Sharechat Logo

Icebreaker inks $100M 10-year supply contract for NZ merino wool

Friday 10th November 2017

Text too small?

Merino outdoor clothing company Icebreaker has signed the longest ever supply contract with growers of New Zealand merino wool, worth $100 million over 10 years.

The Auckland-based company, which announced this week that it is being bought by US-based VF Corporation, has inked agreements with New Zealand woolgrowers in collaboration with wool marketer The New Zealand Merino Company to ensure it has long-term supply of the fibre. Pricing will be at a premium to market prices to recognise long-term grower loyalty and to enable Icebreaker to use farm imagery and storytelling in its global marketing campaigns, Icebreaker said in a statement.

The company's link with New Zealand merino wool goes back to 1994 when founder Jeremy Moon tried on some prototype thermal merino clothing that had been developed by a merino sheep farmer on Pohenui Island. Today its clothing is sold in 47 countries through wholesale, branded retail and e-commerce platforms and merino wool is in hot demand by manufacturers worldwide.

For Icebreaker, the new contracts give it security of supply of the fibre and provide end consumers with a link back to growers, enhancing its brand. New Zealand sheep farmers benefit from the deal by gaining certainty to underpin production, avoiding the potentially volatile spot market pricing for commodities.

NZ Merino Company chief executive John Brakenridge said the contract is a further endorsement of its business model.

"In partnership with Icebreaker and our growers, we have pioneered forward wool fibre contracts to provide greater price certainty and stability," Brakenridge said. 

Last year, The New Zealand Merino Company heralded the signing of a five-year $45 million deal to supply fine merino wool to Italian luxury fabric manufacturer Successori Reda, which was at the time its longest-ever contract.

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting
Scales Corporation - Business Update
Fonterra Co-operative Group Global Dairy Update
Fonterra revises its 2019/20 and 2020/21 forecast Farmgate Milk Price ranges
Briscoe Group Limited Market update: 2nd Quarter Sales to 26 July 2020

IRG See IRG research reports