Hering

Hering imports its first spinning mill, enabling it to make its own cotton yarn. Now a holding company, Hering is publicly traded for the first time. Hering becomes the exclusive Disney clothing licensee in Europe and the Middle East. The company returns to profitability after losing money in three of the previous four years. Cia Hering is a Brazilian holding company whose units are engaged in the production and sale of textiles and casual-wear clothing. These clothing items consist of intimate apparel, pullovers, and other general textile products, including T-shirts, pajamas, shirts, jackets, jeans, and fashion clothes. Hering subsidiaries are licensed to produce, sell, and export clothing under the Disney trademark. The company also operates and franchises retail clothing stores in Brazil. Hermann Hering was a German immigrant to Brazil who settled in the small southern state of Santa Catarina, which was also home to many other migrating Germans. In 1879, he acquired a circular loom, and the following year he and his brother Bruno opened a cotton-textile plant in Blumenau. The products of this family enterprise were well received, and as a result more looms were acquired and installed. The machines were originally driven by steam, later by waterpower, and still later by electrical energy. Hering began doing business outside Santa Catarina in 1900, when its first agent was sent to Porto Alegre in the neighboring state of Rio Grande do Sul. The company began selling systematically in Sao Paulo between 1908 and 1910 and later in Rio de Janeiro. By 1914, the company, now called Hering & Cia., was able to import its first spinning mill, enabling it to become one of the first textile companies in Brazil to make its own cotton yarn. By 1929, it had adopted its present name, Companhia Hering. In the course of time, Hering established another cotton-textile plant outside Recife, in Brazil's cotton-growing belt, far to the north of Santa Catarina in the state of Pernambuco. Hering's apparel was well-suited to a poor, tropical country. Its simple unadorned T-shirts, worn by generations of Brazilians, were so unremarkable that they later became "in" for young people. Hering was among the largest of the textile firms, and in 1929 the company employed more than half of all Brazilian workers engaged in manufacturing. In the late 1960s, textiles were still supporting 300,000 people directly and 600,000 indirectly. By this time, however, the industry was in trouble due to obsolescent machinery, poor management, and inadequately trained labor. For many years, in an inflationary climate, easy credit had been repaid in devalued currency. Customers quickly spent their money before it lost still more value, and the profits were put into real estate and other such outside investments instead of new machinery. This situation ended in 1964, when a military government assumed power and stabilized the currency, leading to a crisis in the textile industry but also to a restructuring opportunity. By the early 1970s, new equipment had been installed in most of the largest mills, and the quality of finished goods improved. Hering's spinning and weaving operations had sales of $25.4 million in 1973 and were producing such garments as pajamas, underwear, and sports shirts as well as T-shirts. The company also began making Wrangler jeans, under license, in 1983, and selling them in stores. Hering's annual sales from textiles and clothing came to about $300 million in the late 1980s. In the trade journal Knitting Technique, a visiting group of German and Austrian manufacturers called the company "one of the largest textile manufacturers in the world" and described the size of the Blumenau plant as "well above those appertaining in Europe" and exceeding "even the most imaginative expectations." Of the large numbers of circular knitting machines, almost 500 had been built by the company itself. The group was surprised to find that hundreds of workers w