Sunday, October 17, 2010

Crofut & Knapp, Innovators

So how does a company go from one man working out of a cow shed to the second largest hat company in America? (They did eventually become the largest, but that wasn’t until after 1970 and the closure of the Stetson factory in Philadelphia.)

The short, and perhaps overly obvious, answer is through a lot of hard work and dedication. Success becomes much more likely to happen when you throw innovation into the mix, and this is the case with Crofut & Knapp. Add in the talent of promoting your employees into positions where they can do the most for the company, and you have a recipe for success. Two key components went hand in hand with their success. First, they offered a high-quality product at premium prices. While the premium price created a hurdle to overcome with consumers, the second component dealt very well with that hurdle: marketing and advertising. In this, Crofut & Knapp were innovators, setting a standard of excellence that left the other hat companies playing catch-up.

The hatting industry underwent a monumental change in the first half of the nineteenth century due to the transportation revolution and the industrial revolution, just as most American industries did. The hat factory evolved from a small, locally-owned shop into a much larger facility employing ever greater numbers of people.

Prior to the industrial revolution, hat manufacturers worked out of small shops and sold their hats locally. The shop was run by a single craftsman, or master, who might employ up to perhaps as many as four apprentices. Each craftsman performed all of the required steps to make a hat from a handful of fur to a finished, wearable product. Each small shop served a town, or perhaps a county, but their market did not reach much beyond that.

With the advent of the industrial and transportation revolutions, machinery aided in the manufacturing process and the concept of division of labor meant that workers began specializing in different parts of the production process. Some factories only performed one part of the process, such as the forming of felt bodies, and left the finishing to other companies. Distribution of the hats was left up to jobbers in the cities. Some companies did keep everything in house. In any case, hat production was increased, hat prices became more affordable, and more people could afford to buy better quality hats.

Concentration in the hat industry meant that regional centers of hatting grew in importance, such as Orange, New Jersey, and Danbury, Connecticut, both of which saw larger factories employing fifty or more workers as early as 1810. By 1860, the modern hat industry was in full swing, with many steps in production utilizing machinery, but a large part of the work still involved skilled handiwork. Curled brims, for instance, became popular on high silk hats in the 1840s, and these same curls, such as the D’Orsay, would be translated over to stiff hats (Derbies). The brim curler was a skilled tradesman who performed his work by hand with hot irons, not mechanization.

Into this new era of mechanization came James H. Knapp, who started out exactly as hatters had for centuries, as a one-man operation. With the partnership of Andrew J. Crofut, they launched the Derby as their chief product, and began the long road to success. Much of the first fifty years of Crofut & Knapp is shrouded in the mists of time, as I have uncovered very little from their early years. Advertising was typically done in local papers by the retailers, usually consisting of text and very few, if any, images of the product. The text would extol the virtues of the product, addressing the needs of the individual being targeted in the ad.

It was not until well into the twentieth century that companies would change the nature of advertising, focusing not on customers’ needs, as had previously been the case, but on their wants and desires instead. Advertising would move away from the traditional textual analysis of the properties of the product into a much more ambiguous and visual form, designed to entice consumers to purchase the product merely because they desired it. Croft & Knapp led the way among hat manufacturers in this advertising makeover and perhaps among most industries as a whole.

This change would probably not have occurred but for the death of Andrew J. Crofut in 1893. With the partnership thus dissolved, the company reorganized as a corporation to ensure its stability. The stockholders of the new Crofut & Knapp were co-founder James H. Knapp, his son Philip N. Knapp, William W. Lester, Gilbert E. Bogert, and John Cavanagh. With the exception of Gilbert E. Bogert, on whom I have no information, the rest of the stockholders and executive board had risen with the ranks of the company, most starting as young boys doing the most menial tasks before rising to their positions of prominence because of their innate abilities to innovate for the company. The first decade of the twentieth century was a pivotal year for the company, a year that would see several different innovations in marketing that would propel the company into a position of prominence within the industry.

Advertising at the national level was the first step for the company to take. In 1903, Crofut & Knapp was among the first hat companies to advertise on a national level (they claim to have been the first, a claim that I haven’t fully substantiated). In 1903 they took out their first ads in The Saturday Evening Post, which would be followed by ads in McClure’s and Collier’s.

I’ve posted this ad before, but it’s an example of an ad in McClure’s from 1906. Notice that C&K reminds the reader that they were the first to manufacture Derbies in America, a slogan that they would continually use in their advertisements over the next ten-plus years.

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Another McClure's ad, this time from 1907:

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Instead of the retailers, such as department stores, advertising various companies’ brand to their customers, C&K took the lead as manufacturer advertising directly to their customers. Over the next few years, they would also make the next logical step by cutting out the middlemen, the jobbers, and distribute their products directly to the retailer, and directly to their customers through the establishment of their own shops.

Crofut & Knapp faced several problems, chief among them that they mainly manufactured a single product, the Derby. Production was seasonal at best, and resting on the laurels of one product was not necessarily good for business. By the turn of the century, there was an ingrained opposition to Derbies costing more than five dollars, a psychological barrier that consumers seemed loathe to move beyond. Whether unable to produce the high-quality product they wanted for five dollars due to rising costs, or just unwilling to make any further cost concession, Crofut & Knapp boldly decided to convince customers that a Derby costing six dollars was worth the extra money. Surely, if consumers were willing to pay more for soft felt hats and straw hats, they would be willing to spend more on a stiff hat. Considering this was Crofut & Knapp’s only product, the move was almost necessary for corporate survival. There was a serious downturn in sales of Derbies by 1906, and this prompted John Cavanagh, general manager for the company, to suggest reintroducing the soft hat into their lineup. Soft hats had enjoyed a heyday in the 1850s and 1860s, followed by a resurgence in the 1880s and early 1890s. Anticipating that the public was ready for another go at the soft felt hat, the company expanded production in 1907 by acquiring another factory specifically for that purpose. Cavanagh’s prescience paid off, as sales of soft hats took off, and launched Crofut & Knapp into a new era of prosperity and glory.

Another psychological barrier among consumers was the idea that a man did not need more than one hat. A Derby, for instance, could carry one through all four seasons, given a lightweight hat. Two hats was about the limit to which men were willing to go, with a Derby for three seasons, and a straw hat for summer. A well-to-do man might also have a high hat for formal occasions, but for the general public, one or two would suffice. Crofut & Knapp also worked diligently over the decades to break the public of this notion as they expanded their product lines into first soft felt hats in 1906, straw hats in 1908, silk hats in 1917, and caps and cloth hats in 1919.

In 1906, C&K launched their new product lines, Knapp-Felt, their standard quality hats, and the Knapp-Felt De Luxe, their highest quality. Knapp-Felt hats were competitively priced at $4.00, well under the five dollar limit, but the De Luxe hats were priced at $6.00, quite a jump. I’ve yet to ascertain the difference between the two grades of hats, though I suspect the biggest one is that the higher-quality, and thus, more expensive fur went into the De Luxe grade. Regardless of the perceived difference in quality, the De Luxe line enabled Crofut & Knapp to smash the five dollar barrier for Derbies, though the market for Derbies was only to enjoy another couple of decades of life.

Whatever life held in store for the company, they were going to have to set precedents in order to continue their growth. To that end, in 1906, Crofut & Knapp took a big leap forward in national advertising for the hat industry by taking out a two-page color ad in The Saturday Evening Post, which featured a painting by the artist Edward Penfield, better known for his work at Harper’s. This type of advertising, featuring bold colors with lesser amounts of textual information, would become the norm by the 1920s, but was in its infancy in 1906, and Crofut & Knapp was at the vanguard. Two years later, the Penfield ad was rerun in the Post. Here is the 1908 two-page version:

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Another example, single page this time, of the Penfield, also from 1908:

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The hat on the far right with swept-up brim on one side became a very popular style among young men, the very market that Crofut & Knapp was targeting. They named the style “The Penfield” in his honor. C&K would continue to employ the best artists and graphic designers in the country in their national advertising. Though many ad campaigns would also use photography, it is their artwork campaigns for which they are best remembered. Their shining achievement came in 1929 and 1930 with a year-long series of “Hat of the Month” ads in The Saturday Evening Post, featuring the work of Percy Edward Anderson. The ads are stark in their simplicity, with only the visage of a young man wearing a hat in a vivid, colorful, and very atmospheric painting. The name of the hat model and the C&K name are essentially the only text shown. Here are some examples:

Rudswick

Cavendish

Lincoln

Much of the credit for the Crofut & Knapp advertising innovations should go to Robert A. Holmes, the manager for Sales and Advertising. Holmes had started his career as a salesman for Crofut & Knapp in the late nineteenth century. In 1895, his territory included all of the Southern states, but was shortly enlarged to include everything from Minnesota to Louisiana, and as far west as Omaha. At that point, he was the only salesman outside of New York City and New England. From 1900 to 1904 he was in charge of the Boston office before being promoted to the company manager for all sales and advertising.

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It is Holmes’ voice one hears when reading The Hatman, the house organ for Crofut & Knapp, which he liked to call a “scrappy little magazine.” The Hatman served as an important link between the company and their retailers, or associates, as they were called, offering examples of artwork they could use in their local advertising, images of the latest hat styles, news from the company, and humorous tales of the hat business, along with much poetry and wit.

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Innovations in advertising paved the way for Crofut & Knapp to take its prominent place within the hat industry, but it is not the only innovation for which they are known. Offering their hats directly to retailers was certainly a key component of their success, as it kept the discounts on the hats down, and the network of relationships they built up between the sales force and their retail associates was likened to that of a familial relationship by all involved. These relationships would serve them well over the next few decades. One of the most impressive innovations came in 1908, with the creation of a new brand for the company, and the opening of a retail store in New York City to sell the hats directly to the public. That brand, Dobbs, would eventually eclipse that of Knapp-Felt, and finally give C&K a brand with name recognition on par with that of the mighty behemoth, Stetson.

But that’s a tale for another day.