Nothing woolly about success stories' focus

Icebreaker's Jeremy Moon says New needs to think global, not local. Photo / Kenny Rodger

It's taken Jeremy Moon about a decade to figure out how a tiny country like New Zealand can improve its economic future, but he thinks he might finally have cracked it.

The founder of outdoor clothing company Icebreaker is wary of sounding like a wanker, but he's done a lot of listening and a lot of thinking over the past 10 years and is justifiably proud of the fact that his 14-year-old company is expected to ring up more than $120 million in sales this year.

Icebreaker is in a rapid growth phase and over the past year alone - in the middle of a global recession - has grown by about 50 per cent. It already has eight subsidiary companies in 30 markets and employs around 200 staff - about a third of whom are Kiwis.

"The role of New Zealand is to create intellectual property and management systems and to retain ownership and profits here, but in my opinion it's not to try and do the things that it doesn't make sense to do," he enthuses.

Icebreaker uses New Zealand merino for its garments "because we are the best wool growers in the world", says Moon. However, it uses a cluster of other companies - including a French wool blender, a German yarn spinner and a Japanese textile house - for other parts of the process, including 1000 staff in Shanghai.

"We do that because that's where the best technology is and it's in the centre of the world."

As he sees it, if you want to compete with the best, you have to be even better, and that also means employing top people - who are not necessarily cheap.

The average age of an Icebreaker employee is 28, and Moon estimates most of his New Zealand staff earn roughly double the New Zealand average wage.

"In Germany we hired the head of North Face for Europe, and in the US we hired the head of sales for adidas, and we've got managers in place and it's their job to be entrepreneurial and to start and run businesses owned by Icebreaker. Meanwhile, you create jobs for New Zealanders offshore by giving them postings, and in New Zealand by getting them to run the head office. That's different from the 'we have to do everything here' mentality."

While Icebreaker is a high-profile example of how New Zealand's clothing industry is adapting to the 21st century, there are other examples of less well-known companies that are also moving with the times. For many, that currently means making as many merino garments as the market can take. But it also means developing a customer-focused strategy - which, for some, is the exact opposite of what they have been doing until now.

When Mosgiel Wool went bust in 1980, Hugh Douglas picked up some of its basic equipment and began making simple knitwear and string vests. These days his Christchurch-based company, Weft Knitting, has some of the most advanced technology in New Zealand, enabling it to produce entire garments almost at the press of a button.

In the old days, staff would make a pattern, take a square of fabric, cut it up, then sew it back together to make a garment. Nowadays, a technician uses a computer to convert a designer's ideas into reality, then plugs the disk into a knitting machine which spits out the final product.

"There's been a quantum leap forward in the way knitted garments are designed and produced," he explains.

Although "whole garment" technology has been around for about a decade, it's only in the past five years that New Zealand knitwear companies have started taking it seriously, says Douglas.

The equipment is expensive - each machine costs about $250,000, and Weft has seven of them. It also needs to send its staff to Japan to be trained. However the investment is worth it, he says, because it reduces labour costs and fabric waste.

This enables Weft to compete against Chinese manufacturers, who have not yet shown much interest in the technology. "We may not enjoy this advantage long term, but for the moment we have it."

Despite the tough economic environment, Weft has a full order book. Its two best known brands are Merino Possum and Bay Road Merinos, which it sells throughout New Zealand. It is also developing an export market in Europe.

"It's not massive but it's a lot bigger than Icebreaker or Karen Walker or Zambesi, or any of the iconic labels."

Douglas gives at least 10 per cent of his profits to local charities - which he mentions only to emphasise why he believes it is important to maintain some sort of local industry.

"A responsible local employer and local manufacturer generally has links with the community and is part of the community, unlike an agent who might be importing knitwear from China who's out there to get as much as he can, and does nothing for the community, and doesn't employ anyone," he notes.

"We also contribute to the infrastructure, through subcontractors, that supports the greater business sector within Christchurch."

Soma President in Hastings is also proud of its community involvement, which has included developing items for teenage cancer charity CanTeen, to providing garments for a group of women who plan to commemorate the 125th anniversary of the Commonwealth by leading an expedition to the South Pole.

Owner Harold Trigg says the firm has been asked to do an astonishing variety of work lately, from babywear to merino dog coats. "What we've decided to do is a subtle marketing change. Instead of having a sewing plant and saying 'We can make things for you', we ask people what they want to do and how can we help them get there."

The company was started by Trigg's grandfather at the beginning of the Great Depression, and at its peak in the 1960s it employed about 500 staff. Today it has just 35 employees but Trigg is nevertheless upbeat.

"I'm third generation in that dynasty and we are getting a resurgence in the recession, so I don't know what we're doing but it's quite exciting," he chuckles.

He believes recessions are cleansing. "As economists would say: there's attrition, and the wasting of the weaker members, but then there's something that replaces it, and I think a lot of people are rethinking and rejigging their companies for a new tomorrow."

Aucklander Emily May would agree with that.

May is helping her father, Mike, transform Manukau-based Jaedon Enterprises from a tracksuit-maker to a company that specialises in highly technical industrial clothing.

Four years ago the business lost one of its major contracts and was forced to rethink its future. It now concentrates heavily on fire-retardant garments, used by the likes of electrical workers.

It also makes cyclewear for trendy label Solo and is moving into wet weather gear.

The Department of Labour has helped it with productivity programmes and it is slowly building up its staff again.

Because it still makes its own garments it is able to respond much more quickly and flexibly to what customers want, says May.

"There's a lot of risk involved in bringing in stuff from offshore, particularly in our industry where it's very specialised, because you have to be incredibly reliant on your agents in Hong Kong that what they are supplying is exactly what you need."