“You can tell people it’s nylon, but they won’t believe you.”
On this day back in 1966, Britain’s manufacturing giant ICI hit the headlines when they announced massive job cuts at its nylon-fibre producing factories. Their reasons: ‘economic conditions’.
Yes, inflation was high, and the Government were forced to devalue the pound and tighten the credit squeeze by raising borrowing rates and taxes…
…But…here’s a Scale Lesson for us all, that even the biggest of players can fall foul of:
- There was wide-spread speculation that ICI had misread the economy and gone ahead with big capital investment in new machinery – aimed at cutting production costs long term – when all the signs were profits were about to be hit in the short term.
- ICI misread the market: only a year before, the company had said it wanted to take on 2,200 extra staff to cope with an expected growth in demand for nylon. Yet Nylon was becoming less fashionable and less popular thanks to its shiny, non-absorbent and uncomfortable nature.
- ICI misread its position; ICI were still making more nylon than all the other British producers put together, but they were facing growing competition from smaller companies, as well as from new manmade fibres coming onto the market with a range of uses from clothing to industry.
Here’s the thing…
Whilst it took many years, ICI finally did take decisive action and in 1983 re-designed and launched the fibre as ‘Tactel’ to become more palatable to fashion designers.
People didn’t know what ‘Tactel’ was, nor did they understand its benefits. But it soon become an integral part of vocabulary for consumers and fashion designers (very much like the ‘intel’ brand). One designer was quoted as saying:
“Tactel has an incredibly soft, luxurious feel rather like silk but it’s cheaper. You can tell people it’s nylon, but they won’t believe you.”
This ‘new Nylon’ became so successful that in 1992 American giant DuPont bought out the ICI Fibres business. What a turnaround!