The Tales of the Two Smart Shirts – Standard Shirts Dyeing, Weaving & Finishing Mills and Smart Shirts Manufacturers Ltd

York Lo: The Tales of the Two Smart Shirts – Standard Shirts Dyeing, Weaving & Finishing Mills and Smart Shirts Manufacturers Ltd

In the history of the garment industry in Hong Kong after WWII, there are two “Smart Shirts” and both had ties to Shanghai.

The first “Smart Shirt” (司麥脫) is a popular shirt brand made by Standard Shirts Dyeing, Weaving & Finishing Mills (新光標準內衣染織整理廠, referred to as “Standard Shirts” hereafter), a firm which was originally founded in Shanghai in 1933. It became the top shirt brand in China in the early 1940s and extended its popularity to HK, Taiwan and Southeast Asia in the late 1940s and early 1950s as the principals fled the mainland and set up shops overseas.

The other “Smart Shirt” is Smart Shirts Manufacturers Ltd (新馬聯合製衣), a major garment exporter founded in HK in 1956 by Shanghainese entrepreneurs which was acquired by the American textile giant Kellwood and today remains an important player in the global garment supply chain under mainland Chinese ownership.

Smart Shirt – the Iconic Brand

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Left: Smart Shirt ad in old Shanghai – the Chinese slogan under the brand name reads “love at first sight” (Source: Shanghai Library); Right: A stock certificate of 500,000 shares of Standard Shirts DW&F Mills issued in 1948, the 3 signatures from right to left: Fu Leung-tsun, Wong Ying and Yu King-lum

Standard Shirts was founded in 1933 as Standard Shirts Manufactory when its founders saw a business opportunity for locally made shirts due to the boycott of Japanese goods in the aftermath of the Japanese occupation of Manchuria in 1931. The founders included Fu Leung-tsun (傅良駿), his cousin Yu King-lum (俞景琳), K.C. Li (李光炽) and Teng-siao Mao (毛騰霄, hereafter referred to as “T.S. Mao”), who came from different backgrounds.

Fu, the head of the firm, was born in Pudong, Shanghai in 1911 and was working as a tram conductor trainee for Compagnie Française de Tramways et d’ Eclairage Electrique de Shanghai (上海法商电车电灯公司) after graduation from the Institut Technique Franco-Chinois de Shanghai (中法工學院) a year before. Yu contributed his technical expertise as he had worked for a Japanese shirtmaker in Hongkew, Li was a salesman while Mao, the oldest and most experienced of the four at the age of 40 was the scion of a prominent Fukienese family of admirals and a graduate of the prestigious St John’s University.

The initial operation on Avenue Dubail (吕班路) in the French concession started out with 9 workers who made 6 dozen shirts per day using 3 foot pedaled sewing machines and sewing buttons by hand.[i] Even though Japanese shirts were boycotted at the time, foreign made shirts from the US and Europe continued to dominate the Chinese market. The domestic competition was also intense with over 140 shirt factories in Shanghai alone, within which Standard was a small time operation compared to the industry leader China ABC Underwear, which was founded in 1920 by US-trained Thomas Goon Wong (黃鴻鈞) and had 1400 workers.

To grow its business, Standard started making shirts for a Portugese brand called “Dice” in 1934 in addition to its own “Standard Shirt” brand and by 1937, the firm was doing well enough to move into a 4 storey building at 27 Avenue Dubail with a store on the ground floor and 30 workers working on three floors of factories. A bigger plant with modern equipment was later established on the same site and the workforce grew to over 200 workers. [ii]

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Fu Leung-tsun (right) and Wong Ying (left) with General Li Tsung-jen (centre), the last president of the KMT government in China (who was usually in military uniforms), presumably all wearing Smart Shirt products.

By 1940, “Standard Shirt” was available throughout China and also started exporting overseas to Southeast Asia. Although the firm already possessed the technological know-how to make higher end shirts, it still primarily focused on the lower end market since higher end customers continued to favor foreign brands over local brands. As the Sino-Japanese War progressed, imported shirts from the West became more difficult to come by, and after the Pacific War broke out in 1941, they became unavailable in the half of China which was under Japanese control. Against this backdrop and after 6 months of research and development, Standard Shirts created the “Smart Shirt” brand to fill in the gap in the higher end market left by the foreign brands.

To promote the new brand, Fu recruited an advertising executive by the name of Wong Ying (王鶯) to join the firm as managing director.  In September 1942, Wong came up with a legendary month long print advertising campaign that put the Smart Shirt brand on the map. For 6 consecutive days starting from September 25, 1942, Standard Shirts secured full page ads in the two largest Chinese newspapers in Shanghai starting with the first one which featured a giant question mark, the letter “S” and a sentence stating that readers should stay tuned for tomorrow’s ad. Each day like a riddle another letter was added and by the fifth day the ad spelled out SMART. On the sixth day the actual ad announcing the launch of the new Smart Shirt brand was published. This generated enormous publicity and the firm followed up with two additional waves of ads – first one highlighting the retail outlets where the new shirts were available for sale, which included the “Big Four” department stores of Wing On, Sincere, the Sun and Sun Sun and the second one highlighting product quality and features and its brand identity. The ad campaign was so successful that Smart Shirts were flying off the shelf and quickly became the top shirt brand in China and the firm’s primary money maker. [iii]

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The first three full page ads in the legendary week day long Smart Shirt advertising campaign in September 1942.

As the shirt business grew, Standard Shirts decided to vertically integrate by acquiring 2 weaving mills and 1 dyeing mill in 1944 and as a result, the firm was renamed Standard Shirts DW&F Mills. It consolidated all of its production lines in one massive plant on 60 mou (10 acres) of land on Tangshan Road and by 1946 the factory had 1200 workers with daily output of 3000 shirts and 600 yards of fabric which it also sold to other smaller shirt makers in addition to going into its own shirts. They also operated a training school in Pudong that was churning out about 150 graduates every three months to add to the workforce.[iv]

As the export market re-opened after the War, Standard Shirts immediately teamed up with four other Shanghainese manufacturing concerns – China Thread Co (中國線廠), Tien Loong Weaving Mill (天隆布廠), Universal Handkerchief Weaving Factory (環球手帕), a firm controlled by S. W. Yao (姚思偉) who was known as the king of handkerchiefs and the Kang Fu Sock Factory (康福襪廠) to establish Kin Lik Co (建力公司) in Hong Kong as a master distributor of its products in the Southeast Asian market.  In charge of Kin Lik was Poon Tong-wah (潘棠華), an Indonesian Chinese of Hakka descent who had been active in promoting Chinese products in Southeast Asia since the 1930s. The overseas expansion effort was very successful and soon outbound ships from Shanghai to Southeast Asia were filled with boxes of Smart shirts and branches were established in Thailand and Singapore. [v]

Expansion also took place domestically and in October 1946, Fu and Wong came to Hong Kong to explore the possibility of setting up a plant and were welcomed in a reception by the local business community at the Gloucester Hotel in Central. [vi] Between 1945 and 48, branch offices of Standard Shirts were set up in HK, Canton, Hankow, Nanking, Changsha and Taipei. In early 1947, the four leading banks at the time helped finance Standard Shirts’ acquisition of three competing shirt factories and one weaving mill in Shanghai, which increased the group’s production capacity by 80 percent.

By 1948, Standard Shirts was the largest shirt manufacturer in the Far East and its Shanghai operations had 2500 workers (one article states as many as 4000) operating 20000 spindles, 1500 looms and 1000 sewing machines with a daily output of 10,000 shirts, which represented over half of the shirt industry in Shanghai. The weaving operation was producing 50,000 yards of fabric per month and the dyeing mill was dyeing 100,000 yards of fabrics per month. As chairman of the newly formed Shanghai Shirt Industry Association, the 36 year old Fu was recognized as the “king of shirts” and the firm’s total assets exceeded US$12 million.

As the Communists advanced in 1949, the 10 member board of directors at Standard Shirts was split about the direction the firm should take. Many industrialists in Shanghai were already moving to HK or following the KMT regime to Taiwan. With substantial assets in Shanghai, the board voted 9 to 1 to stay and T.S. Mao (who voted against staying) managed to bring 12 sewing machines to Taiwan where he started a plant for Standard Shirts. [vii] The Communists took over Shanghai in May 1949 and under the new regime, Standard Shirts started making “people’s uniforms”. Within months however, the firm was in dire straits as it grappled with a myriad of issues including evaporating sales, rising labor and the Party’s demands and a mounting tax burden. In April 1950, Fu left Shanghai for Hong Kong, never to return. [viii]

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Deputy Colonial Secretary Sir Martin visiting the Smart Shirt booth at the 1954 Hong Kong Products Expo. Source: Kung Sheung Evening News, 1954-12-19

In Hong Kong, Fu incorporated Standard Shirts DW&F Mills (HK) Ltd in September 1950 and established a plant at 2732 Ma Tau Kok Road in Kowloon to make Smart and Standard brand shirts. 1950 and 1951 were tough years for the HK shirt industry with many factories closing or suspending production as the domestic market was yet to be developed (it represented less than 20 percent of sales) while the Korean War and the related trade embargo had negatively affected export markets. Thanks to strong brand recognition, Standard Shirts managed to stay afloat. [ix]  1952 marked a turnaround year as sales doubled from the previous year and monthly output at the HK plant jumped to 60,000 shirts thanks to strong sales in Indonesia, which represented 80 percent of business.[x]

Desperate for much-needed capital to jump-start the industry in Taiwan, the KMT regime in Taipei sent Lei Chen and Hung You-lan to Hong Kong in 1951 to recruit former industrialists from the mainland such as Fu and his friend CY Liu (劉慶一, who operated silk mills in Wuxi and Shanghai) to invest in Taiwan and in 1953, Standard Shirts HK increased its investments in Standard Shirts Taiwan via transfer of equipment and materials while Liu also established Maryland Textile (鴻福紡織) in 1952 in Taiwan which supplied silk yarn to Standard Shirts. [xi]   Under the management of T.S. Mao, a modern plant was built in Chung Ho near Taipei which by 1955 was employing around 100 workers with monthly output of over 20,000-30,000 shirts.

In 1954, Standard Shirts embarked on major overseas expansion and set up factories in Indonesia and Japan. The Indonesian plant was the largest in the country with monthly production capacity of 180,000 shirts while the Japanese plant (a first for Chinese and HK manufacturers) had monthly production capacity of 60,000 shirts but was limited to domestic sales. [xii] By 1955, the Hong Kong plant, though small in comparison to the Shanghai plant in the latter’s heyday, had 500 workers and was producing 120,000 shirts and dyeing 30000 yards of fabric per month and in addition to dress shirts, it was making Hawaiian shirts, underpants and pajama pants which were sold domestically and also exported overseas to Southeast Asia and Africa.[xiii]

In 1956, Fu and Liu got into trouble in HK when Maryland Textile HK (formed in 1954) was ordered to be wound up. Fu left for Taiwan where he remained involved with Standard Shirts Taiwan although he was no longer the controlling shareholder and was paralyzed due to a stroke. Under the leadership of Shanghainese businessmen P.Y. Chang (張伯英, 1914-1997) and Pai-Hui Hsueh (薛伯輝, 1929-2004) who took over the business in the late 1950s and early 1960s, Standard Shirts Taiwan remained a leading shirt maker in Taiwan with robust domestic sales from its own retail outlets in Taipei and other retailers. T.S. Mao left the firm in 1957 for the US but returned to Asia in 1959 as head of the Far East operations in Singapore for Cluett Peabody, the American maker of Arrow shirts. In Hong Kong, Standard Shirts HK was eventually dissolved in 1963.

Back in Shanghai, Standard Shirts went through a number of re-organizations and eventually became part of the Shanghai Garment Group (上海服装集团). Today, its “Shanghai Shirt” brand remains popular and was worn by the Chinese delegation at the 1992 Barcelona Olympics.

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Detailed profile of Standard Shirts in 1954 including a picture of Fu Leung-tsun greeting the Deputy Colonial Secretary (Kung Sheung Evening News, 1954-12-22)

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1953 Ad about the Singapore branch of Standard Shirts (Source: The Singapore Free Press, 30 May 1953)

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Pictures from 1955 article about T.S. Mao and Standard Shirts Taiwan. Source: The Rotarian, Jan 1955

Smart Shirts – the Garment Exporter

Just as Standard Shirts and its Smart Shirt brand faded away from the Hong Kong scene, a firm by the name of Smart Shirts, formed also by Shanghainese businessmen, emerged with a very different business model – private label garment manufacturing for clients in the West. In April 1956, Smart Shirts Manufacturers Limited (新馬聯合製衣) was incorporated with HK$100,000 in paid up capital and offices at the Bank of China Building. [xiv] The three directors of the firm listed at incorporation were Ma Chung-tat (馬仲達, 1907-1999), a leading exporter in old Shanghai whose brother was the comprador of Unilever [xv]; William TL Yao (姚祖亮, 1922-1979) who ran the show and Wong Kam-tim (黃錦添) who supervised finance. Given the timing and the name, it is possible that Smart Shirts took over the HK manufacturing operations of Standard Shirts.

The business grew rapidly as the demand for HK made garments in US and Europe was strong and by the end of the 1960s, the firm had 3000 workers working in a 250,000 square feet new factory in 206-208 Choi Hung Road in Sun Po Kong and exported 1.6 million dozens pieces of garments with 3 garment factories and 1 subsidiary. In January 1970, Smart Shirts Limited (the holding company for all related subsidiaries) went public selling 25% of its shares in an IPO arranged by Jardine. [xvi] The chairman of the firm at listing was Y.C. Pei (裴延九) a banker associated with the China & South Sea Bank and Jeff Hu (胡格非), a son of the Bank’s founder was also a Smart Shirt director.

After the listing, Smart Shirts continued to grow and moved its manufacturing operations to a larger building (Smart Shirt Factory Building) on 55 King Yip Street in Kwun Tong in 1976.[xvii] In 1970, Smart Shirts was the first firm in Hong Kong to install Century 100 computers from NCR.

By the year 1978, Smart Shirts had US$50 million in sales and $3.7 million in net profits. Sadly in January 1979, the firm’s leader William Yao died at the age of 56 [xviii] and in his memory, his family endowed the William TL Yao Memorial Scholarship at the HK Polytechnic Institute of Textile & Clothing.

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TF Ying (right) donating his St John’s University diploma in 2006

After the death of Yao, the management of Smart Shirts was assumed by Tao-Fu Ying (應道富), a graduate of St John’s University in Shanghai and younger brother of T.S. Ying (應鼎成), the founder of Lea Tai Textile. Business continued to grow and in 1979, it did US$86 million in sales with earnings of more than US$9 million and also held the largest import quotas for shirts entering the United States. On Christmas Eve of 1979. American garment giant Kellwood acquired 30 percent of Smart Shirts for US$11 million in cash. [xix] As a result of the acquisition, Pei, Jeff Hu, T.O. Liu (劉天宏, a prominent Shanghainese textile and real estate investor who was a graduate of Tsinghua University) and R.C. Kwok (郭勤功, director of Jardine Matheson and son in law of prominent stockbroker and Exchange chairman Mok Ying Kie) resigned as directors of Smart Shirts in early 1980 and representatives of Kellwood joined the board with Kellwood chairman Fred Wenzel succeeding Pei as chairman and T.F. Ying continued to run the day to day operation as vice chairman and managing director. [xx]

For Kellwood, buying Smart Shirts was a smart decision as it desperately need to diversify. Kellwood was formed in 1961 by the merger of 15 suppliers of soft goods to the retail giant Sears and its name was a combination of two Sears executives – Charles Kellstadt and Robert E. Wood. In 1980, Sears still owned 20 percent of Kellwood and accounted for 80 percent of its sales, a high concentration that had hurt its business in the market downturn 5 years earlier. As Smart Shirts the company made high quality shirts and blouses for Gant, Arrow, and Eagle and also counted four big US department store chains Macy’s, Federated Department Stores, May and JC Penney as major clients. The acquisition of Smart Shirts enabled Kellwood to lessen its dependence on Sears. [xxi] 

In 1982, Kellwood acquired 82 percent of the firm and under Kellwood ownership and Ying’s management, Smart Shirts continued to grow. In 1983, Kellwood bought the remaining shares of the firm and also absorbed the large 5 year old Sri Lankan garment manufacturing operations of Lo’s Mee Kwong Group which it placed under Smart Shirts’ management.  In 1989, Kellwood acquired Saipan Manufacturers, Inc., a manufacturer of men’s shirts and sport shirts in North Mariana for export to the United States and once again rolled it under Smart Shirts. By the end of the 1980s, Smart Shirts accounted for more than 40 percent of Kellwood’s operating profits and helped supplant the losses from the rapidly declining Sears. (Kellwood bought out Sears’ stake in the firm in 1984 and also represented less than 50 percent by that time)

Ying eventually retired from Smart Shirts and moved to Vancouver where he was instrumental in the founding of St John’s College at the University of British Columbia to continue the legacy of his alma mater St John’s University.

In 2007, Kellwood sold Smart Shirts to Shanghai-listed Youngor Group for US$120 million in cash and its real estate assets to another party for US$41 million in cash. At the time, Smart Shirts was doing roughly US$400 million in sales with $10 million in profits and clients included Nautica, Liz Claiborne, Oscar de la Renta, and Perry Ellis with 14 manufacturing facilities located in China, Hong Kong, Sri Lanka and the Philippines. [xxii]

Today Smart Shirts as a subsidiary of Youngor Group’s Sunrise Textile division remains a leading global supplier of premier shirts and sportswear and operates 20 manufacturing facilities in HK, China, Cambodia, Vietnam and Sri Lanka.

References:
[i] 新民晚报1950年4月7日
[ii] http://sh.eastday.com/m/20120614/u1a6625140_5.html; http://www.shtong.gov.cn/node2/node2245/node4538/node56967/node56981/node56983/userobject1ai45343.html
[iii] Wei Shiji Daiyan – Zhongguo Jindai Guanggao, 2004, pp 83-86
[iv] Kung Sheung Daily News ,1949-10-19
[v]南洋商报 (Nanyang Siang Pau), 2 August 1947, Page 5
[vi] Kung Sheung Daily News, 1946-10-21
[vii] The Rotarian, Jan 1955
[viii] https://read01.com/7k3oB8.html
[ix] Wah Kiu Yat Po, 1951-12-7
[x] Wah Kiu Yat Po, 1952-9-11
[xi] Leu Chen Diary, 1989, p56
[xii] Kung Sheung Evening News, 1954-12-22, 1954-10-8
[xiii]工商晚報, 1955-01-07
[xiv]大公報, 1956-04-10
[xv] 定海新闻网  2009-10-09
[xvi]華僑日報, 1969-12-16
[xvii]香港工商日報, 1978-12-19
[xviii] http://www.findagrave.com/cgi-bin/fg.cgi?page=gr&GRid=55563405
[xix] Kellwood Acquires HK Interest, New York Times, Dec 25, 1979
[xx] Wah Kiu Yat Po, 1980-2-23
[xxi][xxi] http://www.fundinguniverse.com/company-histories/kellwood-company-history/
[xxii] http://www.prnewswire.com/news-releases/kellwood-to-sell-smart-shirts-to-youngor-group-co-ltd-58708112.html

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