By Eric Peterson | Oct 13, 2014
Steamboat Springs, Colorado
Steamboat Springs, Colorado
CEO Peter Duke makes a better wool sock for eight markets, and Point6 is hitting its stride after reshoring production from Asia to the U.S.
After working in snowsports education at Heavenly Mountain Resort near Lake Tahoe, Peter switched gears in 1994 and started SmartWool with his wife, Patty. "Rather than moving up in ski-industry management, I decided to start my own company," says Peter.
The Dukes subsequently built the SmartWool brand from Steamboat for a decade before selling it to the VF Corporation in 2003, then waited out a noncompete clause before getting back into the sock business with Point6 in 2008.
Peter says the Point6 brand is defined by "quality -- taking where we left off with SmartWool and building a better sock."
Named for 98.6 degrees F, Point6 utilizes only compact-spun Merino wool yarn -- a much tighter yarn than ring-spun yarn -- making for a much more comfortable and warmer sock. The wool is woven into a "matrix, or tic-tac-toe box," says Peter, to create a form-fitting product.
Contact spinning "increases durability without giving up comfort," says Peter, but it wasn't easy to master in a mass-production setting. "We had some production issues and now we've overcome that," he notes.
The problems stemmed from reshoring manufacturing from China to a contract facility in Tennessee. Point6 launched with domestic production, moved it offshore in 2010, and brought it back to the U.S. in 2012. "Moving production from China to the U.S., it's not easy," Peter says.
The original issue was the domestic hangup making seamless toes. "That is why I originally went to China," says Peter. "It's labor-intensive."
But returning production to the U.S. meant he had to find a partner that could deal with a slew of different setups. U.S. manufacturers have specialized in high-volume, commodity hosiery, so it involved getting the workers up to speed.
In the U.S., notes Peter, "If you ran one color, one style, 12 months a year, life was easy. Constantly making changes -- that is the issue."
And that's especially critical for Point6, because the company makes eight categories of socks -- active, cycling, lifestyle, outdoor, running, skiing, snowboarding, and boot, or work, socks -- totaling nearly 1,000 different SKUs.
Skiing and outdoor socks are the top-selling categories and growing at the fastest clip, says Peter. "Cycling and running will take a little time to convince them to move away from synthetics to wool socks," he adds.
Now that the company has cleared the production hurdles, Point6 is enjoying 40 percent sales growth in 2014.
The current focus is on the existing product line, but Peter is eying a longer catalog in two years. Due in early 2016: base layers. New technology is in the works that will enhance the wool with synthetic fiber, he adds. "At the end of the day, it will be predominantly wool -- 70 to 75 percent wool."
Challenges: Now that the company has overcome the production issues associated with reshoring, Peter says Point6's major challenges have been cleared -- for now. "It's onward and upward," he says. "I'm sure there'll be more challenges -- with growth comes new challenges."
Opportunities: Streamlining the supply chain. "We are in the process of buying the wool directly from the New Zealand farmers, totally unlike what our competitors, SmartWool and Icebreaker, are doing," Peter says. "I've handpicked farmers in New Zealand in a very specific area called the Mackenzie Range. They grow the best Merino wool in the world."
This is a key play, he says, due to wool market dynamics. "The wool supply is dropping and demand is rising. Companies that align themselves with that will be able to successfully move forward."
Needs: "Capital is always an important component to growth," says Peter.