The Hard Economics of Making Plush Toys in New Hampshire

In 1957, Penny and Bill Clarke took a leap of faith.

“They answered an ad in the Wall Street Journal, actually, which is pretty funny. It said, ‘Do you want to come help run a toy company?”’ says Scott Clarke, president of Douglas Company, and the youngest son of Penny and Bill.

“So they flew to Keene, bought half this business, and bought a house the same week. It’s a neat story.”

This is the second story in our series On the Line: Manufacturing in New Hampshire.  

Douglas, with Penny and Bill at the helm, would grow quickly, selling its stuffed animals to toy shops around the country.

“They did very well in the 60s and 70s,” says Scott Clarke, who would eventually take over management of the business from his parents. “They had a thriving business.”

By the late 1970s, the company employed more than 80 people, including teams to cut, stitch and stuff the plush toys.

But by the 1980s, the company watched as their competitors moved manufacturing operations overseas, where they could pay workers less. Suddenly, Douglas’s toys were more expensive than everyone else’s.

“Once one person makes the jump, you don’t have a choice,” says Crystal Rokes, a former stitcher who now leads the company’s design department. “Douglas held on as long as we possibly could to a stitching floor here, but eventually you either sink or swim.”

Douglas decided to swim, completely reshaping how they did business. The company scrapped its own production floor and moved its manufacturing to Indonesia and China.

Today, sales are ten times higher than they were, but the company only employs half the number of people. Manufacturers around the country have had to make this same tradeoff.

“It would be nice if they kept their employment up at 80, and provided those jobs for others,” says Douglas Irwin, a trade economist at Dartmouth College. “But if the alternative is losing those 80 jobs because the whole firm goes out of business, well, that’s…

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