The encyclopedia · Strategy & Leadership · Strategic decision · 1965–1989
Singer invented the sewing machine industry — then diversified into a hostile takeover
Singer made sewing machines for 130 years. Then it bought Friden and General Precision. By 1987 a raider stripped the company and sold the Singer name.
Singer Corporation · 1987
What happened
Singer was one of the most recognisable brands in the world. Founded in 1851, it invented the modern sewing machine and by 1913 was selling more machines than all other makers combined. By 1860 it was already the largest sewing machine manufacturer globally, pioneering installment payment plans and door-to-door sales. At its peak, Singer's Clydebank factory in Scotland produced 13,000 machines a week.
After WWII, the sewing machine market matured and foreign competition grew. Singer's president Donald Kircher responded with radical diversification. Between 1965 and 1968, Singer bought Friden (calculators), General Precision Equipment (aerospace, flight simulators), and entered home audio. The idea was to reduce dependence on sewing machines. Instead, Singer competed in industries it understood poorly, against companies that dominated them. The business machine division was a disaster; Singer withdrew from data processing in 1976, selling to TRW and ICL.
By 1987, Singer was vulnerable. Corporate raider Paul Bilzerian launched a hostile takeover. When no white knight appeared, he ended up owning the company and immediately began selling its parts: Kearfott navigation to Astronautics, the Link flight simulators to CAE, and — in 1989 — the sewing machine division to Semi-Tech Microelectronics. The name Singer was sold along with it. The original Singer Corporation was renamed Bicoastal Corporation. The company that had invented the sewing-machine industry ended as a shell.
Why it happened
- Singer's diversification into calculators, aerospace and home audio had no connection to sewing machines — Singer knew nothing about those industries and had no competitive advantage there
- The acquisitions cost hundreds of millions and required constant investment, starving the core sewing machine business at the exact moment it needed to defend against Japanese competition
- Singer's weakened state after decades of failed diversification made it an easy target for a corporate raider who had no interest in running the company — only in dismantling it for parts
The lesson
A 130-year-old brand can be dismantled in two years if management wasted decades buying businesses it did not understand. Diversification is not strategy — it is a bill that comes due.
Aftermath
The Singer sewing machine business was acquired by Semi-Tech Microelectronics in 1989, which incorporated it into Singer N.V., which filed for bankruptcy in 1999. In 2004, Kohlberg & Company acquired Singer N.V., and in 2006 merged it with Husqvarna and Pfaff to form SVP Worldwide, which still owns the Singer brand. The Singer name survived, but the original company was gone. The case is taught as the definitive example of value-destroying diversification and the dangers of becoming a takeover target.
Sources
- Wikipedia — Singer Corporation (founded 1851; 13,000 machines/week at peak; Donald P. Kircher diversification 1958-1975; Friden acquisition 1965; General Precision Equipment 1968; withdrew from data processing 1976; hostile takeover by Paul Bilzerian 1987; sewing division sold to Semi-Tech 1989; renamed Bicoastal)
- Bloomberg
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