The dream of an employee-owned, benefit corp Kitsbow is ending.
It is devastating and disappointing – in ways that words cannot possibly convey. Terrible for our community, Old Fort and McDowell County, North Carolina. In each of the past three years, Kitsbow injected an annual payroll of approximately $2 million dollars into a rural town previously in economic decline for 30 years. Our presence sparked a resurgence of employers – two manufacturing operations have since followed to Old Fort, adding more jobs to the local economy.
This is also terrible for our investors, new and old, and a blow to the tiny segment of our industry that is attempting to make apparel in the U.S. instead of overseas as 98% of the clothes sold in the U.S. are made.
But most of all, it is the end of a dream for our employees, 30,000 customers, and thousands of supporters for our vision of making clothes in a new way that respects the worker and pays a living wage (with benefits).
Our apparel industry is deeply broken, and like to think we were showing that there was a different way: made local, respecting artisan skills, paying a Living Wage, and working together as a community. Our crew made 17,000+ garments during 2022 right here in the U.S., and we humbly hope that we have changed minds about the way clothes have to be made and by whom.
We’ve greeted each day for the past three years, and especially in the last 15 months of employee ownership, intent on making more clothes, truly living our values, and bumping up the Kitsbow brand with intention and thoughtful actions. We have been stewards of the planet, of our community, and of you, our customers and partners.
Each and every one of you helped this dream grow into a new kind of factory and a unique brand. Our investors and our customers stepped up to help when we asked. You bought products, encouraged us, championed us, and invested in us.
Why is this happening?
Because in our short 15 months of existence as a re-booted company (January 2022), we could not get enough operating capital to grow.
Specifically, our recent Community Round of Financing (via WeFunder) raised about 50% of the $1m target. While we used what we raised to launch new marketing programs and cover some operating expenses, we really needed the full $1m to survive and grow.
We are deeply grateful for the immediate and intense support of our investors – nearly all customers. But sadly and inevitably: it wasn’t enough.
We kept up an optimistic presence in the world as long as we could – while behind closed doors, we bit our nails, racked our brains, tightened our belts repeatedly and shook down every bit of our operation for increased value and efficiency. With the funds from our Community Round of Funding, we created new marketing and retail programs that have just started to bud: Share the Love, Experienced Apparel with Treet, and about-to-be-announced Retail Partners in Raleigh, Minneapolis, and Seattle. All poised to ramp up new customers to Kitsbow.
As we close this chapter, we know for certain that we are more efficient, more productive, and with higher margins than ever before in our 11 year history – but we simply have to accept the current economic environment that smothers raising capital. We found that “impact investors” were drastically reducing their investments (as did all of the venture capital).
And we did everything humanly possible to avoid this outcome, including talking with new investors, exploring partnerships with other brands, and offering the possibility of purchase by other brands (and not being fussy about price). The economy has made all of those alternatives impossible. The brands that could truly appreciate the Kitsbow manufacturing expertise were also among those the most financially-constrained by their own challenges. In other words, apparel is tough.
Some have asked if we could survive for another day as a smaller company – we considered this, but couldn’t survive without enough highly-skilled Cutters and Makers, customer service, and marketing personnel. Our work takes a minimum of our current staffing. We’re at our minimum point (about 40 full-time employees).
We are saddened to realize that the hum and thrum of 100+ sewing machines will soon cease in Old Fort.
Pride
The leaders at Kitsbow are deeply proud of what this team has done in the last 15 months as a benefit corporation:
- First-rate marketing and merchandising on a shoestring budget. Unlike almost every other apparel brand in the U.S., our team increased our apparel sales by 10% in 2022 over 2021. It is startling that this was done without using paid ads. Our email campaigns are the envy of many.
- A production operation that increased efficiency dramatically in 15 months, with decent margins, would have supported a break-even business. The team proved that one-piece flow meant good margins even while paying a Living Wage.
- We made 16,000 garments in 2022, and was on track to make at least 25,000 this year. This team made more clothes than any other apparel operation that uses one-piece-flow.
- Our transition to Just-in-Time Inventory in 2023, combined with Made to Order for a rich selection of 5,000 SKUs, worked for customers, and could become a model for U.S. Made apparel in the future by other brands. All is possible because of the team’s excellence in production. Few of whom knew how to sew when they arrived.
- We built and operated the only data-driven software system for production planning of one-piece-flow apparel in the world. This technology has served us every workday for the past three years, and is an amazing accomplishment in its own right.
Kitsbow proved it could be done but ran out of time to prove that it could be done profitably.
And, of course, there was The Pandemic. Kitsbow was among the first to pivot to making PPE for first responders and medical professionals when N95 masks were not available because we had a factory, we had in-house design (most apparel brands do not), and we had raw materials. We also designed an incredibly comfortable mask with near-N95 filtering, well, because that’s how we design and make our amazing apparel.
We were lauded in the media, collaborated with Wake Forest University on an innovative mask, and were invited to testify in Congress. We know that we saved lives, and it mattered. Our team considers this one of our finest moments. 63,000 customers for masks apparently agreed. We were lucky to serve our community and the world in this way.
The Next Two Weeks
We will remain open for business and pay our employees for at least another two weeks as we finish existing “Made to Order” purchases and ship these out to customers.
This should take about 10 days of production. We are planning our last day of production on or about Friday, April 7.
Effective immediately, there is a major sale of the 7,000 items in inventory, ranging from beautiful Icon wool shirts to the now-classic Kitsbow coffee cups and other accessories.
Since there is no buyer for the business, and no one else makes apparel using one-piece-flow, we believe this is the final time you will ever be able to purchase Kitsbow.
First come, first served. Everything is marked down 20%. No returns, no repairs, no warranty work, and all sales are final.
The Old Fort Ride House is closed permanently for food and drink sales, but will be open tomorrow at 8:00 am for product sales.
Please be patient with our Customer Experience folks, as they will be overwhelmed with requests as they send customers long-awaited refunds, help with sizing questions (all sales are final), and help us all through this difficult time.
RECRUITING OUR ROCK STARS
We have 41 amazing, high-performance employees with numerous skills, tremendous resilience, and the ability to problem-solve and communicate with each other as an effective team in a manufacturing environment. Those of you who know manufacturing know how rare this is…
We also have stellar marketing, customer service, and retail talent – and each of these rock stars can work remotely from their homes in North Carolina. This is a stellar brand, and that is because of these incredible individuals.
If you have an open opportunity or a need for a rockstar, please send an email to jobs@kitsbow.com, and we will make sure your open role gets to the right people on the Kitsbow team!
The End But Not The End
The Leaders at Kitsbow hope that each of you will continue to spread the word about the fine work done by the team at Kitsbow.
We can’t go on, but we don’t want the movement of benefit corporations and respect for the worker to slow. Values that we all can embrace are nearly within reach of any apparel company. Please use your purchasing power to vote for brands that matter.
And in the years ahead, please give the nod or a wave when you see someone wearing Kitsbow in the wild. Durable Kitsbow gear will last for years to come, and every use of each garment is a reminder that this journey mattered to you and to us.
Love & Gratitude,
David Billstrom for the Team at Kitsbow
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