Having Survived Economic Downturn, Baker Is Thankful

The Great Recession put a real scare into Michael Baker. Even now, five years after enduring the worst of the economic downturn, the bad memories are fresh in his mind.

Throughout the 1990s and into the mid-2000s, the founder and owner of Houndstooth Clothing Co. of Fayetteville enjoyed nothing but growth and profitability in the T-shirt industry. As a result of his success, he was named to the Northwest Arkansas Business Journal’s Forty Under 40 class of 1997.

Up to that point, business had been good. There were plenty of pats on the back, and aggressive banks were eager to offer capital. In that environment, Baker continued to enjoy a booming enterprise for another decade. But then came Christmas 2007, and then the dreadful year of 2008, and, suddenly, Baker found himself frightened, unprepared and searching for answers.

“People just stopped spending money all at once,” Baker said. “Things got iffy for a while there.”

During the depths of 2008, Baker looked at his brand, his product mix and the very way Houndstooth did business. He knew something bigger was afoot.

“I kept looking at the numbers and realized there was something going on that was out of our control,” he said. “No one really understood how bad it was going to get. I knew the economy would come back, but the question was, ‘Can we make it until then?’”

In 2006, unaware the recession was about to unfold, Baker plunked down nearly $725,000 for the building at 636 E. 15th St. where his production facility is located. Burdened with a cumbersome mortgage and falling sales, 2008 was the time to panic.

He sought advice from those he trusted and, Baker said, they helped him straighten out his priorities. And that’s when the tough decisions began to be made.

He called the mall outlets and negotiated discounted rent payments, laid off some employees and asked others to restructure their salaries. He had to retool his thinking, too, and view the company as an investment. He realized that at one point he hadn’t even known what retained earnings were and that, at one point, he thought all he had to do was create a good product and a good work environment and that everything else would work out.

“I was naïve,” said the 48-year-old.

By the end of 2009, Baker knew his ailing T-shirt company was in recovery, and from then on, Houndstooth has continued to register strong sales. Baker said this May was the best May in the company’s history and that overall sales are up 35 percent.

“We’re selling plenty of T-shirts,” he said.

Houndstooth retails at mall locations in Fayetteville, Fort Smith, Hot Springs, Little Rock and Jonesboro. An affiliated business, Houndstooth Press, produces custom T-shirts for school and church groups, Greek organizations and special events.

Now that Houndstooth is back on solid ground, Baker said it’s time to let loose of the reins, cede day-to-day operations to his staff and consider new horizons.

And from the looks of it, there’s plenty else to do. Baker and wife Catherine have three children: 15-year-old John, the athlete; 13-year-old Thomas, the actor; and 11-year-old Elizabeth, the dancer. He’s looking forward to spending as much time with them as he can before they graduate from high school and move into their adult lives.

“I want to soak up every minute of it,” he said.

While fatherhood comes first, Baker is still a workhorse. He built Houndstooth with grueling 80-hour weeks and, when he was forging the company’s brand, was known to come back to work after he’d put his kids to bed — anything to get the job done.

It’s a good guess that even if he steps away from the T-shirt company, it’s likely he’ll find something else to do.

With a degree in architecture, Baker has an affinity for construction. Back in the day, he framed out the space for his print shop. In the last few years, he’s flipped a couple of houses and will probably flip a few more. Right now he’s building a swimming pool.

When asked what he’ll finally settle on for his second career, he smiled and said, “Who knows.”