Leventhal Ltd. A Family Business with a Global Perspective

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Can a family business survive and prosper amid globalization and still retain its core values?

The answer is yes if the company has a relentless passion for delivering outstanding customer service. One such company is Leventhal Ltd., the venerated shirt and trouser manufacturer that has been family-owned since its inception in the 1920s. While actual ownership shifted from the Leventhals to the Shamdasanis in 1996, its close-knit family philosophy has remained intact, but it is by no means a folksy or even a protectionist company.

We view ourselves not just as an American company but as a business with a global perspective, says CEO Rajan Shamdasani.

With corporate headquarters in Fayetteville, N.C., and offices in Manhasset, N.Y., this mid-sized company that employs 200 has come a long way from its humble roots. Like many uniform businesses, Leventhal began as a small family enterprise. During the 1920s, Julius Leventhal and his brothers, Harry and Norman, worked as sales representatives for Goodrich Tire, selling tires into Central America. But business was anything but brisk.

In those days, there werent many tires sold in Central America because there werent many cars or roads to drive on, explains previous partner Steve Leventhal. After some time, they were given permission by Goodrich to sell and export other items.

The Leventhal brothers ended up selling more shirts than tires and in 1921 bought a shirt factory in Lykens, Pa. For a number of years, Julius Leventhal & Bros. sold dress shirts and Western shirts under the then unknown Conqueror brand (forever etched in uniform lore as the first shirt worn by UPS) to companies such as Sears Roebuck, Montgomery Ward and J.C. Penney.

During the 1930s, as the use and popularity of uniforms grew, the company shifted more and more into this industry. By the time World War II came along, they were 100 percent in the uniform business and during the war made shirts for the military as well as the civilian market.

In the 1950s, the company name was changed to reflect the new generation taking charge and thus became Leventhal Bros. & Co. Inc. As the company grew, it added pants production to its manufacturing capability and centered its focus on the traditional end of the industry: the law enforcement, transit, postal and security markets.

But times were changing. During the late 1980s, Leventhal faced unparalleled challenges brought about by industry consolidation, imports and offshore production. Indeed, the late 80s saw an unprecedented number of uniform shops either fold or be absorbed by larger corporate entities.

Many small manufacturers were squeezed during that era, and it became difficult to survive, says Leventhal. It was at this time that the company began production in the Caribbean while still maintaining its union factories in Lykens, Pa., and Elizabeth, N.J.

As the industry continued to restructure, Leventhal faced additional concerns. Says Leventhal, There were three brothers who founded the business. I along with my two cousins were second generation. During the 90s, it became increasingly difficult to sustain buy-out payments to the two retired, surviving founders while maintaining a flexible working capital position, so we began to look for buyers who would take the company in a new direction.

In 1996, Leventhal Bros. found that buyer in the form of another family the Shamdasanis. The company would continue to operate under the well-recognized Leventhal name, dropping the Brothers in favor of the term Limited. The new owners, three brothers and a sister, were charged with revitalizing the company and taking it into the new millennium. Danny Shamdasani became comptroller, George Shamdasani serves as secretary, and sister Kathy Sujanani became senior vice president. Rajan Shamdasani took over as chief executive officer.

The Shamdasani family quickly sized up its new company. We discovered early on that the costing structure was out of line with the competitive forces of the marketplace, and we immediately went to work to correct this says Rajan. In 2002, the family closed the Pennsylvania plant, transferring operations to a facility in Tennessee while retaining its presence in the Caribbean.

Moving to Tennessee helped reduce costs and improve efficiencies, says Danny.

By keeping a presence in the United States, Leventhal Ltd. also ensured that it would maintain its ability to meet the requirements of the heart of its business, the United States Postal Service, which requires union-made garments, and many of its law enforcement and government customers who, because of the Berry Amendment, must have their uniforms manufactured in the United States.

This, of course, begs the question: Can you still be profitable manufacturing in a union shop these days? To this, Rajan is emphatic. Yes, even today, it helps to have a union workforce, and you can still produce a quality product at a competitive price with union workers, he says.

Union-made garments definitely have a place in the industry, says Steve Leventhal. Having a union facility gives you a certain amount of stability.

Steve Bates, plant manager, says, Since purchasing the Tennessee plant, Leventhal now has the ability to produce and ship quality shirts in a very short timeframe. The employees went through an intense retraining effort in order to accomplish this task. They are hard workers and appreciate having a job close to home.

Most of the employees have been with Leventhal since the purchase of the plant in 2000. They have seen the plants transformation from a contracting facility to a modern, just-in-time operation that produces excellent quality shirts, Bates says. The employees are proud of their plant and know exactly what has been accomplished in a very short period.

Still, were it not for the Berry amendment, would anything be made here?

Some factories would still produce goods, but their numbers would be diminished, believes Leventhal. Yet he also believes that having at least some presence in the United States is an important component to a companys business plan. Most of the larger manufacturers Cintas, Aramark and others still have a domestic operation, he says. It helps to have this capability in case of a national emergency, and it is also important, from a manufacturing perspective, to have that flexibility.

It is flexibility and the ability to see the larger global picture that has contributed to the success of Leventhal under the Shamdasani family. After initial cost-cutting measures were introduced, the focus was placed on the type of product manufactured in an attempt to further optimize the companys cost structure. Greater emphasis was placed on Leventhals in-stock program, with most goods now shipped within 48 hours.

It took several years to devise a strategic plan that would work for the company, notes Rajan.

Part of that strategic plan involved making Leventhals customer service department the best in the industry. Cheryl York, Leventhals customer service manager says, By focusing on eliminating backorders and shipping orders complete, we have reduced both duplication of paperwork and inefficiencies in warehousing and distribution. We are now able to focus on providing the customer with the goods they need when they need them just-in-time delivery, todays buzzword, is a proactive approach.

Teresa Luaces is the production coordinator and has worked at Leventhal for more than 30 years. She says, Many changes have occurred over the years, and we have always taken advantage of new technologies to develop our products, analyze specifications and streamline production. All of our efforts are as a team, a family. We have only one motto: Customer Satisfaction.

Says Bob Blevins, national sales manager, Since our business approach makes the customer a part of the Leventhal family, it is exciting to be part of a successful team where everyone strives to give the service and quality that our industry demands.

Where Leventhal has seen its greatest growth on the product side has been in its partnership with its customers. George Shamdasani wont divulge specifics the industry still operates under a cloak of secrecy but he is insistent on a time-tested credo: listen to the customer and work with them to give them what they want.

What public safety customers want nowadays is not so different from others in the area of clothing; functionality and comfort reign supreme. Poly/cotton fabrics are still a number one seller these days, as are fabrics that provide stretch. We are looking to introduce the right blend of Lycra-incorporated fabrics into our line, says Rajan.

And while price is on every customers mind, it is not the most important consideration. Above all, Leventhal customers are looking for quality. We are price-conscious but value-driven. Our goal is to deliver a quality product at the best value, says Kathy.

This philosophy has, in part, driven the companys success in recent years, but it is by no means the sole factor. Unlike many in the uniform industry, the Shamdasanis have business interests in other areas, namely the real estate market.

This diversity has given us the capital resources to grow all of the businesses in our portfolio, Rajan says. Our success in real estate development has fed the success of Leventhal by giving us the ability to develop new products and invest in new machinery.

So, too, has Leventhals willingness to better position itself in the global marketplace. The company is in the process of obtaining contract facilities in Asia, a move that will further enhance its bottom line. As product development continues its shift from the domestic arena to Asian markets, Rajan believes it is the companies least resistant to change and those willing to innovate that will flourish.

You have to be involved in the development of products from other countries, and to do so you must travel to those countries. You must visit trade shows, visit foreign offices and have their representatives visit you here, he says. Otherwise, you will be left behind.

Leventhal products are strictly distributed through a network of nationwide dealers. To learn more, call 800-847-4095 or visit them on the web www.leventhalltd.com.

Above story first appeared in MADE TO MEASURE Magazine, Fall & Winter 2006 issue. All rights reserved. Photos appear by special permission.
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