Exporter - - FRONT PAGE - By Glenn Baker. Glenn Baker is editor of Ex­porter.

The New Zealand Sock Com­pany needs lit­tle in­tro­duc­tion. There are very few of us who have not wrig­gled our toes into a pair of its comfy high-tech cre­ations. For a com­pany that's been around for 115 years, and spanned three gen­er­a­tions of the Spar­row fam­ily, it cer­tainly has stay­ing power.

In re­cent years much of that suc­cess, par­tic­u­larly on the ex­port front, can be at­trib­uted to its adop­tion of clever man­u­fac­tur­ing tech­nol­ogy.

CEO Euan Spar­row, who bought the busi­ness with his dad Cip in 1980 has re­cently de­scribed The NZ Sock Com­pany as “the world's high­est-tech sock man­u­fac­turer”. A lot of that is to do with the re­cent in­vest­ment in the lat­est lead­ing-edge plant from Italy – but the tech­nol­ogy doesn't stop there.

“We don't just sell socks any­more, we are sell­ing tech­nol­ogy,” ex­plains Euan. “We de­vel­oped a bridg­ing sys­tem with a world renowned di­a­betes spe­cial­ist po­di­a­trist, hav­ing spent a num­ber of years re­search­ing and find­ing out about feet and what is needed to pro­tect them. From this, came our patented Pal­adin™ Pro­tec­tion Pad.”

This tech­nol­ogy is now the cat­a­lyst

“We do have a ma­chine re­place­ment pol­icy that ev­ery year we pur­chase new plant, whether we can af­ford it or not.”

for all the com­pany's growth mov­ing for­ward, he says.

“We now of­fer our tech­nol­ogy, along with that of The Merino Com­pany's NuYarn®. This is a rev­o­lu­tion­ary tech­nol­ogy that has changed the ap­parel in­dus­try.”

Such lead­ing tech­nol­ogy is cru­cial to build­ing sales in off­shore mar­kets, he be­lieves. “To make money in the ex­port mar­ket, you need to of­fer some­thing that is of high value and like noth­ing else out there. Any­one can make a sock, but we of­fer more than just a sock.”

The com­pany's first ex­port busi­ness was to Canada and the UK in 1994, which Euan de­scribes as be­ing “a very ex­cit­ing time”.

“Un­for­tu­nately back then we never had the mar­ket­ing ex­pe­ri­ence or fund­ing to re­ally get it off the ground. The prod­uct we were show­ing was ob­vi­ously dif­fer­ent to what we are do­ing now, but it was still a high qual­ity woollen sock made in New Zealand. At the time there were no other New Zealand-made socks in those mar­kets.”

The ex­port strat­egy to­day is vastly dif­fer­ent. Now it's about get­ting recog­nised in the in­ter­na­tional mar­ket – de­vel­op­ing and mak­ing socks for some of the world's lead­ing brands.

“Brands we cur­rently knit for are KUIU, Norrskov, Kath­mandu, RMW Wil­liams, The North Face and Or­tovox, to name a few,” says Euan. “They un­der­stand our brand and tech­nolo­gies and what we can of­fer.”

It would be fair to say man­u­fac­tur­ing ap­parel lo­cally for ex­port flies in the face of al­most ev­ery trend within the sec­tor in New Zealand. So why has The NZ Sock Com­pany been so suc­cess­ful?

Euan puts it down to the tech­nol­ogy, the R&D, and the com­pany's loyal staff.

He does point out that they have some prod­uct knit­ted off­shore. “We have a fac­tory in China that makes price-fo­cused prod­uct for some cus­tomers in the do­mes­tic and in­ter­na­tional mar­ket.

“And I guess if I was hon­est, it does help sub­sidise our man­u­fac­tur­ing in New Zealand,” he ad­mits.

“How­ever, the mar­gins that we achieve from our ex­port cus­tomers far ex­ceeds what we re­ceive in New Zealand, as this is driven down by big box re­tail­ers.”

Growth strat­egy

The com­pany's strat­egy go­ing for­ward is based on grow­ing within its ca­pa­bil­i­ties and not over-stretch­ing its re­sources. “How­ever, we do have a ma­chine re­place­ment pol­icy that ev­ery year we pur­chase new plant, whether we can af­ford it or not,” says Euan. “This has given NZ Sock the ad­van­tage of hav­ing one of the most mod­ern plants in the world, thus giv­ing us and our cus­tomers a lead­ing edge over their com­peti­tors.

“We recog­nise our com­pet­i­tive strengths – which are our tech­nolo­gies and IP – and we ex­port to Ja­pan, the US, Aus­tralia, Den­mark and Ger­many. Brands that we con­tract knit for have dis­tri­bu­tions in more than 26 coun­tries. So re­ally, we should be say­ing that we have NZ Sock-made socks in more than 30 coun­tries!”

The NZ Sock Com­pany gen­er­ally does its own re­search on new ex­port mar­kets first by spend­ing time in the coun­tries it wants to sell into.

“Then we en­gage the help of NZTE for fur­ther re­search and de­vel­op­ment fund­ing,” says Euan.

“A joint mar­ket­ing ap­proach with key sup­pli­ers has also helped us gain trac­tion into some de­sired mar­kets.”

As for of­fer­ing ad­vice in what is re­garded as a highly com­pet­i­tive ap­parel sec­tor, Euan says ex­port ini­tia­tives should be com­bined with your com­pany's over­all busi­ness plan. “Align ex­port ac­tiv­i­ties with your daily op­er­a­tions and avoid any con­flicts be­tween your do­mes­tic and in­ter­na­tional ac­tiv­i­ties,” he ad­vises.

Un­der­stand the ar­eas where you have a strong com­pet­i­tive ad­van­tage, he says. “These ar­eas may in­clude your tech­nol­ogy or your staff. Deter­mine how best to place them to achieve your goals.

“Also iden­tify any weak­nesses and work to over­come them. Fo­cus­ing your re­sources en­ables you to pro­vide qual­ity re­sponses and service to your new cus­tomers.”

For a com­pany that's been around for so long, things are not about to slow down for this Ash­bur­ton man­u­fac­turer. But when pushed to re­veal what other new ini­tia­tives the com­pany has on its draw­ing board for 2016 and 2017, its CEO was keep­ing some cards close to his chest.

“Now that would be telling! I can say that we are work­ing on some very ex­cit­ing projects with some ma­jor off­shore brands in the sports and mil­i­tary mar­kets,” says Euan.

That's more his­tory in the mak­ing.

The three Spar­row gen­er­a­tions in 2015, (L-R) Gabrielle, the late Cip, Paul and Euan.

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