I can't count the number of pairs of Adidas shoes I've packed into large cardboard boxes. My father sold athletic supplies to high schools and colleges across the state. My summers as a boy were spent in the basement of his business, which was in a building constructed in 1917 to serve as the Arkadelphia post office. We spent long hours filling boxes with supplies to ship out in advance of the school year.
Because my father was one of the top Adidas dealers in this part of the country, I'm familiar with the history of the German-based company started by Adolf Dassler in his mother's house in 1924. He was joined by his oldest brother, Rudolf, in what was known as Dassler Brothers Shoe Factory. Adolf Dassler developed rubber spikes for running shoes, which were superior to the heavy metal spikes that previously had been used. Jesse Owens utilized the company's spikes during the 1936 Olympics at Berlin.
The brothers split in 1949, with Adolf creating Adidas and Rudolf establishing Puma. My father also sold Puma products, though we packed far more Adidas shoes in those days.
Given that family tie to the Adidas brand, it's fun to be on the floor of the TY Garments USA factory on Fourche Dam Pike near the Port of Little Rock. Adidas apparel is rolling off the lines with "made in the USA" tags attached.
The Arkansas affiliate of Chinese clothing maker Suzhou Tianyuan Garments Co. began producing clothing for Adidas early last year. There are between 150 and 160 employees. That number is expected to increase to 215 later this year and to 400 within three years. The company has invested almost $20 million in Arkansas.
I'm in the huge break room talking to general manager Levi Wu about the automation that makes this facility one of the most efficient operations of its type in the country. TY Garments purchased an unused 100,000-square-foot building for $1.85 million and then transformed it. The company has partnered with engineers from Georgia Tech to design some of the machinery now being used.
Land owned by the Little Rock Port Authority has attracted hundreds of millions of dollars in foreign investments in recent years. Welspun Tubular came from India, LM Wind Power came from Denmark (it was acquired by GE Renewable Energy in April 2017) and it was announced last month that a Czech Republic gun manufacturer will make Little Rock its North American headquarters. CZ-USA plans to spend $90 million and employ about 600 people within six years.
"An interesting aspect of the TY operation is how many of its production-line supervisors and other personnel the company sends to China for training," says Lisa Ferrell, a North Little Rock attorney who has done work for the company. "Most of them had never left the country. One woman had never left Arkansas. It has been a great experience for them."
This is a far different business than the cut-and-sew operations that the Arkansas Industrial Development Commission (the predecessor to the current Arkansas Economic Development Commission) attracted to Arkansas in the 1950s and 1960s in an attempt to replace farm jobs lost due to the rapid mechanization of agriculture. A person can drive all over Arkansas and find buildings that once housed shirt factories, shoe factories and the like.
Due to the flood of sharecroppers and tenant farmers out of the state as farming became mechanized, Arkansas lost a higher percentage of its population than any other state from 1940-60. The cut-and-sew plants slowed the bleeding, but most of those jobs were gone to other countries by the 1980s.
"We believe the U.S. market will continue to be strong for Adidas for at least the next decade," Wu says. He notes that styles change often and that the plant is set up to change right along with consumer tastes.
I visit with training supervisor Marsha Watkins, a west Texas native who came to work for the company in 2017. She has been to China twice for training. I also visit with line supervisor Georgia Smith, a Sheridan resident who joined the company in January 2018 and went to China in August. She earlier had worked at a day-care facility.
Wu came from China to Little Rock last year. He says the company, which has been around for five decades, has a long-term plan and will continue to invest in Arkansas. More than 50 percent of the employees in China have been with the company for 10 years or longer. Other brands for which the parent company does work include Reebok and Armani.
A recent story in The Wall Street Journal noted: "Adidas said it was on track to resolve supply-chain issues ... in North America by the end of the year, easing concerns that the sportswear maker could stumble in its sales race against rivals Nike Inc. and Under Armour Inc. in the world's most important athletic-gear market. Chief executive Kasper Rørsted said the German company had increased its use of air freight to speed up shipping of midprice apparel, demand for which is growing, especially in the U.S."
Adidas has posted the fastest growth in North America among the big three sportswear makers. Nike remains the overall sales leader in North America.
"In recent months, Adidas has posted breakneck sales growth in North America, the home turf of industry leader Nike and challenger Under Armour, which is amid restructuring," The Wall Street Journal reported. "... Adidas has increasingly relied on partnerships with non-athlete celebrities to boost sales, including a collaboration announced in April with pop icon Beyoncé."
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Senior Editor Rex Nelson's column appears regularly in the Arkansas Democrat-Gazette. He's also the author of the Southern Fried blog at rexnelsonsouthernfried.com.
Editorial on 05/22/2019