Creative reinvention leads to growth

Paul E. Kandarian More

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BUSINESS EXCELLENCE AWARDS

Creative reinvention leads to growth

PBN PHOTO/KATE WHITLEY LUCEY
A FINE HAND: George Matouk Jr. has reinvented the firm his grandfather founded and turned John Matouk & Co. into a globally competitive, high-end manufacturer and embroider of bed and table linens, among other things.
Posted 11/25/13

Paul E. Kandarian

Contributing Writer

When old-world craftsmanship meets modern technology, good things can happen. And good things get even better when a company continues to re-create itself to meet needs of the market and skillfully knocks down obstacles along the way.

“We’ve taken a comprehensive approach to reinventing every operational area of the business to compete effectively into the 21st century and steward the next generation of Matouks who may come along,” said George Matouk Jr., CEO of John Matouk & Co. and grandson of founder John Matouk. Matouk took over the company from his father, George Matouk Sr., in 2002, and began a successful reinvention process that his father encouraged.

The result for the third-generation company that creates luxury bed, bath and table linens has been rapid sales growth. For the past three years of available data, the company’s revenue has grown 61.5 percent, from $10.7 million in 2009 to $17.4 million in 2012.

“In the course of doing that, we launched ourselves on a sustained-growth trajectory,” the younger Matouk said. “This year we expect to close in on $20 million in revenue.”

The company achievements in recent years are many, he said, which resulted in “moving our marketing position from mid-level to the super-luxury tier.”

Though business has always been good, for a time the company wasn’t growing, the CEO said. The company had to shake things up to move forward. It did so by focusing on manufacturing and supply systems when he took over.

“At the time, we weren’t profitable in manufacturing, we had stagnant sales growth, table linens were being commoditized and at a dead end,” Makouk explained. “We reinvented ourself around bed and bath linens. We created a new identity system for the brand, a new logo and other materials to communicate the brand, including all our labeling, packaging and other collateral material. That gave us a great tool kit to tell our story in a more elevated way.”

Among Matouk’s major clients are Neiman Marcus, Bloomingdale’s and Saks Fifth Avenue, as well as new export and high-end hospitality markets near and far, including a hotel in Belize and a new one coming online in downtown Providence. Its shower curtains are found in such luxury hotels as Ritz-Carlton, Waldorf Astoria and Four Seasons.

The company invested heavily in new technology, such as state-of-the-art quilting and embroidery machines to expand its in-house production, which enabled it to crank out thousands of embellished towels for Bloomingdale’s flagship Manhattan store. In 2009, Matouk redesigned and relaunched its packaging and logo to capitalize on connecting with its already loyal customer base while establishing itself as a recognized luxury brand on the global scale.

Matouk also diversified its product line, adding a print line by textile designer Lulu DK, and an embroidered gift line in partnership with an upscale stationery company to attract younger shoppers. New categories such as quilts, casual table linens, candles and soaps have also been added, all part of the ongoing process of reinvention and responding to market demands, Matouk said.

Matouk’s key customer base is female, ages 35-65, with a household income greater than $150,000 a year. That sort of target meant easier recovery from the recession. “We came out of the depth of the financial crisis in a really good position in 2009,” he said. “It was tough, we had to make some strategic planning, and when our customer base recovered, which was sooner than the larger U.S. base, we were ready. Some of those investments really paid off.”

A major challenge in recent years was the unforeseen escalation of the price of cotton, which Matouk said could have been disastrous for the company. Matouk had no choice but to boost prices by 10 percent across the board, an unprecedented midyear hike that required concerted efforts among Matouk’s sales and marketing departments, independent representatives, customers and vendors to execute, but one that allowed the company to salvage its margins and profitability.

Another major investment was in facility and infrastructure, in the expansion of the factory by 30 percent in 2010, and then adding an 84-kilowatt solar-energy system. Said Matouk, “We were one of the early ones” in installing such a system.

“It produces about 35 percent of the electricity we need to run,” he added. “That’s been a great investment for us, and a good statement about the values we aspire to in being sustainable, making a small carbon footprint and being a leader in modern business practices.”

The effort did not go unnoticed: Matouk won the Innovation in Manufacturing Award from the Smaller Business Association of New England in May 2011.

The company continues to aggressively expand its domestic production capacity and is undergoing a facility expansion that will effectively double the size of its existing 47,000-square-foot plant in the Fall River Industrial Park. The expansion should be done by August 2014, and plans call for adding 45 new jobs on top of the existing 95 and increasing space for manufacturing, distribution and offices.

“We have a comprehensive site and landscaping plan for a full-scale corporate campus,” Matouk said. “We’ll have a walking path, a place for outdoor dining and enhanced indoor recreational opportunities for our employees.”

Matouk is the kind of workplace where original thinking is encouraged, its leader said. When he took over from his father in 2002, he was encouraged to begin the process of reinvention.

“I try to set a tone where change is encouraged and rewarded, and our team has responded,” he said. “They’re building the business and doing things I never would have imagined.”

Matouk also seeks new talent through local groups such as the Associated Industries of Massachusetts and the Fall River Career Center.

“We’ve got a great team, our manufacturing crew is amazing, skilled, committed, reliable and productive,” he said. “We’ve built a more-than-capable management team and added critical players in different areas, and together we’re able to thrive.”

As the company moves into the future, it is ever-mindful of its rich legacy. John Matouk was a Syrian who spent 10 years in Italy, where he learned the textile business and exported lace hand-made by convent nuns. He came to New York in 1929 and imported lace for sale in the U.S. market. When World War II cut off supply lines, he started manufacturing items like linens and decorative items, eventually expanding into bed and bath lines. The company moved to New Bedford in 1985 and then Fall River in 2005.

“We’ve effectively rebranded ourselves,” Matouk said, “while capitalizing on our heritage.”

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