American buyer VF Corporation had active wear, sports and lifestyle apparel brands like The North Face, Vans, Timberland and Smartwool.
The products spanned a range of natural and synthetic materials including footwear and accessories.
NZ farmers would continue to supply most of Icebreaker’s Merino under the new owner for at least the next five to 10 years though overseas supply would have to increase as the business grew, Icebreaker chairman Rob Fyfe said.
Icebreaker already used a small amount of non-NZ Merino to cover supply shortages.
Existing contracts, including a new 10-year one for Smartwool, would be honoured and a broad aim was higher Merino prices to incentivise more NZ production, Fyfe said.
The business would have a heftier presence in Asia and North America under the new ownership.
It exported 86% of its products but sales were skewed toward Australasia and western Europe.
It had a light Asian presence and it was a similar story in North America with US sales only on par with Canada.
“Our big challenge is to make sure the Merino industry in NZ can support most of Icebreaker’s requirements.”
Fyfe said VF Corporation was a natural match for Icebreaker with the resources to make it much bigger. The businesses also would learn from each other.
VF Corporation valued Icebreaker’s brand, heritage, people and vision but also its intellectual property, such as Icebreaker’s insulated MerinoLOFT jackets.
The range was an alternative to down and synthetic products and added another sustainable product to VF Corporation’s stable.
While another New Zealand business was going overseas, it made sense for Icebreaker to be closer to customers, Fyfe said.
The company had 340 full-time employees (450 in total) and supplied clothing to more than 5000 stores in 47 countries.
About three-quarters its staff were offshore and Fyfe, a professional director, estimated he spent about 40% of his Icebreaker time on a plane.
He was sure VF Corporation would keep the company’s ethos of sustainable, natural fibre and its Kiwi provenance.
The business would also continue to pay tax in NZ and Fyfe would stay on to help move the 21-year-old company into the new era.
VF Corporation chairman and chief executive Steve Rendle said Icebreaker’s natural fibre products were an ideal complement to its Smartwool brand.
The apparel collection for men, women and children harnessed the natural performance of Merino wool sourced directly from the most sustainable and ethical Merino farms in NZ, he said.
Icebreaker founder Jeremy Moon, currently executive chairman, would stay on in the business.
As a 24-year-old marketing graduate Moon was travelling with his American girlfriend in the mid 1990s when he came across a Merino grower who showed him a prototype fabric he’d developed from NZ Merino wool.
Moon recalled seeing the potential of a natural, biodegradable fabric that combined the benefits of wool and synthetics.
He quit his research job, mortgaged his house and launched Icebreaker, started a new retail outdoor category: Merino outdoor clothing.
Within a decade, Icebreaker was NZ’s biggest clothing producer and exporter.
Icebreaker was thought to be among the first companies to begin offering multi-year contracts to Merino farmers.
According to one report, the commodity buying process almost broke Icebreaker in the late 1990s when its products began to unravel because of inconsistent fibre quality.
But Moon saw the value of offering price premiums to growers who could produce fibre that uniformly met the company’s stringent requirements.
Today, NZ Merino Company facilitated wool contracts with the growers in partnership with Icebreaker.
That included price and volume negotiations, testing of Merino against preset standards, management of batching and monitoring onfarm ethics.
VF Corporation said Icebreaker Holdings generated about US$150 million of revenue in the past 12 months.
Sale terms were not disclosed but the deal was expected to be completed early next year.
