Merrow & Superior: The Inside Scoop Behind One of the Industry's Most Talked About Acquisitions

By SPESA

Behind the Seams recently helped share the news of Merrow Group acquiring the assets and business operations of Superior Sewing Machine & Supply LLC. We connected with Charlie Merrow, CEO at the Merrow Group Companies, and Lonny Schwartz, the prior owner of Superior, to discuss this exciting news and learn more about its impact on the sewn products industry.

Let’s start with how all of this came about. Lonny - What made you decide to sell Superior Sewing Machine & Supply? And how did you choose Merrow?

Lonny Schwartz: My decision to sell the assets and business operations of Superior started with my need to move Superior out of NYC before its lease expired at the end of 2021. Back in late 2018, I knew we would need to move in 2021 because the NYC building my wife’s family owned since the early 1970s and which served as Superior’s main facility was sold.

As I thought about moving the company, it became more and more evident that with no next generation family members to hand over the reins, my staff, my suppliers, and my customers would be better served by me finding the right home for Superior for the next generation. Making sure that most of my team was retained and that the buyer had no major conflicts with my customers or my suppliers was of paramount importance to me and my wife.

While there were several viable buyers, the youth, energy, intelligence, commitment to the industry, track record of growing companies, and vision of Charlie and his brother Owen were what convinced me that they were truly the best fit.

Charlie - The Merrow Group Companies include both Merrow Sewing Machine Company and Merrow Manufacturing. How do these two different entities work together? And how does Superior fit in?

Charlie Merrow: Merrow is 183 years old, and since 2004 Merrow has grown into four distinct groups, with an emphasis on investment in manufacturing and manufacturing-related business. Our core business has always been the development and manufacture of Merrow Sewing Machines and parts. With distribution in 87 countries and a sophisticated technology backbone, we've built new businesses to compliment strengths in our core business.

Merrow is also:

1. One of the largest technical soft-good manufacturers in the United States;

2. U.S.-based sustainable medical product manufacturing & supply;

3. Circular and flat knit goods manufacturing in the United States;

4. Wholesale parts & equipment distribution.

The opportunity to work with the Superior team and combine the strengths of each operation is remarkable. Superior is the best company in the business supporting wholesale distribution of parts and equipment for the sewn products industry in North and South America. Customer service and a deep stocking position in more than 100,000 parts make it a valuable strategic partner for distribution in the western hemisphere. The only change we will make is to rehome Superior to the 300,000 sq. ft Merrow Mill in Fall River, Massachusetts.

What changes can your customers expect to experience from the acquisition?

LS: Really a question for Charlie, but I only see good things. Charlie and Owen plan to provide the same quality service and product that Superior has always offered to its customers and to maintain and build upon our supplier relationships. But that is not where Charlie’s and Owen’s vision ends. I’ll let Charlie tell you about that…

CM: Superior's business model will not change and our commitment to be 100% a wholesale supplier is central to our mission.

Superior will never compete with its dealer network. As the industry evolves, our purpose remains to provide same-day access to the products needed by our customers in North and South America.

As I mentioned, warehousing and operations are moving to Fall River. Almost the entire Superior team is coming onboard, and the Miami and Los Angeles offices will grow. Over time, customers will have access to more products and some services, but for the time being Superior will continue to do what it does best: immediate order fulfilment for parts and supplies.

Our goal is to help our dealers grow their business and ultimately make their customers (factories) more competitive. We will do this by supplying distribution with products and technology that improve their customers’ efficiency.

Lonny - You have noted that handing over the reins to the Merrow team feels, in some ways, like passing Superior down to a new generation. Could you please expand on that? Why is it important?

LS: I truly believe and have for a long time that, in the famous words of Kenny Rogers, “you've got to know when to hold 'em, know when to fold 'em.”

For me, transitioning the business to a younger generation when I wasn’t in a position where I had to sell for health or other reasons and still not ancient meant I would still be around to provide advice when needed and be supportive to Charlie and Owen and to Superior’s customers and suppliers in many other ways.

Charlie - You and your brother Owen (Managing Partner of The Merrow Group Companies) are the seventh generation of your family to manage this business. That is an incredible legacy. How do you balance maintaining the history of the company while also moving it forward with new ideas and innovation?

CM: Every day, we walk by a large picture of the Merrow factory in Connecticut, drawn in 1905. And any time I have the opportunity, I will tell people walking by how much we owe to our history, but our success and failures TODAY are ours alone. Our history gives us confidence, responsibility, and purpose; but we create our mission.

Merrow's history from 1838 is one of entrepreneurship. From a general store to a gunpowder factory to a knitting mill and then machine manufacturing, our history is one of change.

Owen and I also come by entrepreneurship honestly: on one side of the family, we have the great innovator JB Merrow and on the other, (our great grandmother) is Lane Bryant!

What changes do you expect to see in the sewn products industry in the next 5, 10, 20 years?

LS: Wow! I am not sure any of us can with any real certainty project out to 20 years and probably not even 10 years. As we have seen in 2020, there are just so many things that can happen to change the world. However, I believe that over the next 5 years the sewn products industry in the Americas will see a resurgence of activity. More and more we have recognized that putting all of our eggs in one or two far away baskets is risky. Not only will more medical-related products be produced closer to home from materials manufactured closer to home, but other products will as well.

I see only growth in the Americas in every sector of the sewn products industry over the next 5 years.

CM: I expect to see investment in efficient production centers closer to markets served. We've moved past the largest displacement of work from wage inequality, and we'll steadily work back to more of an East/West equilibrium. Technology and production efficiency will reward industries that invest in the manufacture of sustainable products, and I expect to see innovation in both product and production techniques that emphasize sustainable practices

This month, Behind the Seams is focusing on supply chains. Charlie - As a U.S. manufacturer, what are the greatest challenges facing your supply chain?

CM: Forecasting. The value of a North American supply chain is clear, and in 2021 for national security and commercial reasons more people understand why. Nonetheless, forecasting remains one of the most fundamental problems facing our industry, and THE most significant impediment to the attraction of capital investment in manufacturing. A healthy supply chain forecasts, predicts demand and costing. Investment is made around these forecasts. Presently it is hard (to say the least) to forecast demand, and this is impacting every aspect of the supply chain.

Lonny - What are the most significant supply chain challenges for machine distributors? How has Superior approached these challenges in the past?

LS: My comments above about our industry dovetail nicely into this question. Supply chains that depend on components coming from far away are currently unbelievably stressed. I do not see that changing soon.

Superior has always believed in keeping large stocks to support its customers and Charlie and Owen know only too well as machine builders how important this is. Because for a very long time we have kept 4 to 12 months’ supply on hand of almost all of our imported stock parts, we have been more fortunate than most during the recent supply squeeze. However, we have not been unscathed. And it is not only raw material shortages and manufacturing delay, the shipping times and freight costs have also increased dramatically. We have most definitely been affected, but feel fortunate that we were in the position we were in.

I do believe that, going forward, larger sewn products manufacturers will significantly reduce their dependence on ordering for just-in-time delivery of the critical parts and supplies they need and will begin carrying some reserve inventories so that supply chain disruptions do not cause their production to come to a screeching halt.

One big issue over the next few years for the automotive sector especially will be the chip shortage. Auto demand should only go up as people choose to permanently relocate away from big cities, but meeting demand may be difficult if the chips are down (pun intended).

Moving from challenges to opportunities, Covid-19 has revitalized interest in U.S. manufacturing and provided new opportunities for companies that were able to pivot their production — as Merrow did with manufacturing personal protective equipment (PPE). In your opinion, how can sewn product companies take advantage of these opportunities?

CM: Innovation. There will be little reward if the industry expects to participate in scaled production of PPE without improvements to our production technologies and practices.

LS: I believe our industry has already moved very decisively and very quickly. As I said above, reshoring and near-shoring are going to grow in the next few years. Among the biggest challenges will be finding people to do the sewing and fix the machinery. Automation will play a big role in this, but our industry still needs trained people to sew and repair. Charlie and Owen are already very involved in helping develop programs to meet this need.

Also, what do you believe needs to happen — in terms of investment, government policy, industry support, etc. — for U.S. manufacturing to grow?

LS: First, I think that all critical medical sewn products production needs to be required to be Made in the USA. Additionally, government support for sewing operator and mechanics training would really help. I know I am an outlier here to many of my brethren in our industry, but I firmly believe that President Biden’s infrastructure bill is really important for our country and for our industry. Properly managed it could truly help our industry (and quoting an old Barney’s commercial from years ago… they’ll all need clothes!).

Charlie - Merrow obviously has a lot on its plate right now. Do you have any other new initiatives coming up that you can share with our readers? What is next for Merrow and Superior?

CM: In 2021, Merrow will announce a new USA manufacturing program and brand building state-of-the-art knit products. I look forward to sharing more about this when we launch in July.

Our manufacturing and warehousing facilities will all be running on solar power by the end of the year. Merrow’s commitment to climate action will establish all divisions of the company as leaders in environmental reform and green manufacturing in the United States.

Superior’s offices in Miami and Los Angeles will be growing, with an expectation that 90% of orders will ship the same day. We anticipate the Superior team expanding their leadership in wholesale distribution with new lines, additional resources for customer service, and, most importantly, the remarkable support from our customers.

One thing we will be doing more of is training and product programming in Fall River: Collaborating with our partners and customers to educate, train, and support products in our facility. We have had great success with technical trainings over the past decade, and our hope is to expand that to many of Superior’s brand partners and our customers.

Finally, our focus on growth will be led by investment in customer service. We understand how important it is to not only ship a product quickly, but also to answer technical questions (very quickly). In many respects we are all part of a team, and to be successful we will invest both in inventory and the knowledge that will make it possible to offer the fastest and most efficient support for the sewn products industry.

Finally, Lonny - What is next for you? Are you going to send us a postcard from an exotic beach somewhere? Or can we still count on you to choose the wine for the next SPESA happy hour?

LS: SPESA is in my blood and so is the industry as a whole. My plan is to be around for a long time. Just not so sure Ed is going to let me choose the wine!

We’d like to thank Charlie and Lonny for taking the time to share their thoughts and experience with our readers, and the Merrow and Superior teams for their dedication to advancing the sewn products industry.

Learn more about Superior Sewing Machine & Supply at www.supsew.com.

Learn more about Merrow Sewing Machine Company at www.merrow.com.