Heavy DutyMonday, November 27, 2006
Jaeger's father worked in the light construction industry, but the chief executive admits he didn't get the idea of building a better work glove until visiting a business associate on a job site in the late 1990s. An entrepreneur with a flair for spotting voids in the marketplace, he had just licensed a line of ceiling fans for children and was looking for his next project. It was immediately obvious to him that the gloves in use on the site were antiquated, considering the varying tasks at hand.
In a departure from his usual practice, Jaeger opted to pursue outside investors to help launch his glove line instead funding the business by himself. "It was a big step for me to take other people's money, but I knew letting go of some control was the only way to take this company as far as I knew it could go," he said.
Then to fund expansion and the launch of the new outwear line, Jaeger took the company public in May via a reverse merger coupled with a $7.3 million private equity offering. The 29.6 million in outstanding shares tend to be thinly traded on the Over-the-Counter Bulletin Board, with the share price hovering around 72 cents last week for a market cap of $21.3 million.
(Sales increased 47 percent in the third quarter of 2006 to $2.37 million, with the company reporting a loss of $524,000, which included expenses related to stock options and product launches.)
While Ironclad has hopes of gaining a greater share of the home improvement market, Marshal Cohen, chief industry analyst with the market research firm NPD Group, cautions that innovative consumer product companies can be hard-pressed to fend off copycats targeting customers more concerned with price point.
"Any kind of success in the (apparel) industry breeds competition," Cohen said. "The original company may be able to hang onto its niche, but real growth in the industry is going to come from a less expensive, less technologically evolved version."
Indeed, there are dozens of competitors in the overall work glove market and an increasing number of cheaper performance gloves. Ironclad, which has more 50 patents, trademarks and copyrights, employs a variety of means to protect its intellectual property and strengthen customer loyalty.
The company often sends new products to magazines such as Handyman, which has its readers give the gloves test use and incorporates suggestions into later versions. And one of its most effective efforts is the customer feedback postcard attached to each pair of gloves, asking buyers how many Ironclad products they own, how they use them and any suggestions for new styles.
One result of the feedback is the planned expansion of its women's line. Only one home projects glove called the Evolution is specifically designed for the contours of a woman's hand, but the company has added an extra-small size to several professional glove styles. Now more specially designed lines are under development.
Retailer Micah Hayes is a happy customer. While Ironclad's prices are higher than the competition, he believes the gloves ends up costing his customers less over time. Hayes is manager of High Country Lumber in Mammoth, and said he's only had Ironclad returns twice in three years.
"About 85 percent of my customers are in the contracting business and they don't want to be changing out gloves every two weeks," said Hayes, who owns four different Ironclad styles himself. "They'll pay for quality."
Ironclad Performance Wear Corp.
Designing and manufacturing specialized work gloves and outerwear
Employees in 2005: 17
Employees in 2006: 25
To solidify its leadership in high-performance professional work glove niche and expand its technology into the consumer mass market
Desire of trade workers to have hip but functional work gloves that improve their performance
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