Friday, May 6, 2016

A Darn Tough Sock

"How to be Darn Tough" by Dan Adams Globe Staff  April 21, 2016

NORTHFIELD, Vt. —A century after the collapse of New England’s textile industry, this factory in the Green Mountain foothills outside Montpelier has become one of US manufacturing’s rare success stories. Cabot Hosiery Mills is growing rapidly, buoyed by lucrative military contracts and surging demand for its Darn Tough Vermont line of outdoor sports socks.

It’s a remarkable turnaround for the third-generation family company, which teetered on the brink of insolvency 12 years ago.

For 25 years after its founding by Ric Cabot’s father, Marc, in 1978, Cabot Hosiery Mills anonymously manufactured “private label” socks for the Gap and other retail chains that would resell them under various store brands. But that business evaporated in the 1990s when the stores shifted production overseas to save money. Cabot, now the company’s president and chief executive, and his father, the boss at the time, laid off 40 workers.

Wasn't that when Bill Clinton was president?

“We were on the front lines of all the outsourcing,” Cabot recalled. “Customers, after years of buying from us, gave us six months notice: ‘I can’t buy from you unless it’s this price.’ And of course you can’t meet it. How can I compete with someone in Asia who’s paying people $10 a month?”

The Darn Tough Vermont launch in 2004 was a Hail Mary. The company by then was months behind on its utility and property tax bills. Cabot took out a second mortgage on his house, begged his bank for one last loan, and pleaded with his remaining employees to stay. The company did almost no marketing, instead giving away socks and hoping the product spoke for itself, but it was the right idea at the right time.

Consumer demand for authentic-seeming, locally made products with a compelling origin story was growing in parallel with the organic food craze, and the durable socks from a group of flannel-clad Vermonters proved an immediate hit in the outdoor sports community. Distribution deals with REI, LL Bean, and other specialty retailers followed, and sales soared.

Meanwhile, with other US sock factories shuttered by outsourcing, a federal law requiring the military to buy domestically produced gear whenever possible helped Cabot Hosiery Mills score several multimillion-dollar contracts to provide Army soldiers with socks.

The war profiteering dates back to the Civil War.

Now the company is gearing up for more growth, planning a new factory building on its Northfield property, formalizing its marketing strategy, and buying more of the $40,000, 168-needle Italian knitting machines that make its socks. The lot outside was built to hold a few dozen cars. Now, 217 employees (and counting) park haphazardly in a muddy field along the rough road leading to the plant.

Cabot said the company is nearly halfway to its long-term goal of $100 million in annual revenue. There’s even talk of expanding its lifestyle line to reach new customers (and retailers) outside its core customer base of outdoor enthusiasts.

The jobs are a godsend for Northfield, which has struggled economically. Flooding from Tropical Storm Irene in 2011 drove Wall Goldfinger, a high-end furniture manufacturer, out of town. Northfield Savings Bank, despite being named after the town, moved its corporate headquarters to nearby Berlin last year, taking 55 to 60 jobs with it. Cabot is now the biggest employer in town after Norwich University, a private military college.


“They’re very important,” said Jeff Schulz, Northfield’s town manager. “It’s a great turnaround story and it’s great for Northfield that they’ve made a strong commitment to expanding here.”

Cabot now feels a responsibility to the town.

“We know what it smells like when you get a second chance,” he said. “And we know our employees are punching the clock for their spouse, their boyfriend, their kids, their elderly parents. They turn around and spend that on local restaurants, property tax, income tax — 217 people is just the beginning of it.”


Darn hard to argue against that.

Related: Giving You The Shirt Off My Back

Time to put on some shoes and go get a Globe.