Icebreaker sells to US retail giant
Icebreaker chairman Rob Fyfe says the marino wool clothing company considered more than 24 serious offers to buy it before doing a deal with US retail giant VF Corporation.
Yesterday North Carolinabased VF, owner of The North Face, Vans and Wrangler brands, announced it was buying Icebreaker for an undisclosed sum.
Fyfe said VF was the chosen because it could lift the brand’s worth to $1 billion by entering new markets that Icebreaker had not yet been successful in, such as the United States, Asia and Eastern Europe.
Fyfe said VF was committed to keeping Icebreaker’s head quarters in New Zealand and the sale would not affect its 340 fulltime staff, 30 per cent of whom were based in New Zealand.
If the sale lifted Icebreaker’s sales by at least 16 per cent each year, the clothing would also become cheaper, Fyfe said.
‘‘We could double the size of our business in the next five years. That would have a material impact on … unit prices.’’
But it would take a few years for the benefits of the sale to be felt in the market, he said.
Fyfe said under VF ownership Icebreaker would open more stores in places it was already popular, such as New Zealand, Australia and Canada.
That would create more New Zealand sales jobs, he said. ‘‘Retail is about building our presence in a market, not spreading yourself across too many markets.’’
As former chief executive of the company, Fyfe said he had brought more business discipline to Icebreaker, making it look a bit more ‘‘ grown up’’ to attract a multinational buyer like VF.
Exit Strategist director Ross Peden said business leaders needed to spend about three years tidying up a business to make it look presentable to buyers, ‘‘much like selling a house’’.
Peden said the process for international acquisitions of New Zealand companies was typically ‘‘pretty clinical’’.
Overseas corporations came to New Zealand with ‘‘tens to hundreds of millions’’ to spend but only bought companies that had the ability to make them a lot of money within a few years, he said.
KPMG head of deal advisory Ian Thursfield said the Icebreaker sale was an ‘‘exception’’ because it was uncommon for international corporations to buy New Zealandbased retail brands.
‘‘Generally the acquirers are after the power of the brand, rather than the retail operations themselves.’’
Icebreaker was founded by Jeremy Moon in 1995 when he was 24 years old.
Peden said business owners typically looked to sell their companies at about age 55 as a retirement strategy.
He said founders had to be mentally prepared to sell their business, which could take years.
It was not uncommon for a founder to continue an active role in the company to get to the stage where they wanted to leave it.
Moon will continue his role as Icebreaker founder, and Fyfe will stay on as chairman, after the VF sale is completed early next year.
Peden said New Zealand brands selling to multinationals was ‘‘a little sad’’ but Icebreaker’s ‘‘amazing story’’ could encourage other business owners to think about their exit strategy early.
Fyfe said the sale was not a loss, but a global opportunity gained for a New Zealand company.