Knitting a future in Milwaukee
Wisconsin Knitwear survives while others close or leave
The Business Journal of Milwaukee - November 24, 2006
by Rich Rovito
Steven Arenzon ... "There’s a myth about overseas production being cheaper."
Wisconsin Knitwear Inc. is about to become the last knitting mill to maintain production in the Milwaukee area.
Founded in 1979, Wisconsin Knitwear makes knit hats, scarves, headbands, beanies, face masks, golf club covers and other knit items. When Steven Arenzon's father started the business, it was the smallest of eight knitting companies manufacturing in the area. "We're about to become the sole survivor and we plan to stay," said Arenzon, who is now president.
While other knitting companies have either shuttered their factories or shifted production overseas, Wisconsin Knitwear has no plans to close down or to move its manufacturing, Arenzon said.
"There's a myth about overseas production being cheaper," he said.
That's often not the case, once transportation costs are taken into consideration, he said.
Wisconsin Knitwear has been able to survive in Milwaukee because it serves a customer base that insists on American-made products and quick turnaround of orders, Arenzon said. "Overseas manufacturers can't ship products in two weeks," he said. The company also accepts small orders, something many of its competitors won't do, Arenzon said.
Last factory Wisconsin Knitwear will be the last knitting factory in the Milwaukee area once Reliable closes its factory at 233 E. Chicago St., in Milwaukee's 3rd Ward, which is expected by the end of November.
Reliable plans to relocate its offices to 10,000 square feet at the West Allis Center, 1126 S. 70th St., but will shift production out of the country.
In January 2004, another of the area's long-time knitting mills, Everitt, closed its plant at 234 W. Florida St., Milwaukee, after nearly 100 years. Wisconsin Knitwear purchased some of Everitt's knitting machines at an auction, Arenzon said. "These machines are hard to come by," he said.
Arenzon declined to provide the names of customers, but said military surplus stores and a snowboard manufacturer are among his company's clients. The company also produces promotional hats, scarves and items with company names or logos knitted into the material.
Arenzon also declined to provide sales and earnings information. He said business has remained steady over the years, with minimal growth.
"We're always looking for more business, but we'd like to stay small," he said. "We don't want the company to be big. We keep it simple. We're doing good as is."
Arenzon's father, Mauricio, who immigrated to the United States from Argentina, and mother, Sheila, launched Wisconsin Knitwear. Mauricio Arenzon's father, Julius, operated a sweater manufacturing business in Buenos Aires in the 1940s. "Milwaukee used to be important in textiles," Mauricio Arenzon said. "So much has gone overseas. It's sad." Wisconsin Knitwear remains owned by the Arenzon family, but Steven Arenzon is the lone family member involved full-time. Arenzon's parents live in Florida, but take part in the decision-making process.
As a young boy, Steven Arenzon would help around the factory on Saturday mornings, but he never thought he'd have any major involvement in the business.
He moved to California for a few years with dreams of becoming an actor. When that didn't pan out, Arenzon decided to return to Milwaukee in the early 1990s.
"My parents were contemplating what was going to happen to the business," he said. "I decided to come back. I wanted to carry on the tradition." Being the lone remaining knitting firm with manufacturing in the Milwaukee area could be advantageous to Wisconsin Knitwear when it comes to serving local customers or those interested in American-made products, said Maria Monreal-Cameron, president, chief executive officer and executive director of the Hispanic Chamber of Commerce of Wisconsin, Milwaukee. "They have a very unique opportunity to capture the market," Monreal-Cameron said. Wisconsin Knitwear is housed in a 30,000-square-foot, four-story, company-owned building constructed in 1921. The building, assessed at $151,600, once was home to Branta-Rechlicz Furniture Co. Wisconsin Knitwear leased space on National Avenue before purchasing the Lincoln Avenue building in the late 1990s.
About 100 knitting machines line the third floor of the building, where yarn is transformed into knit products. On the second floor, workers sit at sewing machines and put the finishing touches on the hats and other products.
Factory automation is a foreign concept at the plant. "Everything is done by hand," Arenzon said. "There isn't a single computer." Noise from the knitting machines is constant during the company's busy season, which runs from August through February. Work slows considerably the rest of the year, leaving employees to perform maintenance on the equipment, Arenzon said. Employees' hours are reduced during the slow season, but Arenzon said he prefers to keep them on the payroll so experienced workers will be available when the busy season arrives.
The company has about 15 employees during its peak season and about 10 the remainder of the year. Nearly all of the employees live in the area surrounding the plant on Milwaukee's near south side.
The company is considering making lighter knit products that could be sold during warmer months as a way to increase production during slow periods, Arenzon said. Mauricio Arenzon credited his son with strengthening relationships with key customers. "The best thing that happened to me is that my son came into the business," he said. "I'm very proud of him."
WISCONSIN KNITWEAR INC.
Address: 1111 W. Lincoln Ave., Milwaukee
Web site: www.wisconsinknitwear.com
President: Steven Arenzon
Annual sales: Declined to disclose
Employees: 15 during peak season from August through February; 10 the rest of the year
Business plan: Manufactures custom-designed products such as knit hats, scarves, headbands, beanies and golf club covers
Growth plan: Continue slow growth to ensure ability to quickly fill customer orders and control overhead. Searching for product line extensions that could be sold during the non-peak season from March through July.
WHAT'S BEEN YOUR BEST BUSINESS DECISION? "Purchasing our own building and buying additional knitting machines."
WHAT'S BEEN YOUR WORST BUSINESS DECISION? "Buying 750 pounds of glue sticks by accident at an auction 10 years ago. I thought I was just buying one box. I still have about 250 pounds left."
WHAT'S THE BEST WAY TO KEEP A COMPETITIVE EDGE? "We know what we do best -- provide fast turnaround."
WHAT WOULD BE YOUR FIRST MOVE WITH A CAPITAL WINDFALL? "I'd stock up on materials."
WHAT IS YOUR FIVE-YEAR VISION? "We'll still be here. We've been working on diversifying a little bit."
WHAT WOULD BE AN INDUCEMENT TO SELL? "I wouldn't want to sell the business. I'd like to pass it along to my children and have the third generation take over. But if the right offer came along, maybe."
WHAT IS YOUR BIGGEST WORRY? "Overseas competition, although it really hasn't affected us much. I don't believe the solution is to go overseas."
Answers by Steven Arenzon