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WRJ-Based Ibex Lays Off 12 Workers, Changes Retail Strategy



Valley News Business Writer
Tuesday, November 07, 2017

White River Junction — Ibex Outdoor Clothing, the apparel maker of chic natural fiber pullovers, shells and other clothing, said it laid off 12 employees last week as the company grapples with upheaval in the retail industry.

The layoffs follow a recent move by the White River Junction company to shift its business strategy. After the current winter season, its clothing line will no longer be in independent retail stores such as Hubert’s Family Outfitters or Elevation Clothing in Woodstock.

Instead, Ibex will focus on selling its apparel solely through its online store and its three company-owned retail outlets in Boston, Denver and Seattle, a company executive said on Tuesday.

Like many retailers, especially those in the apparel market, Ibex is being buffeted by changes in consumer buying habits and bankruptcies among large sporting goods store chains such as Eastern Mountain Sports, Sports Chalet and Sports Authority that have shrunk shelf space.

At the same time, late and warmer winters in recent years have hurt the prime selling season for outdoor apparel makers.

Consequently, “all the paths forward will require very significant changes in the organization, (both in) the business model and the ownership structure,” Ibex Chief Executive Ted Manning said in a news release on Tuesday.

How those changes will pan out is not yet clear, Manning said in an interview on Tuesday, and he did not rule out the possibility that more drastic steps would be required to stabilize the company, including reorganization under the bankruptcy code.

“I really don’t know,” he said, declining to speculate about the eventual outcome. “This isn’t done yet.”

Manning said Ibex continues to employ about 20 people in Vermont and approximately another 40 among its three stores. He said that Ibex’s sales revenues have been around $20 million and actually have been increasing modestly in recent years as consumer spending has rebounded and customers remain highly loyal to the brand.

“This isn’t a growth problem,” he said. But he said “finding customers, keeping customers, and finding them again” is becoming a more complex task as shopping moves online and consumers become “agile” in their purchasing habits.

Ibex was founded in 1997 by John Fernsell, a former Boston investment banker, and Pawlet, Vt., sheep farmer Peter Helmetag, to design outdoor apparel made with wool sourced from merino sheep in New Zealand. They saw the breathable quality of fine wool as a more comfortable alternative to the “sweat like a gorilla” quality of Gore-Tex and polyester favored in mass-market brands, Fernsell once said.

Fernsell and Helmetag, in another bucking of the apparel industry, also sought to have at least half the company’s manufacturing done at U.S. plants, despite moving production overseas as most apparel companies have done.

But the original owners gradually ceded control of the company to outside investors. In 2004, Northwood Ventures, of Syosset, N.Y., led a group of institutional investors in the first of several rounds of financing, and then six years later North Castle Partners, a Greenwich, Conn., private equity firm, and CMS Companies, a Wynnewood, Pa., private wealth manager, each acquired a stake in Ibex.

And then, in 2015, First Niagara Financial Group, of Buffalo, N.Y., closed on a multimillion-dollar credit package to provide debt refinancing and working capital. In addition, the Vermont Economic Development Authority in 2016 provided $350,000 in working capital to Ibex to help the company integrate improvements in its manufacturing and supply chain with seasonal production cycles. VEDA said at the time that Ibex employed 57 people and expected to grow to 71 within three years.

Manning, formerly an 18-year veteran and executive vice president at Eastern Mountain Sports, joined Ibex in 2013.

Manning said that as of this fall, all manufacturing is now done outside the U.S., which he said has been driven more by the lack of capacity at U.S. plants rather than because of lower overseas manufacturing costs.

Ibex within the past few months began informing independent retail outlets that carry its high-end wool outdoor apparel that it would no longer be shipping to them after the current winter season because it was no longer profitable for the company to sell through independent retailers.

The move was greeted with dismay by store owners.

“It’s a brand I’ve carried and loved for 14 years,” said Kelly Fernald, owner of Nomads Adventure and Active Wear in Portland, Maine. “It’s going to be a big loss for my business. My customers here really relate to it. ... Ibex is the work uniform for half the men in downtown Portland.”

Charlie Kimbell, co-owner of Elevation Clothing in Woodstock, which has been a longtime seller of Ibex clothing, said that the outdoor apparel industry is being affected by everything from global economics to climate change, putting manufacturers like Ibex in a difficult spot.

“It can take two years from designing a product until when you actually show it,” he said, explaining the long lead time between product conception to market, during which the consumer market can dramatically shift.

“It’s a capital-intensive business and you can get caught as a manufacturer,” said Kimbell, a former banker and now also a state representative from Woodstock. “There’s a lot of pressure on Ted right now ... we hope they are able to turn it around.”

John Lippman can be reached at jlippman@vnews.com or 603-727-3219.



The following is a statement provided to the Valley News by Ibex CEO Ted Manning. Continue reading after the document.