In 2000, when free-trade agreements and cheap labor were sending U.S. manufacturing jobs overseas in droves, Harry Kazazian went the other way. He and Armen Kouleyan bought a manufacturing factory in Alabama and moved much of his company’s production to the United States. It was the beginning of Exxel Outdoors, which earlier this year purchased a couple of the industry’s better-known brands, including Kelty and Sierra Designs. Kazazian recounts the early days and tells us what’s ahead for the growing company, including more U.S. manufacturing.
What led you to Buy a U.S. factory at a time when everyone else was going offshore?
Although I’m very patriotic, I have to say, it was strictly a business decision. We based it on the fact that labor and freight rates were rising in China, combined with the tremendous potential we saw in the Alabama sleeping bag factory. The plant was closing and laying off their workers, and available for a great price. We were at the time producing bags in Mexico. We at first thought we’d purchase the Alabama factory just for its machinery and ship it to our Mexico factory. But then we went there. The workers all had this undeniable pride in making quality products. The machinery and engineering needed some major upgrading, but had potential. We did a financial analysis and decided that with the right investment in efficiencies and in the workers, we could make sleeping bags in Alabama for a price that competes with manufacturing in China or Mexico. And we knew we could turn out higher quality products, as we’d have more control on our home turf. So all our competitors moved to Asia, and here we are, thriving in the USA.
Exxel has had success in fulfilling the needs for mass-market stores. How do things change now that you’ve brought on board specialty outdoor brands?
What’s different is that now Exxel owns brands serving every kind of camper — from the occasional car-camper to the serious alpinist. This means we’re operating on all levels of design, production and distribution. Since the acquisition, we’ve jumped right in and Exxel is bringing a lot of added benefit to our new collection of brands. The previous private equity firm that owned American Rec did not have a focus on the outdoor industry. By contrast, we’re true outdoor entrepreneurs, and we know we need to really go deep with each brand to understand what resources it needs to be able to deliver leading-edge products to the marketplace. At the same time, we are letting each brand run autonomously, with its own authentic identity and consumer focus.
What are the opportunities and challenges to making sleeping bags in the United States?
The opportunities are tremendous, but it’s a little too early to get specific as to what new U.S. manufacturing opportunities we’re going to pursue first. We’re heartened that our first “Made in the USA” mummy bags shipped to select retailers this spring. Other than that, we’re currently assessing all the products of our brands to determine what resources we can best leverage for domestic manufacturing. The challenges we face, I think, are similar to the other U.S. sleeping bag makers you mention (Western Mountaineering and Feathered Friends), such as sourcing raw materials. In a perfect world, we’d like to source everything domestically. But certain fabrics and fibers that used to be made here are only made offshore now. Another challenge is finding enough factory workers to hire who are trained or even trainable in the most current processes. Since so much of America’s manufacturing has been moved offshore for years, the former factory workers found their way into other fields, and a new crop has not been cultivated.
What can our industry or country do to re-inspire a new generation of people who want to learn a craft and work with their hands?
We need to give them the right educational opportunities that are realistically going to lead to careers. They need to study engineering, especially robotics. This is the “business of their craft” and it’s essential. They need to master what’s called lean manufacturing. It’s about producing things in ways that increase efficiencies and eliminate any waste, to deliver high quality products at a price that is better than, or at least matches offshore manufacturing. We need to encourage the next generation to be leaders in this space. It’s the only way we’re going to bring manufacturing back to America in a meaningful way.