First-class fibre turns a fine profit

By PAULA OLIVER

As the world's fashion gurus flock to merino wool, one Auckland knitwear firm has the fine fibre to thank for its very survival.

Merino has proved to be a lifeline for Kingsland-based Glengyle Knitwear, a 49-year-old survivor in the business of crafting traditional merino and angora garments.

As merino becomes a lucrative and trendy item, Glengyle can target younger markets and is looking at new opportunities to export to Britain and Europe.

Governing director Wayne Ashworth has come a long way from the dark days of tariff removals in the late 1980s. But he is glad to report that merino's current popularity is a boost to his business.

The winning formula has been a combination of establishing a strong brand name, building customer loyalty and letting others source the best-quality wool.

Mr Ashworth took over Glengyle in 1988 just as tariff cuts began to stretch the knitwear industry. Protection was removed for local manufacturers and many went to the wall.

"We were lucky. We survived because we had our own brand-name and we had established loyalty to it," he says.

"Some of the ones that went down did so because they were making garments for chainstores but without their own brand-name."

Glengyle had been making knitwear since 1951 and saw several structural changes before Mr Ashworth took over and relaunched with just 40 staff, down from 120.

"We knew the label had a loyal following among people in the 40-plus age group, and we were confident we could retain that loyalty among suppliers," he says. "We took a conservative approach, and by 1994 we had lifted our staff to 75."

With knitwear firms unravelling around him, he then saw the demise of the infrastructure supporting them - wool sourcers. Feltex vanished in 1995 and Mr Ashworth established a valuable relationship with Wrightson that still continues.

Wrightson took over the sourcing of Glengyle's merino fibre from several locations, including Kerikeri, Waiheke Island and Cape Palliser.

"I am no wool-classer so I am reliant on wool experts to source the best fibre they can find for me," Mr Ashworth says.

"We have been delighted with the quality we have been getting."

Armed with the best merino, he sought a processor for the yarn and found that nobody in New Zealand had the equipment.A processor was found in Australia and Mr Ashworth personally financed the first batch of wool to cross the Tasman for spinning and dyeing.

Glengyle's yield began to lift and business grew.

"We made a bit from the tourist market in the early 1990s but we are not a company that goes in for gimmicky products with a lot of decoration."

Tourist sales are now down but trade has grown through good customer service and securing deals.

Glengyle puts extra effort into meeting orders on time and being able to supply retailers quickly.

A stock service was established, providing retailers with a catalogue of core items that can be ordered from the factory for immediate delivery. The service now accounts for one-third of the business.

A large chunk of the rest of Glengyle's sales come from contracts for part of Air New Zealand's wardrobe and jerseys for the Fire Service.



The popularity and increased exposure that merino wool has enjoyed in recent years has been the key to securing such deals. That success is the fruit of the emergence of Merino New Zealand, a body dedicated to marketing the yarn domestically and overseas.

"We embraced the concept quickly and saw it as a tremendous opportunity to market merino as a soft and unique yarn," Mr Ashworth says.

Glengyle's exports to Australia have risen from 5 per cent of business to 25 per cent and Mr Ashworth is looking further afield. There has been interest from Europe this year. "But we are continuously trying to appeal to a more youthful market, too, and have been modernising some of our items."

A merino and lycra mix "Body Hugger" top is part of that range, and further products are planned.

Mr Ashworth concedes that the weak NZ dollar makes the export outlook promising but believes prices cannot be constantly adjusted to suit an exchange rate.

"That is the scary thing about the US and Europe, in that orders can be taken six months before they are finalised and a lot can change in currency in that time."

Initial winter sales were promising. But despite the business' seasonal nature, he does not employ seasonal staff.

"We see our staff as part of the family and we know they want the same amount of money each week so we gear the factory to keep going at the same level all year."