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It’s a third-generation, family-owned business started in 1931, at a time when selling “off-quality seconds” yarn and closeouts was a hugely successful line of business.
No longer a supplier of closeouts, Providence Yarn Co.’s core business now focuses on supplying quality fibers to manufacturers with value-added services, such as same-day shipping and attentive customer service.
It was a business started by Providence Yarn Co. President Terry Schuster’s grandfather, father and uncles. “In those [initial] years, Providence Yarn had relationships with domestic yarn producers, whereby they sold their off-grade yarn to us, and Providence Yarn became known as the supplier of this yarn to manufacturers around the country,” Schuster explained.
Then: a downturn. As years passed and the number of domestic yarn producers diminished, so did the opportunities for Providence Yarn.
In 2005, the company began steps to bring back what was once a bustling business. The family brought in a consultant and developed a five-year strategic plan. These steps resulted in a reinvention, and sales that have more than doubled over the last five years, with profits having grown significantly.
“My father had accepted the unfortunate prospect that the company would close upon his retirement. So when I joined my father here at Providence Yarn, our goal was for me to learn the business and for us to explore options for the future of the company, “said Schuster.
Several critical business needs were identified, including succession planning, labor costs, staffing, marketing and providing higher-margin, added-value services.
Under the direction of Schuster’s stepson, Andrew Schuster, as the company’s new director of business development, the small staff took on the challenges together.
Andrew makes trips to different regions each quarter, to further identify customer needs and ensure satisfaction while also seeking out new prospects.
The momentum of the business has picked up, but the core values instituted by Terry Schuster’s father’s generation remained. “It’s a family environment, and our key to success is to constantly exceed our customers’ expectations,” said Andrew.
Today many small and medium-sized manufacturers who may require an assortment of yarns but not huge quantities of any particular one see Providence Yarn Co. as a grocery store for industrial yarns, such as polypropylene, nylon and polyester.
One new source of profit has been created by Providence Yarn taking on managing its customers’ inventory.
“We tap right into their corporate inventory. We hold [surplus products] here for them in the warehouse. We see their reports up to twice a week. And when inventory is low, we automatically ship it to them,” explained Terry Schuster.
In addition to the supply-chain side of the business – which boasts a 25,000-square-foot warehouse stocking approximately 1 million pounds of inventory and serving customers throughout the United States and Canada – the company has an associated knitting retail store, The Yarn Outlet.
Located in Pawtucket as the storefront to the company warehouse, it stands as Providence Yarn’s face to the public. Started some 50 years ago, and initially run by Schuster’s aunts, it’s a small financial facet of the business, yet “the store is what connects us to the community,” she said.
The store has many loyal, long-term customers and people of all ages who take its knitting classes.
“Our customers come in [to the Yarn Outlet], and they know they will always get help. And always be greeted. At some other stores, they think, ‘Do they even know I’m in the store?’ ” said store manager Kathy Grace.
“The commonality between the industrial side and store is the mantra of quality customer service,” said Schuster.
Manufacturing customers with unique specifications and material requirements use the company’s research services to identify potential sources of industrial yarns. Providence Yarn can provide twisting, texturizing, heat setting and rewinding as well as metered packaging.
“Sometimes customers call and need an order to be filled yesterday. In addition to doing all we can do to ship the order out immediately – even if it means staying late to wait for a truck to pick it up – I try to alleviate some of their stress ... This expedient kind of service will keep them coming back to us,” said Debbie Magner, customer-service associate.
The company has detailed practices of how to process an order; how quickly to turn it around and a special process for follow up that Schuster believes has contributed to the bottom line.
Major internal improvements were only a piece of the bigger picture. Schuster and her close-knit team faced an even greater challenge – finding a more suitable building. Having been located in a run-down section of town on the Pawtucket-Central Falls line, the mill was not energy efficient or set up for modern distribution. A new building was purchased a couple of years back, in Pawtucket, in an area that is undergoing substantial redevelopment. This has had a considerable positive impact on the retail business as well as distribution operations.
“People know our building now,” said Schuster. “The store is all glass in front, bright, and big … moving our wholesale and retail operations to Division Street has played a pivotal role in our growth and transformation.”
She’s quick to express her gratitude to the city of Pawtucket, which was eager to have them stay. “They were very warm and very hopeful. It was very good working with the mayor and the planning committee on receiving all the approvals that we needed.”
However, Schuster added that the business climate in Rhode Island can be challenging to sustain a successful business. “I don’t really think the state does anything to encourage businesses to stay in the state. High property taxes, state income taxes, energy costs and the fact that there’s a corporate license fee of $500 annually are some examples,” she said.
Carefully tracking growth in sales and the increase in new customers has allowed the company to sustain throughout the decades, as well as managing and prioritizing expenses.
Schuster takes great pride in the results. “What I love to hear now are people around the country saying, ‘Wow, it’s a totally new Providence Yarn.’ I take great pride in where we started – our history is our strength … our foundation … and it is this foundation that allowed us the opportunity to change with the times.” •