On the heels of a very successful Outdoor Retailer show, the SmartWool team was brought to earth with news that internal testing of the 2003 base layer program had revealed fabric failures, necessitating a recall.
Retailers began contacting SNEWS early Wednesday and we quickly contacted SmartWool's Scott Weir, vice president of operations for the company, who confirmed the recall notice.
Weir told us that they are investigating what happened and while the company doesn't wish to speculate on exactly how the defects occurred, they are quite sure the problem originated in the Chinese factory where the goods were manufactured.
"This was a very difficult decision for us on one hand, but ultimately, it was the right decision to ensure that no consumer had a bad experience with our product line," Weir told us.
While very few retailers had yet received the new product, making the recall easier, those who had received shipments are being issued return authorizations.
"We want to be sure that we make this recall as easy for our retail customers as we can and that they are not financially impacted by this, other than by the loss of product to sell," Weir told us.
According to retailers who contacted us, reps are telling their dealers that the factory in China appears to have cooked the wool during the processing, causing it to dramatically pill and in some cases, actually fall apart after several washings.
Because of the recall, the following products are not available at all for 2003: Aero-lite and Thermo-Weight base layers, as well as the Beanie, Balaclava, Neck Gaiter and Headliner.
Thankfully for SmartWool, Versawear, Latitude, Aero-Pointelle, Bodywear, gloves, scarves and socks are made in different factories and are not affected by the recall.
SNEWS View: This has to hurt, no question, but fortunately, the crown jewels of the company, its sock line, were unaffected. Where this will really hurt is on the progress the company has made leveraging itself onto retailer shelves as a strong part of retailers' base layer programs. Now retailers will be scrambling to fill in with other lines, and may be reluctant to shift back to SmartWool if the other lines deliver and sell through well. That said, we would expect retailers to benefit tremendously in the months ahead from some very attractive programs from SmartWool to entice them to give the company another shot -- and given the traditional quality of product from SmartWool it is likely most will give the benefit of the doubt.