Controlling Quality: The Hard Road to Building a Brand
The New York Times , September 17, 2005
When Craig and Randy Rubin started Hi-Tex Inc. in November 1993, they never intended to open a factory. ''Our charter was no bricks and mortar,'' said Ms. Rubin. The business, in West Bloomfield, Mich., was set up, she added, to be a branding and a technology company.
Now, 12 years later, they have more than $25 million in annual sales, 52 employees and a hard-won appreciation for how much day-to-day control it takes to turn a promising technology into a reliable brand. And, yes, they have a factory.
From the beginning, Randy Rubin was the branding expert, a marketing veteran of companies like Chevrolet and J.C. Penney. Her husband, Craig, had the technology, a new idea for an old industry.
In the late 1980's, inspired by a drugstore display of Depend adult diapers, he came up with an idea for a substitute for vinyl -- a way to make fabric that was breathable yet tough, impervious to liquid, stain-resistant and antimicrobial. He had researched the chemistry but, with a collapsing marriage and a ''beast'' of a boss, he never followed through.
In 1992 Mr. Rubin married Randy, and a year later he heard about a company that was putting vinyl on the back of fabric rather than on the front. Something clicked. He told his new wife about his old idea, and she convinced him they could build a company around it.
They patented the technology and trademarked the fabric's name, Crypton. They used a fabric-finishing contractor in South Carolina to process the raw fabric into Crypton and ship it to customers. They managed the business from their home in Michigan, hiring just a handful of employees.
''Our model was so Fast Company,'' Ms. Rubin said, referring to the new-economy business magazine. ''That's what we were. And it just didn't work.''
Things looked great at first. In 1994, the company's first year of operations, the Rubins projected sales of $200,000 to $300,000 but did more than $900,000. Their first promotional mailing, to 1,700 designers, got an unheard of 37 percent response.
Crypton quickly found a niche among contract furniture makers, particularly those selling to the health care industry. At $9.85 a yard, the new fabric was more expensive than solid-colored vinyl, which sold for a third as much, but it was about the same price as vinyl-coated printed fabrics.
Assisted-living centers were going up around the country, and they liked Crypton because it seemed homier than vinyl. McDonald's used the fabric in remodeled restaurants, giving fledgling Hi-Tex credibility. The company got its first patent in 1995, and the following year sales grew more than 76 percent.
The fabric let furniture companies slash inventory costs. Hi-Tex bought plain white polyester and had it treated to create Crypton. The company added patterns to the plain Crypton with heat-transfer printing. A customer could buy as little as 75 yards of Crypton, compared with minimum orders of 1,500 yards of vinyl. So a furniture maker could add Crypton prints to its sample book without carrying inventory. ''That's life-changing for the furniture manufacturers,'' Ms. Rubin said.
As Hi-Tex grew, however, its business got more complicated. In 1998, the company began selling a more sophisticated two-color woven fabric as well as transfer prints. It also licensed a mill to make woven Jacquard prints for conversion to Crypton. The licensee, rather than Hi-Tex, inventoried and sold those products. By 2000, four more mills began producing Crypton fabrics.
But a brand is not just a trademark. It's a promise and an identity created through customer experience. As sales grew, the Crypton brand started to have trouble keeping its commitments. Customers didn't always get their shipments within the promised five days, and the South Carolina contractor often could not tell the company where fabric orders were.
Customer relations grew tense. ''I would make a circuit of all our customers once a month for them to explain things to me,'' said Dan Fouratt, the company's chief operating officer. Ms. Rubin said, ''Dan would get beat up every time.''
Then, in the fall of 2000, Crypton broke its fundamental promise. ''We had our one field failure,'' Mr. Fouratt said. Blood soaked through the fabric on a new hospital chair, one of 576 covered in Crypton. The company tested several other chairs from the same site. Those seats also leaked. The contractor had skipped a step in the Crypton process.
Hi-Tex collected all 576 chairs and installed new, properly manufactured fabric on the entire lot. The customer was satisfied. But the failure marked a turning point. The Rubins decided to open their own plant.
''We learned a very hard lesson, that if we didn't have total control of the product, we couldn't really go to market the way we wanted to. We had nothing,'' Ms. Rubin said. ''If we weren't absolutely positive at the end of every night that it was being made perfectly, we would lose the whole thing.''
An outside contractor had been fine when producing Crypton was a relatively simple business of running uniform white fabric through a series of coatings. But the company's growth added complexity. The mills' Jacquard fabrics needed pretesting to make sure they could be transformed into Crypton and inspecting to verify that the process worked. Hi-Tex itself was adding new fabrics with different weights, requiring experimentation and separate runs. Besides, if sales kept growing, the business would eventually be too big for a single contractor.
In July 2001, the company bought a 115,000-square-foot former L'eggs hosiery plant in Kings Mountain, N.C., a rural town near Charlotte. Bad times for the textile industry were good for Hi-Tex. For the empty building on 35 acres, Mr. Rubin wrote a check for $1.1 million, down from the original asking price of $3.7 million.
To run the plant, the Rubins hired Rick Isbell, a seasoned plant manager from one of Crypton's licensed mills. In his old job, Mr. Rubin said, Mr. Isbell ''was Dr. Death. When they sent him into the plant,'' workers ''knew he was going to close it.'' Now, instead of shutting down plants, Mr. Isbell would build one from scratch.
With textile jobs disappearing, he could hire the area's best workers. ''We were fortunate to be able to go around when these plants were shutting down and talk to the plant managers. We got to really pick the best people they had,'' Mr. Isbell said.
Today, the North Carolina plant produces seven or eight times as many yards of fabric as the old operation. As fabric comes in from the mills, it's sorted, with similar weights and textures sewn together into rolls. Each roll goes through a primer solution, which gives the fabric its antimicrobial and stain-resistant properties, and then through an oven. Next, the fabric is covered in a thin, latex-based barrier coating and cured in another oven, a process that is repeated until the fabric meets the company's standards for repelling water.
Though it wasn't in the original plan, the plant has, in fact, made Hi-Tex a better technology and branding company -- and more ambitious. With a factory to equip and a small lab to experiment in, the company has rapidly developed new products, including suedelike upholstery fabrics, an indoor-outdoor fabric and a weatherproof, lightweight Crypton for Covercraft, the largest maker of car covers. Up next: Crypton carpet, a potentially huge market.
In November, a $1 million custom-made machine is expected to arrive from Italy, enabling a new process that Hi-Tex employees call ''Dan's coating technology,'' named after Mr. Fouratt. By reducing the amount of barrier coating, the process will make Crypton less stiff and allow the plant to treat textured fabrics like chenille.
That should not only expand the company's market but also help forestall some potential competition. W.L. Gore of Gore-Tex fame is now treating high-end upholstery fabrics -- the nubby textures and natural fibers that don't suit the Crypton process -- with its own Gore Seating Protection.
Randy Rubin, meanwhile, is plotting a strategy to make Crypton a residential upholstery brand.
Last year, Ms. Rubin persuaded the photographer William Wegman to design a dog-themed line of Crypton fabrics. Now she's starting a business to sell Crypton products, including tote bags, computer cases, pillows and -- most prominently -- dog beds. Independent sales reps will handle the retail market, while Hi-Tex sells the products on its Web site, cryptonfabric.com.
It's an elaborate publicity stunt. ''We really don't need to be making dog beds,'' Ms. Rubin said. The goal is to attract enough retail placements and press attention to make consumers demand Crypton from furniture makers. ''I don't see any other way to do it,'' she said. ''If you do, you tell me. To me it's the most logical thing we can do.''