Bud Kilby: CEO and President, Renfro Corporation
Please tell us more about this new deal with Walmart. After all, if I am not wrong, Renfro has been selling socks to Walmart since the 1970s.
Yes, we have sold Walmart since the 1970s and have grown with them. We provide Walmart a variety of products, both branded and private label, across all departments, all genders. We have participated in Walmart’s US manufacturing initiative since its inception several years ago. Renfro was one of the first companies to join this effort with Walmart. This latest expansion is the result of our bringing to Walmart better product, better presentation made in the US. Walmart recognised the value in this latest proposal. We believe it met Walmart’s strategic goals.
Renfro Corporation has had a manufacturing facility in Fort Payne since the 1980s. Could you tell us more about the ups and downs with the manufacturing facility there?
The Fort Payne factory has existed since the 1980s. Over time, its capabilities have been enhanced, and it has been further automated to improve quality and to lower costs. Its capacity has increased.
Fort Payne itself was once known as the Sock Capital of the World, but over time the title seemed to have lost its significance. How do you react to that?
The closing of most of the other sock manufacturers in Fort Payne is unfortunate for that community. We chose a different path for our factory there, and have been able to identify and to manufacture product there that fits the factory’s evolving capabilities and that can be done competitively with similar product manufactured outside the US.
US President Donald Trump wants jobs back in the US. But given your global presence, how do you plan to tread that thin line between manufacturing relatively expensive products in the US, and relatively cheaper products outside?
We do have a global presence and our resources outside the US are also critical to our total supply chain and critical to our total product offering. Both US and imported product are necessary for our company to supply all the types of products that our customers want at prices they are willing to pay.
Four years from now, Renfro would be completing 100 years. How do you look at the past?
Yes, our 100th anniversary is approaching. We are proud of that continuous history—our ability to survive and to prosper through many economic and competitive challenges. We believe that we should honour the past, recognise and appreciate it.
And what about the future? Are you planning for the next 100 years, or are you looking only at the immediate future?
But, the future brings change. Always. So honour the past, but find the opportunity in change. That is how we will prosper for another 100 years. Of course, we are planning for more than the next year.
You have manufacturing and distribution facilities across the world. Do you have expansion plans charted out?
We do have expansion plans in the US, the rest of North America and in key markets outside North America. We also have plans for continuing product evolution.
Renfro has had partnerships with retailers and suppliers like Walmart, Macy's, etc. Are you still going to rely heavily on partnerships?
Part of our strategy and part of our culture is to maintain key partnerships. Relationships matter. Long-term partnerships matter, and they are a necessary component for success. We have customer relationships that have existed since the 1920s. We have supplier and brand partnerships that have existed for many decades. Trust can take a long time to earn. It is meaningful and valuable, and we recognise how important it is to our success.
Athletic socks have been dominating the socks market for a while. Do you expect this trend to continue? Or do you also see other legwear categories expanding at a relatively faster rate in the near future?
Athletic socks will continue to comprise a significant portion of the market. But consumers have many broadening preferences related to usage occasion, lifestyle and fashion. Consumer preferences continue to represent greater variety in construction, fibre, design and colour.
In terms of material used (be it nylon, cotton, polyester, wool, or even waterproof breathables), what is the trend likely to be in the days to come?
The trend on fibre type, whether natural or synthetic, has changed some recently. The preference on fibre often varies by geographic region, but it also varies by usage intent. Some fibres are preferred for certain technical applications while others are preferred for various lifestyle applications. One thing is certain: Consumers are demanding a greater variety of fibres and constructions depending on usage intent.
Ceteris paribus, how sustainable are you at the present? How are you ensuring environmental compliance?
We monitor, measure and track our sustainability efforts. Part of our culture requires the company to operate in a sustainable manner, to respect the environment. So we have numerous projects under way to improve the impact of the footprint we leave, and we do have goals set to improve continuously. Some of our partners require us to report our progress. Walmart has a significant sustainability initiative, and we believe that Walmart’s leadership in this initiative with its suppliers continues to have a very positive impact on our environment.
Please tell us more about your current India operations.
Our company operates two factories in India. We also market, sell and distribute a variety of products and brands in the Indian domestic market. We have earned a significant market share there. We are very pleased with our workforce in India. Our staff there is very capable, sophisticated in business practice and competitive with any management group in the world. We are very proud of our group there; it has responsibility for and manages our efforts in Europe and Asia.
How do you see the Indian market? Especially, with respect to other markets?
Our Indian operations have grown and our domestic sales have grown. We expect that to continue. We expect our capacities in India to increase with that growth. Our revenue growth in India is expected to outpace growth in most other markets where we operate.
Scott Markley: Spokesperson, Walmart
The new Walmart-Renfro deal is expected to create 442 new jobs. How significant is this, considering that the number 442 is far too small to be of much economic significance. And, aapart from the one with Renfro, which are the deals with other manufacturers that will create new jobs in the US?
Walmart’s commitment to buy $250 billion in products supporting American jobs by 2023 is having a tangible impact on communities across America. In the three years since we launched our initiative we have seen factories opened, jobs created and American products added to our shelves in stores and online. We evaluated 1,300 categories and are pursuing opportunities across the business. We have hundreds of active initiatives under consideration and have shared many successful examples including:
- California Innovations, producer of the Ozark Trail “super cooler.” The Canadian company with US operations is moving production of the cooler from China to a factory in Atlanta, Georgia, creating 350 jobs.
- Edgewell Personal Care, a maker of personal hygiene products, which is bringing production from Canada to Dover, Delaware, creating 272 jobs.
What percentage of products retailed by Walmart in the US are in fact manufactured in that country? How do you expect to maintain a balance?
According to data from our suppliers, items that are made, assembled, sourced or grown here account for about two-thirds of what we spend to buy products sold at Walmart US.
The Walmart US Manufacturing Innovation Fund that was launched in 2014 is expected to create 1 million new US jobs. You are already three years into that project. Where do you stand now, and how are you planning ahead?
We are four years in to our commitment and are excited that we are right on target of where we need to be to accomplish our goal by 2023.
In January this year, six research and academic institutions were awarded nearly S$ 3 million in grants by the Fund for their work focused on innovations in textile manufacturing. Could you elaborate on Walmart's plans and ideas w.r.t textile innovations?
In 2014, Walmart and the Walmart Foundation pledged $10 million over five years to fund the development of domestic manufacturing with a specific goal of advancing the production or assembly of consumer products in the .S. This current round of grants will complete the $10 million commitment.
The Walmart US Manufacturing Innovation Fund is designed to provide grants in support of applied research projects advancing innovative solutions to key challenges that have the potential to lower the cost of making consumer products in the US. The fund is a collaboration between Walmart, the Walmart Foundation and the US Conference of Mayors who strive to find innovative ways to grow local economies.
Also earlier this year, Walmart had announced that it would add 10,000 retail jobs in the US with 59 new, expanded and relocated stores. The number of new stores is said to be fewer, but the number of jobs is more. What is the reason for this?
Walmart is in a period of unprecedented investment to better serve customers. To do that, we continue to find ways to operate more efficiently and effectively, true to our cost-conscious heritage. We are getting great feedback from our customers about the changes under way and plan to be aggressive going forward to serve them even better.
Overall, how do you see US manufacturing shaping up? Has the US dragged itself out of the global slowdown? Are things looking better?
By investing in products that support American jobs, we are able to bring new products to our shelves that our customers want—and new jobs to our communities. Increasing domestic manufacturing will help create additional jobs in the US—that's good for American businesses.
In this context, how do you see the manufacturing of textiles/apparel? Walmart had embarked on the job creation agenda some 3-4 years before US President was sworn in. You were under no compulsion to manufacture in the US earlier, but are you now?
We’ve been focused on encouraging manufacturing in the US with our suppliers for several years now and launched an initiative in 2013. As the largest private employer in the US making significant investments in our business that impacts local communities nationwide, we’re proud of the roll we play helping create and support jobs in the US.
The new US regime is said to be working on a proposal on how imports get taxed. How is Walmart handling this? Very broadly speaking, how do you see Walmart fitting into the new scheme of things?
We look forward to working with the Administration (and Congress); however, it is too soon to discuss policy at this time.
What are your India plans? At the last count, Walmart had 21 stores in India. What are the plans for expansion? The Indian government too wants everyone to 'Make in India'. How do you plan to operate in a global scenario where every country wants to retain or even expand its manufacturing base?
It is in our best interest to have our suppliers succeed. We believe in helping them understand the Walmart business, changing global trends and achieving the right certifications if they are needed. We like to source from local businesses and support sourcing efforts in our countries like Make in India.
Walmart India currently operates 21 stores across the country in 'cash and carry' format and plans to open 15 more stores in next five years.
