Chuck Roast store and factory closing

Henderson says trade policies lead to the downfall of small American companies like his

As of mid-September, Chuck Roast Equipment, a locally-based outdoor apparel company that has long been part of the Mount Washington Valley's social fabric, is closing a case of a local company being fleeced to extinction by America's trade policies with foreign countries.Chuck Henderson, 57, of North Conway, who founded Chuck Roast Equipment when he was still in high school in 1969 and then watched it grow through his college years and thereafter, confirmed this week that he is closing both his retail store at the L.L. Bean complex and his factory on Odell Hill Road in Conway.Approximately 14 employees will be affected at both the store and the factory. Some have been with the company for 20 years or more.That total of 14 is down from a high of 65 in the late 1970s and early 1980s when Chuck Roast had accounts to provide backpacks for L.L. Bean and Eastern Mountain Sports.I've had dedicated and very talented, hard-working employees all through the years, and I want to thank them and my customers for all of their loyal support, said Henderson Tuesday.The company is busy filling U.S. Forest Service firefighting orders for fire-resistant Nomex fleece jackets by the Oct. 1 fiscal deadline and is also holding sales at its retail store.You could sum it up in a one-word story if you wanted China but there's more to it, said the Kennett High and University of New Hampshire graduate.Cheaper labor overseas has resulted in dramatically less expensive products and an unequal playing field for American manufacturers such as Chuck Roast, which started out making gaiters during the cross-country ski boom of the mid-1970s. The product line evolved into backpacks for Eastern Mountain Sports and L.L. Bean in the late 1970s, then later became a line of Polar Fleece jackets, luggage bags and, beginning in 1979, Polar Fleece outdoor apparel and fleece blankets made from the more refined Polartec, a material that did not pill out into little balls of fiber. Chuck Roast was one of the first companies to purchase the Polar Fleece, the lightweight, warm and fast-drying polyester material manufactured by Malden Mills of Lawrence, Mass.When we started making gaiters and day packs, we were at the right place at the right time and enjoyed solid growth until those products began to be outsourced from China," said Henderson. "We were the second company in the country to begin making clothing from Polar Fleece, and again it was right place at the right time."But times have changed, due to an international market and trade agreements that enable foreign-made goods from China and Jordan and other countries to flood the market.This is perfect storm of a number of global factors and other things, in addition to our economy, said Henderson. He said Dec. 31, 2004 brought the end of the General Agreement on Tariffs and Trade quota system that placed limits on apparel imports. In the first four months of 2005, imports from China went up 50 percent. That meant that when you bought products of a certain classification anywhere in the world there was a quota of how many to buy, and once you met that, you could not buy any more. It then got phased out. They phased it out. They pay 11 cents per hour and we pay quite a bit more than that, said Henderson.Originally, Chuck Roast could fight the battle because the company used Polartec which was recognized as being of higher quality than the fleece used by the Chinese. A subsequent trade deal between the United States and Jordan was another in nail in the coffin. Once the Chinese began producing higher quality fleece, including authentic Polartec, that trade deal allowed them to ship it to Jordan, which in turn was able to create duty free goods that were then shipped to the United States at much reduced prices."Because we have so few friends in the Middle East, a trade deal like this is a thank you to Jordan, but devastating for Chuck Roast," said Henderson. He said the agreement was made because of the poor relations the United States has with the rest of the Middle East. It shows how policies addressing globalization can impact a small business like mine here in the valley. If you looked in the L.L. Bean catalog over the past several years, you would see how their jacket prices dropped from $49.95 by $10 each year to $19.95 for some styles so, if you are one of the big boys, you can take advantage of it, because it is only open to lots of 10,000 units per style. Well, that's great if you are a big company, said Henderson. They are getting jackets for $5 that cost me $25 to produce, which means they are beating me not by 10 percent but by 80 percent."An American company such as Chuck Roast Equipment Inc. that pays higher wages and health insurance finds it harder and harder to compete and Henderson is throwing in not just the towel, but the fleece blanket as well.Polartec blankets that Chuck Roast once sold for $90, for example, now sell for $30, due to the fact that consumers can pay the same price for similar blankets made in China.Its interesting in that I have gone through this battle for years knowing that the chance for a positive outcome was slim. But this is a case where you cannot get beyond the facts. Faith is defined as believing in something that cannot be proved, and I always had faith that something good would emerge that would save us. There have been dozens of times when we have been at the verge. But the time has come, said Henderson.He indicated that he will be exploring all of his options, including bankruptcy protection. I think it's probably going to get pretty ugly, he said, referring to expected legal battles with creditors.He said his landlord at the outlet center is his biggest creditor, and that he himself is the second largest creditor. But there are others, and the success of the store closing sale will help pay some bills.The outlet center where Chuck Roast is located will lose its anchor retailer, L.L. Bean of Freeport, Maine, next month when the L.L. Bean store moves to the new Settlers' Crossing complex a few miles south down Route 16.That transition played a factor in Henderson's decision to close his shop.People have been coming into the store to tell their Chuck Roast stories, and how much they love our stuff. They say they come to Chuck Roast, not L.L. Bean which is nice to hear. But when we heard that they were moving down the street a year ago, we knew this would impact us, said Henderson.He said the L.L. Bean store manager was thoughtful enough to stop by when the news broke to express her concern about how this would affect us. Henderson said he has had talks with Robert Barsamian of Settlers' Green Management, but that he was not in a financial position to move to Settlers' Crossing or any of Barsamian's other properties due to the rents charged and to his revenue problems.Henderson originally based his company in a corner of jeweler Brian Smith's North Country Fair Jewelers in what is now the Mountain Dawg Cafe in North Conway. He set up shop in his Odell Hill Road factory in 1973.He expanded the factory five times over the next several years. His first independent store location was at the IGA marketplace in Conway, followed by moves to the McSherry's Orchard Cider Mill building block on Route 16 in Conway, then the Timberland factory outlet complex in North Conway next to the L.L. Bean complex. The final move was to the same complex as L..L. Bean.Henderson's career has been defined by helping out social causes, sharing an entrepreneurial commitment to social causes on a similar but smaller scale as Ben & Jerry's Ice Cream and Stonyfield Yogurt. He says his sense of community giving can be attributed to the example set by his mother, Ruth Henderson, who was active in the local Red Cross.A highlight for Henderson was working with Aaron Feuerstein, former chairman of Malden Mills. That company twice went bankrupt following a fire in 1995, and is now controlled by another company.Feuerstein gained national renown for his decision to keep workers on the payroll after the fire. Feuerstein kept the displaced workers on his payroll and continued to pay their health insurance. That created a lot of goodwill toward Malden Mills and to Henderson's company as well, as people came to the store and asked if his apparel was made using Malden Mills Polartec.One of the shining moments for Henderson's company, he said, was helping out war refugees in the cold of Kosovo during the Bosnian War, when Malden Mills donated the material and his stitchers worked on their own time to create kids Polartec pullovers to be shipped into the war zone.Supporting local charitable causes has also been a rewarding experience for Henderson, who has been active in the School to Career program, the Carbon Coalition, the Mount Washington Valley Economic Council, the Believe in Books Foundation and the Polar Express.He provided fleece products for the 1991 World Nordic Disabled Championships, held at the Jackson Ski Touring Center. He was also always involved in such other local events as the Attitash Equine Festival, Winterfest and more.I liked being able to do those things, both here and for those kinds of events when they occurred. I liked running my own company. I liked the challenges and the rewards. I could have sold the company when times were good, but I absolutely liked my job too much. It was a good business at the time that Polar Fleece and Polartec first came out, and before things changed internationally. But times change, said Henderson. He said his company tried to be nimble in adapting to the marketplace over the years, most recently by selling jackets made from recycled polymer fleece. It's every bit as good as those made from virginpetro chemicals, said Henderson, who has long been passionate about green technology.We did change and adapt over the years. The problem is that as the market demanded more and more technical features, all those were very labor intensive so the only way we could keep producing products was to stay simple and minimize the amount of labor. Again, that is where the leveraging of cheap labor costs comes in fancy zippers and pocket snap flaps require fancier stitching, which drives up labor costs and we pay an hourly range that is 100 times what people get in China and we offer health insurance It eats a hole in you. It's kind of a gruesome squeeze, he said.One more element of the perfect storm was government contracting, which Henderson said his company had pursued with mixed results. This spring, we bid on four contracts which were awarded at prices below our cost, and one was awarded at the cost of the Polartec fabric. Since there is only one source and one price for the fabric, it indicates a level of desperation among small contractors trying to survive, he said.Active in grassroots Democratic politics and the Carbon Coalition, he is hoping to land a job working in the green technology and energy independence movement.To devote more than three decades of his life to an endeavor has been satisfying and it is sad to see another phase of local business end, Henderson says.I've been at this my whole life, so it's definitely emotional but I have to keep moving, he said.Ever with an eye toward business after all these years, he added, If people really want to help us out, then I would urge them all to come on down to take advantage of our closing sale and do their Christmas shopping now. We know we're in for a cold winter, so this is a good time to do that shopping and get some of the 20 to 30 percent savings at our retail store and conserve some energy, said Henderson.For more information, call the Chuck Roast Equipment store at 356-5589.