Moon's vision for Icebreaker widens
Anywhere "rich, cold and active" is where Icebreaker wants to be.
That's why you will find the Kiwi outdoor clothing brand's stores in San Francisco, Vancouver and Montreal, and that is why it is hanging out its shingle in Boston and Washington rather than Milwaukee or Pennsylvania.
"They're our types of towns," founder Jeremy Moon says, "because there's a similar type of active and, to be honest, successful person."
The merino activewear company, long held up as an exemplar for New Zealand exporters, is reinventing itself as a multi-channel global wholesaler and retailer.
Moon says as chief executive it is his job to create the future of the company.
"I feel like I'm learning the business all over again. I'm actually finding it quite thrilling."
He believes in a rich diet of inspirational sources and has an extensive network of his peers around the world.
From this he knows the rules of business have changed. Five years ago at the annual summit of apparel and retail CEOs in New York, where he rubs shoulders with rag trade royalty such as Prada and Gucci, the question was "can we do our own retail stores as well as supplying department stores?"
Now the discussions are about how to run multi-channel businesses with company-branded retail stores, wholesale customers and online shops.
It should be up to the consumer how they buy your products, Moon says. "You also get very valuable consumer insights the closer you get to the customer."
Icebreaker clothing is sold in 3000 stores across 44 countries - the "engine room" of the business. But when you supply a wholesale partner you only know what they choose to buy for the season. When you retail directly you have a much better idea of what the customer wants, and can design products accordingly.
Icebreaker has 12 stores (known as "Touchlabs") in New Zealand, the US, Canada and France, plus seven outlet stores in this country, Australia and the US.
It is in the process of opening three more Touchlabs in Boston, Washington DC and Chicago and will continue expanding in North America. Next on the list is Europe. Asia will be a significant market "one day", but the time is not right - "often with business it's choosing what you don't do that's important", Moon says.
And New Zealanders and Australians will shortly be able to buy Icebreaker garments online for the first time.
"It's very much an ‘and' strategy, we're not giving up on wholesale. It's about in bigger markets how do we become a famous brand, and having stores in SoHo in New York and Union Square in San Francisco all contribute to that."
Add e-commerce into the mix and you've got a whole new suite of ways to engage with customers, he says.
However, the new model requires a radical company redesign. "The skill set and business practices that you need for running a wholesale business are quite different from when you're running a retail and online businesses," Moon says.
Coriolis Research retail analyst Tim Morris says the market for Icebreaker's products has been well tested through its wholesale business.
"To move further into retail is the right time in their evolution.
"If you went down the top 50 fashion brands in the world, 80-plus per cent would have their own retail outlets in some form or another."
The world is splitting into two types of retailers, Morris says - one-trick ponies with their own stores selling a narrow range of products, and big retailers such as Wal-Mart and The Warehouse offering a huge range.
The Icebreaker story has been oft-told - how in 1994 as an enthusiastic young cultural anthropology graduate Moon met merino sheep farmer Brian Brackenridge, who had developed a thermal T-shirt made from merino wool. Working from his bedroom, Moon wrote a business plan to create a new category of natural-tech garments and build a global enterprise.
The next year the late Sir Peter Blake wore a prototype Icebreaker top and leggings for 40 days and nights sailing around the world, and his enthusiastic endorsement gave Moon the confidence to launch the company. It took Icebreaker three years to make its first profit of $800.
"I was just interested in brands and I was interested in how to build a brand that told an authentic story," Moon says. "I look at [merino] like a potter would look at a lump of clay."
Today it is a company with an annual turnover of $180 million and accounts for a quarter of New Zealand's merino clip. It manufactures in Shanghai, while the New Zealand headquarters looks after the brand, creates the systems and sets the strategy.
In the next 12 months Icebreaker will hire another 50 staff in New Zealand, but it's unlikely all will be Kiwis. The company sometimes has to go offshore to gain the specialist skills it needs, Moon says, and this is why it moved its design operation to Portland, Oregon six years ago - the "Silicon Valley" of the apparel industry, where sportwear giants Nike and adidas are located.
Moon is a fan of the Nike global supply chain structure. "Nike's model is you do what makes most sense. I didn't want to have the best idea but be beaten on product, be beaten on price, be beaten on speed to market or be beaten because I didn't understand the local conditions.
Outgoing Air New Zealand CEO Rob Fyfe joined the Icebreaker board in July and Moon says his insight has been invaluable.
"My weakness is Icebreaker is the only company I've worked for. So I need people around me who . . . understand leadership and what it is to be a great CEO, because I'm on a pretty steep learning curve."
JEREMY MOON’S LESSONS FOR SUCCESS
1. Dream then do, in that order. It's important to dream big and to run your business towards this goal. However, dreaming needs doing as its partner.
2. The first people you hire are the critical core group, as they set the long term culture and values. 'As a business grows, that initial culture needs to be refined and revived and if you get your leaders right it will flow through an entire organisation. Icebreaker's culture is informal professionalism; people [are] themselves, but we execute with discipline and rigour.'
3. Recognise your business as an ecosystem Icebreaker is 'a whole system which starts with our merino growers and ends with our customers in 44 countries. 'We have a transparent supply chain and the highest environmental, ethical and social standards. ]
4. Act from the future. Every year we review our three-year plan, which takes us out of the everyday and pushes us into an imagined future. We then say “If we are doing this in the future, how do we need to change our behavior right now?” '
5. Shed your skin every two to three years. The limiting factor of every business is the CEO and leadership team. I have to radically reinvent myself every two or three years, or I slow down and get stale. Icebreaker is my case study to teach me about the world and help me evolve into a better person and leader.
6. Growth creates opportunities for everyone. If you're not growing, you're dying. Growth requires an ability to read your environment to make decisions about the future.
7. Every person counts. Every single person at Icebreaker is a critical part of our business. Who we are for each other is as important as who we are for customers. I believe a person with integrity is the same person inside their working life as they are outside.
8. Great product needs a great story. Icebreaker unlocked a true story about the excitement of adventure, and linked it to what New Zealand was famous for - sheep and an outstanding natural environment. This underlying ethos drives customer loyalty and our ability to maintain pricing - which we need due to the very high costs of our merino garments versus synthetic competitors. As we evolve international brands from New Zealand, we need to unlock the power of storytelling.
Staff numbers: 350
Export revenue as percentage of total: 81.4 per cent
Locations: Head office in Wellington, operations in 15 other countries
Number of countries exporting to: 44
- © Fairfax NZ News