On March 9, news arrived that Ibex, which ceased operations last November, had been sold to Flour Fund, a New York-based group led by David Hazan, a marketing expert.
Flour Fund is made up of a group of investors with deep roots in the licensing and branding world. Hazan notably exited the marketing agency he founded, Escalate, after he sold it to marketing giant Acosta. Flour Fund’s portfolio includes Quirky, acquired in 2014; Skora, the minimalist running footwear brand acquired in 2015 and the Lilly Drone IP, acquired in 2017. Flour Fund continues to thematically acquire brands it believes have a strong community element.
Ibex, which specializes in wool garments and is based in White River Junction, Vermont, ceased operations following a move to shut down its wholesale operations to focus on retail. In early January, an auction was reportedly held for the brand, trademarks, domain names and customer databases. Sales have reportedly been around $20 million over the last few years.
Flour Fund is still finalizing Ibex’s management structure and whether the brand will maintain a presence in Vermont. SGB Exec talked to Hazan, principal at Flour Fund, to explore what’s next for Ibex.
Can you tell us about the sales process? Was there an auction? If so, what delayed the closing?
DH: Yes. There was an auction; there were other bidders. In terms of what delayed closing, learning more about the merino space, and the intricacy and detail that goes into maintaining the quality control for Ibex, we needed to really feel like we were up for it. We think the other bidders were challenged in the same way. Ultimately we saw extreme value in the community and admiration for the product itself to take on the challenge and move fast.
Why did Ibex appeal to the Flour Fund?
DH: Community, This is thematic in how we buy brands in general. Above everything, we acquire communities. A truly great brand to us is literally built by its community, and Ibex was clearly community-built. This was obvious in our discussions with the team, and in how much they spoke about Ibex from the community’s perspective rather than a management-oriented one. It was impossible to have any conversation about any part of the business without community anchoring it. This was a great sign for us.
What makes the Ibex community special?
DH: It’s tough and unfair for us to talk about the community thoughtfully, in terms of what makes them who they are. Our reference point is the fact that the team centered every single conversation around the community. They genuinely cared to communicate to us everything we needed to know to do right by the community that had done right by Ibex all these years.
A few things that jump out, though, are the obvious. The Ibex community knows great product. They have an unfair advantage in this world of fast-fashion and mass consumption by appreciating the incredible properties of merino. These are the types of people we love to make products for.
Perhaps most importantly, the ability for the team and community to connect on something outside the product in a profound way. The respect and love for dogs the team and community got to bond over is something difficult to find elsewhere. Where do you find a team that connects with its community outside the brand or product? These connections were every much a part of the brand as the products being made.
Ibex has faced growth challenges and so have some of the other brands Flour Fund has acquired. Is Flour Fund’s investment focus on such “fallen angels”?
DH: We have a mantra at Flour Fund. Don’t fail for the wrong reasons. When we find this starting to be true about a brand, that is usually a signal for us to get involved. We do a great job of infusing the right reasons for success back into the company fairly quickly.
What is a wrong reason?
DH: Literally any time or resource the brand is using that does not contribute to growth. These things can be sneaky and sometimes invisible to the team itself. We do a good job of recognizing these patterns, and more importantly, reversing them.
What’s your initial plans for Ibex?
DH: To start, DTC will be focused exclusively online while we roll out a global retail plan. Stay tuned.
As for licensing, as mentioned in the press release, we are deeply rooted in that world. We will look to license categories where merino would contribute to a significant performance outcome and nothing short of that. We are in the process of evaluating what these opportunities look like and encourage potential licensees to reach out to us if they have something special to contribute. We are making a big push into global and encourage anyone to reach out who can be valuable to that end.
When will ibex make its return?
DH: We are aiming for Fall 2018.
Photo courtesy Ibex