In 1990 Joseph Haggar III--known inside the company as Joe Three--took over company leadership from his father Joe Jr. Under Joe Three, Haggar unveiled a new line of wrinkle-free cotton pants, and spent $20 million advertising it. In 1992, after operating as a family business for its first 65 years of existence, Haggar went public, offering its stock on the NASDAQ exchange. By 1993, Haggar's wrinkle-free line had seized the momentum from Dockers in the race for king of the all-cotton's, and the company's position as a prime mover in casual pants--tough competition from Levi Strauss notwithstanding--was once again secure. Led by this new line, Haggar's sales rebounded to $380 million.
In 1994 Haggar introduced shirts made out of its fabulously successful wrinkle-free cotton material. The company also launched a line of casual/office clothing called the City Casuals Collection. Revenue reached $491 million that year. Disaster struck in 1995, however, as the roof on the company's main distribution center collapsed, interfering with Haggar's ability to keep stores supplied with its merchandise. As the company recovered from this mishap and worked out the bugs at its new Customer Service Center, Haggar recorded a net loss, the third in its history, in 1996.
In 1997 Haggar invented Cotton Flex, an all-cotton fabric with advanced stretch and memory capabilities, to compete against Levi Strauss. Officials at Haggar expected the company's new line of pants using Cotton Flex--dubbed the Black Label collection--to become dominant as everyday pants, taking over the wardrobe spot occupied by basic cotton twills.
2000 and Beyond
The company acquired Jerell Inc., a manufacturer of women's sportswear, in 1998. At the time of the deal, Jerell sold its products in major department stores and retail outlets including Dillard's, J.C. Penney, Coldwater Creek, Sears, Federated Stores, Foley's, and Nordstrom. After the Jerell purchase, the company established subsidiary Haggar Canada to oversee its womenswear businesses. By now, Haggar had also formed subsidiaries in the United Kingdom, South Africa, and Japan.
Haggar adopted a new marketing and branding strategy as it entered the new millennium. In an attempt to make the Haggar brand more casual, the company's new logo included a lowercase h. With the tagline "American Generations," the brand campaign divided the company's offerings into six major lines: haggar generations; haggar collections; haggar black label; haggar city casuals; haggar golf; and haggar heritage. Competition was fierce and despite the new brand campaign, sales remained lackluster.
During this time period, the company attempted to expand its business by forming key partnerships. In 2000, Haggar inked a deal with Donna Karan International to manufacturer its DKNY brand of men's pants. One year later, it teamed up with Liz Claiborne to manufacture its line of men's pants and shorts. In 2002, the company launched a line of pants that featured a hidden expandable waistband. It introduced its stain-resistant and liquid-repellant Freedom line the following year. In 2004, the fade and wear-resistant line, ForeverNew, hit stores shelves. Company sales grew slightly, from $481.8 million in 2002 to $487.9 million in 2004.
In 2005, the company announced plans to shutter its facilities in Mexico and the Dominican Republic. Later that year, a group of private equity firms including Infinity Associates LLC, Perseus LLC, and Symphony Holdings Ltd. made a $212 million play for Haggar. Joseph Haggar III and his management team believed the deal would allow Haggar to grow and succeed in the global marketplace. Shareholders agreed, and the purchase was complete on November 1, 2005. The next day, Haggar III, President Frank Bracken, and Executive Vice-President and Chief Marketing Officer Alan Burks were ousted from the company.
Haggar's new owners appointed Jim Lewis--an industry veteran who had previously worked for Haggar, Liz Claiborne, and Levi Strauss & Co.--president and CEO. The private equity group believed Lewis would breathe new life into the Haggar brand. "Over the years that Haggar was publicly traded, sales were basically flat or down," claimed Lewis in a November 2005 DNR article. He added, "With the resources of [Infinity Associates] I feel that we can truly grow this business." While Lewis was optimistic, only time would tell if that growth would materialize. The new CEO and his management team were confident, however, that Haggar's brand strategy and its return to private ownership left the company well positioned for future growth.
Principal Subsidiaries
Haggar Clothing Company; Haggar Canada, Inc.; Haggar Canada Company; Haggar Direct, Inc.; Jerell Clothing Management, Inc.; Haggar Women's Wear, Ltd.; San Gabriel Enterprises, Inc.; Multiples USA, Inc.; Haggar Apparel Ltd. (United Kingdom); Dallas Pant Manufacturing Company; McKinney Pant Manufacturing Company; Waxahachie Garment Company; La Romana Manufacturing Corporation; Bowie Manufacturing Company; Weslaco Cutting, Inc.; Weslaco Sewing, Inc.; Olney Manufacturing Company; Duncan Manufacturing Company; Haggar Japan Co., Ltd.; Haggar Services, Inc.; Edinburg Direct Garment Company, Inc.; Corsicana Company; Haggar Mex Manufacturing, S.A. (Mexico); Greenville Pant Manufacturing Co.; Weslaco Direct Cutting Company, Inc.; Haggar.Com, Inc.; HJMex S. de R.L. de C.V. (Mexico).
Principal Competitors
Levi Strauss & Co.; Phillips-Van Heusen Corporation; VF Corporation.
Further Reading
Bailey, Lee, and Stan Gellers, "Haggar Shakeup: Jim Lewis In, Key Execs Out," DNR, November 7, 2005.
Choi, Amy S., "Haggar Corp. Sold for $212M," DNR, September 2, 2005, p. 14.
Dodd, Annmarie, "Haggar Acquisition Takes Pants Maker, Brand into Women's Wear," DNR, December 18, 1998.
Forest, Stephanie Anderson, "Pumping No-Iron Slacks," Business Week, February 7, 1994, pp. 30-31.
"Haggar Clothing Co. Continues International Expansion with Canadian Subsidiary," Canada Newswire, August 17, 1999.
Haggar, Joe M., Jr., "Our Game Plan to Beat the Competition," Venture, October 1987, p. 126.
J.M. & Haggar Company: The First Fifty Years, Dallas: Haggar Company, 1976.
Karr, Arnold J., "Haggar Shuts Last Plants; Q2 Profits Up," DNR, May 9, 2005.
"A New Generation for Haggar," PR Newswire, March 29, 1999.
Palmer, Christopher, "Joe Three Fights Back," Forbes, November 22, 1993, pp. 46-47.
Richardson, Lynne, "New Slacks Line Adds to Haggar Loss," DNR, February 14, 2005.
Romero, Elena, "Haggar Ups Ante in Wrinkle-Resistant Game," Daily News Record, May 30, 1997.
Sloan, Pat, "Haggar Targets Women; Dumps TV, Men's Titles," Advertising Age, January 27, 1997, p. 3.
Spiegel, Joy G., "J.M. and His Haggar Slacks," Dallas Magazine, November 1975.
------, That Haggar Man, New York: Random House, 1978.
Stern, Aimee, "Success Has Seventeen Fathers," Dun's Business Month, August 1986, pp. 54-55.
Verespej, Michael A., "Creativity and Technology," Industry Week, April 6, 1987, pp. 55-56.
— Robert R. Jacobson; Updated by Christina M. Stansell
