Unifi, Inc. History

7201 West Friendly Road
Greensboro, North Carolina 27410

Telephone: (910) 294-4410
Fax: (910) 316-5422

Public Company
Incorporated: 1969
Employees: 4,500
Sales: $849.12 million (2003)
Stock Exchanges: New York
Ticker Symbol: UFI
NAIC: 313111 Yarn Spinning Mills; 313112 Yarn Texturizing, Throwing, and Twisting Mills

Company Perspectives:

OUR MISSION: Provide Innovative Fibers and Competitive Solutions. Unifi's long-standing reputation for manufacturing excellence rests on our ability to supply innovative and consistently high-quality polyester and nylon textured yarns, worldwide. Positioned at the beginning of the supply chain, Unifi typically sells directly to fabric and thread makers, who in turn supply products for a wide variety of end uses. In addition to the texturing of polyester and nylon, we provide package dyeing of both textured and spun yarns, covering of elastomeric and other yarns, conventional and warp draw beaming, and the twisting of yarns. Unifi products are often specified by downstream manufacturers, brands, and retailers for the unique qualities they bring to finished products. As one of the world's largest processors of synthetic yarns, our products can be readily found in home furnishings, apparel, industrial, automotive, hosiery, sewing thread, military, and medical applications.

Key Dates:

Unifi begins producing polyester yarn.
The company enters the Chinese and European markets.
A polyester plant in Ireland is opened.
The polyester business of Macfield Inc. is acquired.
The remainder of Macfield and Vintage Yarns is acquired.
Sales pass $1 billion.
Unifi merges with the Pioneer Corporations.
Unifi Technology Group is spun off; Brazil's Fairway Poliester is acquired.
The company's technical fabrics division is sold off.
Several hundred jobs are cut in restructuring.

Company History:

Unifi, Inc. is one of the largest manufacturers of textured polyester and nylon in the world. The company also produces various natural and blended materials. From its high-tech production facilities in the United States and Ireland, Unifi exports its output to more than 40 different countries. Unifi increased its revenues more than three-fold during the early 1990s by merging with several other companies to form Unifi Spun Yarns, Inc.

Before the turn of the 21st century, Unifi's world began to change. Although recognized as a leader in innovation in the industry, the company found itself compelled to make several changes to adapt to the new global marketplace. It hired its first marketing staff, entered new markets and territories via partnerships, and scaled back its workforce, while continuing to develop new products.


The Unifi (rhymes with butterfly) story is one of spectacular triumph over adversity. The company started its operations in 1971, manufacturing polyester yarn that was popular with the textile industry at the time. When Unifi opened its doors, there were already more than 50 other companies competing in the United States. Unfortunately, demand for Unifi's product collapsed during the 1970s and 1980s. Indeed, the industry's production capacity plummeted during those two decades from 2.5 billion pounds to only 700 million pounds as the number of competitors shrank to only three by the late 1980s. Despite the shakeout, Unifi prospered. Through grit, determination, and savvy business strategies, Unifi's management team was able to grow the company's revenues from $21 million in 1971 to $300 million by 1988, and then to more than $1 billion a few years later. "Unifi is one of the great American success stories," observed analyst Michael Hopwood in the April 5, 1988 Financial World, noting that "through that entire bloodbath, it never posted a loss once."

Unifi's miraculous success is largely attributable to Allen Mebane, chairperson and founder of Unifi. Mebane was born in 1924 and raised in Greensboro, North Carolina. Although his father was an insurance salesman, Mebane's great-great-grandfather had owned a cotton mill, and Mebane himself was intrigued with the textile industry. His father sent him to Davidson College, but Mebane transferred to the Philadelphia College of Textiles and Science to learn more about the industry. Immediately after graduating in 1950, he went to work with Sale Knitting Company in Martinsville, Virginia.

Mebane started in manufacturing, working long hours and gaining valuable knowledge about the production side of the business. However, it did not take him long to realize that he was in the wrong place. "I was there at six o'clock in the morning, and I was there at eight or nine at night," Mebane recalled in the November 1993 Business North Carolina, "and the fellows selling the yarn would come in and they'd have a suit on and they'd have a car and could take people out to lunch and have an expense account, and I said, 'I'm doing the wrong thing here.'" Mebane left his job to serve in the army during the Korean War, and when he returned in 1954 he took a job as a sales trainee at American & Efird Inc., a fiber manufacturer.

Mebane soon left American & Efird for a better job. Between 1957 and 1964, he sold yarn for Burlington Industries. At Burlington, Mebane benefited from being able to meet and talk with the people who owned and ran the textile companies. By observing their different strategies and styles, he was able to determine which methods did and did not work. "The ones that were successful were the ones that were innovative, moving all the time," he noted in the Business North Carolina article. "The ones that weren't successful were the status-quo boys." By that time, the 40-year-old Mebane was eager to make his mark on the industry with his own textile operation.

He got his chance to run a textile company in 1964, when he was hired by Throwing Corporation of America to serve as the manufacturer's president. Confident in his ability to improve Throwing's performance, Mebane bought 20 percent of the company for $10,000. He was only at Throwing for a short time, though, before becoming a partner at Universal Textured Yarns. Mebane made his move to Universal at an opportune time. Universal was getting in on the ground floor of the burgeoning polyester texturing industry. Through the texturing process, producers like Universal were able to heat raw polyester fibers and manipulate them to generate different characteristics and qualities. Because the polyester could be converted into stronger fibers with the look and feel of natural materials, it was viewed as a wonder fabric. Not only was it was durable, inexpensive, and versatile, but it never had to be ironed.

Unifi Begins Operations 1971

As the popularity of textured polyester surged, Universal thrived. Mebane and his fellow top managers sold their shares in the company for $1 million in 1971. They immediately invested that money, along with a $6 million dollar bank loan, into their own operation--Unifi. The strategy employed by Mebane and his fellow managers during Unifi's start-up was one that they would continue to employ throughout the 1970s, 1980s, and into the mid-1990s: they invested in cutting edge manufacturing equipment that would give them a long-term cost and quality advantage over competitors. They first purchased 32 high-tech English machines, which were considered state-of-the-art in the early 1970s. As their competitors adopted similar technology in the mid-1970s, Unifi upped the ante. In 1975, the company invested heavily in new German-built equipment that could make better yarn at a faster rate.

Unifi prospered during the early and mid-1970s and quickly established itself as a low-cost provider of high-quality polyester yarns. Although Unifi's business strategy was impressive, the same could not be said for the popularity of polyester by the late 1970s. Dismissed by many retailers and consumers as a fad, polyester's appeal waned as markets renewed their desire for natural fibers such as cotton, silk, and wool. While polyester leisure suits and dresses, for example, had been a hit in the mid-1970s, they had become a fashion joke by the late 1970s and early 1980s. As a result, domestic polyester production plunged. Manufacturing overcapacity quashed price growth, and many producers were forced out of business.

In order to stay afloat, Mebane and company knew that they were either going to have to find new markets for their polyester or vastly increase their share of the market. Ultimately, they did both. At home, Unifi benefitted from its manufacturing prowess. Because its operations were so advanced, it was able to undercut its less efficient competitors and rapidly steal market share. Unifi management understood early that it was operating in a commodity business; if one of its competitors was forced to charge even a slightly higher price, Unifi knew that it was only a matter of time until that company folded. So, despite dying demand, Unifi continued to risk hefty capital investments in new production facilities and techniques. And it was able to keep its selling and administrative costs to an industry low of 3 percent throughout the late 1970s and 1980s. As its rivals struggled and failed to keep up, Unifi bought them out or simply took on their customers when they went out of business.

International in the 1980s

However, leadership in U.S. markets was not enough to keep Unifi profitable during the lean late 1970s and early 1980s. To buoy profits, Unifi aggressively pursued foreign business. Importantly, Unifi was among the first U.S. companies to begin selling to China when the People's Republic opened its doors to exports in 1980. The emerging, yet massive, Chinese market proved a boon for Unifi during the early 1980s. As demand soared, so did Unifi's overseas sales. At one point, Unifi trucks were literally blocking the road to the port as they waited to unload tons of commodity yarns for export to China. By 1983, Unifi was garnering about one-quarter of its $176 million in annual revenues from sales in China, and shipments to the country were topping one million pounds per week. Unfortunately, the China boom was short-lived. China and several other Asian countries, particularly Taiwan, soon built their own texturing facilities. Besides costs related to shipping, Asian producers also benefited from advantages like cheap labor and loose environmental regulations. Asian demand for U.S. polyester faded quickly after 1983, but Mebane and his fellow executives were undaunted. They mimicked their domestic strategy by purchasing the polyester operations of another major U.S. polyester supplier to China, Macfield Inc., in 1986. More importantly, Unifi continued to search for new international customers in Latin America, South America, Australia, Israel, Africa, and the Far East.

Vital to Unifi's international strategy was its 1980 entrance into Europe. After only two years of exporting to that region, Unifi had captured a healthy 6 percent share of the western European polyester market. However, Unifi's success in that region was hampered by European Economic Community charges that the company was dumping polyester into Europe at prices below cost. Unifi was eventually cleared of the allegations, and it elected to pursue a different strategy in that heavily protected market. In 1984, it purchased a former Courtaulds plant in Ireland and spent $50 million making it into one of the most efficient and technologically advanced facilities of its kind in the world. By the early 1990s, Unifi's Irish operations were supplying 20 percent of European demand (measured in sales volume). In 1984, Unifi also acquired the former ICI Fibers plant near Manchester, England.

As Unifi expanded globally, the U.S. polyester markets continued to deteriorate. Demand for filament poly (used to make polyester yarn) collapsed from 1.4 billion pounds in 1975 to 650 million in 1985. "The market went to hell in a handbasket," Mebane confirmed in the January 24, 1994 Fortune. However, Unifi continued to boost domestic market share during the mid- and late 1980s through its aggressive high-tech, low-cost operating strategy. In addition, Unifi diversified into nylon and began cultivating new markets for its polyester fibers. Most notably, Unifi was successful in marketing its polyester and nylon products to the automobile industry for the production of seat covers and vehicle interiors. The company also developed a large niche in the hosiery business. One of its largest customers, in fact, became Sara Lee, a leading supplier of women's hosiery.

By 1988, Unifi had become one of the largest manufacturers of polyester and nylon in the world. It was controlling about 40 percent of the U.S. market and had a strong toehold in Europe and several other export regions. Unifi's total revenues had swelled to $275 million in 1987, up from $248 million the previous year. Similarly, net income had grown steadily from $5.6 million in 1985, to $10.4 million in 1986, and then to $12 million during 1987. Moreover, Unifi achieved those gains as it steadily shrunk its long-term debt to $1 million by early 1988.

Unifi's long-term outlook seemed bright. Domestic demand for polyester seemed to have stabilized, and the company was making massive capital investments in cutting edge technology, including the purchase of new Japanese texturing equipment in 1988. Much of Unifi's success during the late 1980s was credited to William Kretzer, who had assumed the president's slot in 1985. Kretzer controlled day-to-day operations, while chairperson Mebane retained his strategic role.

Expanding in the 1990s

While Unifi's gains throughout the 1980s had wowed observers, the company experienced even greater expansion and profitability during the early 1990s. Unifi's success during that period was simply more evidence of Mebane's emphasis on long-term growth. For example, since deciding to go global in the late 1970s, Unifi's managers had determined that they would stick with the markets that they entered, even when performance in a particular region waned. By contrast, many of Unifi's competitors had simply bailed out of ailing markets, ceding their share to Unifi. As a result, Unifi was invariably positioned to take advantage of different recovering markets. "They are the first in the gate when the rebound starts," explained industry specialist Bill Dawson in the November 1993 issue of Business North Carolina.

Unifi's gains during the early 1990s were also the result of major acquisitions. In 1991, for example, Unifi acquired the remaining operations of Macfield, as well as a company called Vintage Yarns. Macfield had been Unifi's largest competitor, and the two mergers literally doubled Unifi's size. The buyouts gave Unifi a dominant presence in the U.S. nylon industry and extended its reach into profitable market niches like hosiery and vehicle interiors. By 1993, Unifi was employing 5,000 workers in its various manufacturing plants, increasing its work force while also working to make operations more efficient. For example, Unifi's major Pennsylvania facility generated about 3.2 million pounds of nylon per week in 1981 with about 1,300 employees. In 1993, the same plant was pumping out about twice as much material with only 1,000 workers.

Due largely to the mergers, Unifi's sales suddenly escalated past the $1 billion mark in 1992, and net income leapt to a record $63 million. Then, in 1993, Unifi merged again. This time it effectively absorbed Pioneer Yarn Mills, Pioneer Spinning, Edenton Cotton Mills, and Pioneer Cotton Mill--companies merged into a single entity, the Pioneer Corporations, and subsequently acquired by Unifi. Unifi formed a subsidiary for the division called Unifi Spun Yarns, Inc. The acquisition was important because it represented Unifi's move into the natural fibers industry; the former Pioneer companies' primary products were spun yarns made of cotton but also some cotton/synthetic blends. During 1994 (fiscal year ended June 26), Unifi achieved sales of $1.38 billion, about $76.5 million of which was netted as income.

Going into the mid-1990s, Unifi was controlling a full 70 percent of the U.S. polyester market and was selling about $500 million worth of nylon annually. It was serving 20 percent of demand in Europe and planned to boost that share to at least 30 percent by the late 1990s. As a result of the mergers, its work force had grown to 6,000 employees in 15 U.S. production facilities, one plant in Ireland, and sales offices in England, France, and Japan. The company spent nearly $400 million between 1991 and 1993 to ensure that its plants would continue to be among the most advanced in the world.

Furthermore, Unifi's three most influential executives--Mebane, Kretzer, and William J. Armfield, all of whom had been with the company since the early 1970s--were still at the helm, suggesting continued innovation and dominance of Unifi's key markets throughout the decade. "Its hard to bet against Unifi," said textile industry analyst Lorraine Miller in the Business North Carolina article, who added that "come hook or by crook, whether it's through acquisition or by adding on to their own facilities, they're going to be positioned to take market share."

Sales reached $1.6 billion in fiscal 1995. After selling off a small French factory, Unifi would spend the next couple of years acquiring and upgrading its facilities in the western hemisphere. In October 1995, the company agreed to buy nylon yarn texturing equipment from Glenn Raven Mills, Inc., another North Carolina textile firm.

Unifi acquired Spanco Yarns in 1997, adding four North Carolina plants. Two of these, in Graham and Lincolnton, were closed in 1998. The remaining covered yarns plants in Raeford and Sanford were phased out the next year as production shifted to a new facility in Madison, North Carolina.

In the spring of 1999, Unifi acquired a leading Brazilian producer of textured polyester, Fairway Poliester LTDA. The following year, Unifi acquired Intex Yarns Limited, a 200-person firm in Manchester, England. Renamed Unifi Dyed Yarns Limited, this became the basis of Unifi's European dyed yarns business.

After developing considerable expertise in factory automation, Unifi in 1999 formed a spin-off company to apply these skills to other textile firms and other industries. The new subsidiary, which employed 110 people, was called Unifi Technology Group LLC.

Other areas of research were aimed at keeping the company competitive through innovation. Unifi was researching ways to dye fabric using carbon dioxide, rather than water, as a medium. Envisioned benefits were water conservation and reduced pollution. The company was also studying the possibility of using carbon dioxide to replace solvents in dry cleaning.

Beyond 2000

Brian R. Parke was named CEO of Unifi in January 2000. Parke, a native of County Sligo, Ireland, had begun working for the company in 1985 as a manager at its Irish plant and had led the creation of Unifi do Brasil. Six months later, G. Allen Mebane announced he was stepping down as chairman, to be succeeded by Donald. F. Orr, a board member since 1988.

Parke took the helm at a difficult time. Asian yarn producers were flooding the market. Unifi lost some U.S.-based textile-producing clients when competition from abroad put them out of business; it was able to supply others who shifted their manufacturing to the Caribbean Basin. Asian imports were also hurting Unifi's business in Europe. The company would post losses in the 2001, 2002, and 2003 fiscal years.

Unifi sought to enter new markets through partnerships. In the United States, the company was forming a polyester filament yarn manufacturing alliance with DuPont. Another partnership extended Unifi's involvement in Asia. Unifi offered South Korean volume manufacturer Hankook Synthetics its expertise in producing premium polyester yarns in exchange for a share of profits.

Still another partnership, also announced in 2000, brought Unifi into the industrial yarn market. South African company SANS Fibres agreed to supply equipment for a plant in Madison, North Carlina, and market the fabric. SANS was also buying Solutia, Inc., an industrial yarn supplier in Greenwood, South Carolina.

More casual business dress codes had hurt Unifi's business as the top U.S. supplier of nylon yarn for pantyhose. Unifi addressed this trend by processing a fine yarn for use in "seamless" underwear, as found in Victoria's Secret's "Body by Victoria" undergarments, designed to complement tight-fitting fashions.

The company had more difficulty smoothing out its own bottom line, thanks to a slow economy, price competition from Asia, and the decline in professional dress. Durable goods such as automobiles and furniture--other industries that used Unifi's yarns--were also suffering. The company laid off 750 workers in 2001.

Unifi sold its technical fabrics division to an Israeli company, Avgol Nonwovens Industries, in May 2001. In the spring of the year, Unifi began leasing an automotive yarn processing plant from Glen Raven, signaling a shift into a more promising area than apparel.

The company boosted its Asian presence by establishing a sales office in Hong Kong. It also formed a joint venture with Tuntex (Thailand) PCL, which was partly owned by the Tuntex Group of Taiwan. At the end of 2003, Unifi was finalizing a partnership with a Chinese company, Kaiping Polyester Enterprises Group Company.

Research on new products continued. These included odor-fighting, anti-microbial yarn and hollow polyester fiber for insulating clothing. Unifi was also involved in texturing Cargill Dow's new NatureWorks fiber, which was made from corn. Another ecologically friendly Unifi yarn was made from recycled soda bottles.

Unifi was also embracing the art of branding. As the Greensboro News & Record reported, the company formed its first marketing department, which replaced such lackluster names as "single 70 34 semi-dull" with "Sparkle," "Sultra," and "Sorbtek." The latter was picked up by Nike and JC Penney as a wicking material for sport socks.

Unifi enlisted the aid of employees in a cost-cutting program called "Project Paragon," the aim of which was to discover inefficiencies throughout the production process. Ensuing consultations resulted in the company embracing a more entrepreneurial culture that entrusted employees with more front-line decisions. Layoffs continued in 2003, as Unifi eliminated several hundred jobs in North Carolina. The company ended the year with 4,500 employees.

Principal Subsidiaries: Unifi Asia Ltd. (Hong Kong); Unifi do Brasil; Unifi Dyed Yarns Limited (UK); Unifi GmbH (Germany); Unifi Italia, S.r.l.; Unifi International Services, Inc.; Unifi International Services Europe (France); Unifi Manufacturing, Inc.; Unifi Sales & Distribution, Inc.; Unifi Technical Fabrics, LLC; Unifi Technology Group, LLC; Unifi Textured Yarns Europe, Ltd. (Ireland); Unifi-SANS Technical Fiber, LLC.

Principal Divisions: Nylon; Polyester.

Principal Competitors: Dillon Yarn Company, Inc.; McMichael Mills, Inc.; Sapona Manufacturing Company, Inc.; Spectrum Dyed Yarns, Inc.; Worldtex, Inc.

Further Reading:

  • Bailey, David, "Getting His Irish Up: Faced with EC Protectionism, Unifi's Allen Mebane Decided the Way to Beat the Europeans Was to Join Them," Business North Carolina, November 1993, p. 26.
  • Barkley, Meredith, "Unifi Planning Job Cuts," News & Record (Greensboro, NC ), April 15, 2003, p. B7.
  • Bartholomew, Doug, "Automations Advance," Industry Week, Manufacturing 2020 Sec., May 15, 2000, p. 27.
  • Craver, Richard, "400 Jobs to Be Lost in Unifi Shake-Up," Winston-Salem Journal, April 17, 2003, p. A1.
  • Daniel, Fran, "Greensboro, NC , Textured Yarn Producer to Close Nylon Plant," Winston-Salem Journal, November 8, 2002.
  • "DuPont and Unifi Form Polyester Manufacturing Alliance," HFN, April 10, 2000, p. 23.
  • Heisler, Eric, "Unifi Forms Asian-Market Partnership," News & Record (Greensboro, NC), July 25, 2000, p. B8.
  • ------, "Unifi, South Africa Firm Plan Venture," News & Record (Greensboro, NC), September 19, 2000, p. B6.
  • ------, "Tracking Fashion's Moving Target; Unifi Takes Aim at the Panty Line," News & Record (Greensboro, NC ), October 8, 2000, p. E1.
  • ------, "Unifi Plans to Cut 590 Jobs in Triad," News & Record (Greensboro, NC), March 15, 2001.
  • ------, "Unifi Leases Yarn Plant," News & Record (Greensboro, NC), May 23, 2001, p. B8.
  • ------, "Corny Alternative to Polyester," News & Record (Greensboro, NC ), July 8, 2001, p. E1.
  • ------, "Unifi Develops Two New Yarns," News & Record (Greensboro, NC), August 22, 2001, p. B8.
  • ------, "Emphasis on Marketing Paying Off," News & Record (Greensboro, NC ), March 3, 2002, p. E1.
  • ------, "Unifi Close to Deal with Tuntex," News & Record (Greensboro, NC ), July 9, 2002, p. B8.
  • Kritzer, Jamie, "Unifi Seeks Expansion Incentives," News & Record (Greensboro, NC), September 30, 1998, p. B3.
  • Krouse, Peter, "Unifi, chief Ponder Separate Paths," News & Record (Greensboro, NC), January 13, 1999, p. B4.
  • ------, "Dying for a New Alternative," News & Record (Greensboro, NC), February 16, 1999, p. A1.
  • ------, "Yarn Maker Spins off Tech Venture," News & Record (Greensboro, NC), May 21, 1999, p. B8.
  • McAllister, Isaacs III, "Unifi Tops the Sales Yarn Market and Is Still Moving," Textile World, August 1993, p. 33.
  • McMillan, Alex Frew, "When Irish Eyes," Business North Carolina, April 1995, p. 40.
  • Patterson, Donald W., "Unifi's China Deal up in Air," News & Record (Greensboro, NC), December 30, 2003, p. B5.
  • Patterson, Donald W., and Scott Michels, "Blaming Economy, Unifi Announces More Layoffs," News & Record (Greensboro, NC), September 9, 2003, p. A1.
  • Serwer, Andrew S., "Business Is Bad? It's Time to Grow!," Fortune, January 24, 1994, p. 88.
  • Sykes, Jeffrey, "Unifi Workers Asked to Assist in Cutting Costs," Winston-Salem Journal, January 11, 2003, p. D1.
  • "Synthetics Prove to Be the Real Thing for Unifi," Business North Carolina, January 1988, p. 57.
  • Wrubel, Robert, "Unifi: The Next Textile Takeover," Financial World, April 5, 1988, p. 16.

Source: International Directory of Company Histories, Vol.62. St. James Press, 2004.