Icebreaker reinventing itself
Kiwi clothing maker Icebreaker is reinventing itself, reports Maria Slade .
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 homegrown merino activewear company, long held up as an exemplar for New Zealand exporters, is in the process of reinventing itself as a multi- channel global wholesaler and retailer.
Moon says as chief executive that 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 that the rules of business have changed. Five years ago at the annual summit of apparel and retail chief executives in New York, where he rubs shoulders with rag trade royalty such as Prada and Gucci, the question on everyone's lips 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 in 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 now has 12 stores (known as "Touchlabs") in New Zealand, the United States, 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.
At the other end of the world New Zealanders and Australians will shortly be able to buy Icebreaker garments online.
"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 suddenly 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 business," 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 big range.
Professional director and retail consultant Ted van Arkel, who is on The Warehouse board, also gives Icebreaker's retail expansion the nod. He was "absolutely starstruck" to see a street display by local Icebreaker staff outside a department store in Vancouver recently. "They are in control of their own brand, brand position and marketing that way."
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 prototype 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 go all-in and 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 there are plans to double that in the next three to four years. It accounts for a quarter of New Zealand's merino clip, with dedicated "Icebreaker" stations growing fibre to its specifications.
It manufactures in Shanghai, while the New Zealand headquarters looks after the brand, creates the systems, sets the strategy and services its seven international operations.
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 overseas 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 sportswear 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.
"On one side this is very complex to learn and manage. [But] every New Zealand company is competing against the best in the world."
Outgoing Air New Zealand chief executive 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."
Staff numbers: 350.
Export revenue as percentage of total: 81.4 per cent.
Locations: Head office in Wellington, branches in 15 other countries.
Countries exported to: 44.
The Dominion Post