The Business of Going Broke

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http://www.nytimes.com/2012/05/06/magazine/boom-time-for-the-going-broke-industry.html


Mike Diamond at Republic Textile in York, S.C.

Inside Republic Textile Equipment’s 60,000-square-foot warehouse, industrial-scale knitting equipment stands beside fabric-testing paraphernalia, which is next to printing machines and countless bins of spare parts. All of it, the remnants of factories and businesses gone bust, belongs to Mike Diamond, who has spent the last 50 years making a living in an industry that, for lack of a gentler term, might be called the going-broke business.

On a recent morning, Diamond was leading a tour of his facility for a client named Gamal Omar, who had traveled to York, S.C., from Egypt for, among other things, some discount shopping. Omar owns a fabric-and-apparel-manufacturing business in 10th of Ramadan City, and like virtually everyone in the apparel business, he struggles with competition from Asia. Buying new machinery is out of Omar’s budget, but older technologies bring productivity and quality problems. To remain competitive, he needs late-model textile machinery at used-car prices. And so he makes the trip to South Carolina about once each year.

Diamond, 73, walked Omar around his warehouse, extolling the virtues and histories of various contraptions. Omar looked at an Italian fabric-cutting machine from Main Knitting, a Montreal-based company that was once Canada’s largest producer of men’s underwear. Then Diamond showed him knitting equipment from a shuttered Vanity Fair lingerie factory. There was dyeing machinery from a shuttered South Carolina facility belonging to Delta Woodside, and a variety of lab equipment that tested everything from yarn strength to colorfastness. After about an hour, they stopped at a dozen or so sewing machines. “Five hundred dollars each,” Diamond said. “I’ll throw in the chairs.”

Unlike failed dot-coms or hedge funds, factories don’t vanish overnight. In my years studying the textile industry, executives of failed companies almost always told me that they saw the end coming. And that when it came, they needed help. “Most people don’t have a clue how to go broke,” Diamond told me. “Going broke is a business. You’ve got to know your suppliers. You’ve got to know your customers.”



*** for many countries -- certainly for the U.S. -- there was a rich history in the textile industry.
sad to see it sold off in all the different ways it has been.