Smartwool announces headquarters will move to Denver
August 13, 2018
Editor’s note: This story was updated at 8 p.m. This story was corrected at 8 a.m. The city manager of Steamboat Springs is Gary Suiter.
STEAMBOAT SPRINGS — Smartwool employees are still processing news of the company's planned move from Steamboat Springs to Denver.
"It's a very sad day to have to move out of this amazing community that we have here in Steamboat," Smartwool President Jen McLaren said.
Over the weekend, Smartwool's parent company, VF Corporation, told company leadership that the brand's headquarters would be relocating to the Denver metro area within the next two years. Employees and city and county officials learned of the move Monday morning.
"This was really a VF decision, first and foremost, and it is a strategic decision that was made by the senior leadership team," McLaren said.
VF Corporation owns the outdoor brands The North Face, Altra, Eagle Creek and JanSport. These companies will relocate with Smartwool to a yet-to-be-identified location in the Denver area. This decision is intended to increase collaboration and connectivity between brands, McLaren said.
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About 70 employees work at Smartwool’s Steamboat headquarters. They will all be offered jobs in Denver with relocation support, McLaren said. She added that the company will support them if they choose not to relocate, too.
The company is working through the details of the move, and it is not clear what kind of benefits would be offered to employees who choose not to relocate. Director of Global Communications Molly Cuffe said both VF and Smartwool are "people-centric" organizations, and Smartwool will be offering trips for employees to explore Denver.
"I think it is a very positive move, a very strong move, from that sense, and it comes from a really well-intended place," McLaren said. "Unfortunately, we're obviously very saddened about the decision to leave Steamboat."
McLaren said Smartwool looks to move within a 12-month period.
Connected to its roots
"Steamboat is our home and where the brand was founded," McLaren said. "We're incredibly ingrained in this community," McLaren said.
She said the company hopes to keep ties to Steamboat.
"We recognize that Steamboat is so critical to our brand, and we want to continue to support the community in as many ways as we have — from advocacy efforts, community service engagement and support of clubs like the (Steamboat Springs) Winter Sports Club," McLaren said. "Those are things that we're absolutely talking about wanting to continue — to have that strong support of Steamboat, the way that Steamboat has been an amazing support community for our brand for so many years."
She said Steamboat offered the "best of both worlds" by providing employees with a professional career and a home life in a mountain town that's closely connected to the outdoors.
The move comes as VF leadership announced its intention to split into two publicly traded companies. VF will maintain control of Smartwool, Vans, Reef, Timberland and the company's other outdoor, active wear and work wear brands. A new, unnamed company will operate VF's denim brands, Lee and Wrangler jeans. This change left VF with no brand ties to the company's headquarters in North Carolina.
"They did a search of where they should be within the outdoor industry, and to no surprise, they came up with Colorado," McLaren said.
The Denver Post reports that the Colorado Economic Development Commission will give VF $27 million in job growth incentive tax credits, of which $13 million could be sold to other companies.
VF CEO and president Steve Rendle said in a statement that the company "will match every dollar it receives in tax incentives" in a donation through its own foundation to charities in Colorado.
"It's great news for the state of Colorado and sad news for the city of Steamboat Springs," said City Manager Gary Suiter.
He said the company has had a great relationship with the city.
Economist and city council member Scott Ford estimated that Smartwool's approximately 70 employees spend about $2.8 million locally, which equates to a decrease of less than a half percent in city sales tax revenue. He estimates that the company's employees' spending supports about 10 or 11 full-time equivalent jobs in the community, creating a total loss of 80 to 85 jobs. He added that the greater Steamboat metro area has over 6,500 full-time year-round jobs.
"What we lose is a community member and employer that has been highly involved socially with us" Ford said. "Some of the employees will not leave and so we're able to retain some of that social and human capital, and it provides an excellent opportunity … for employers to recruit some very talented and loyal staff. That's good news."
Smartwool currently leases office space in what was formerly a Steamboat Springs Airport terminal. The company’s lease with the city continues until 2022.
City attorney Dan Foote said the company's lease included allowing for early termination. Smartwool's rent of $26,883 per month included rent and payments to the city for improvements made to the building, he said.
Within the provision allowing for early termination, Smartwool will be required to pay off the remaining balance. Both Suiter and McLaren said Smartwool is committed to fulfilling these financial obligations.
Suiter said Smartwool told him they would assist in whatever way they could to help the city locate a new tenant.
Both city leaders and Smartwool said Steamboat is a great location for businesses in the outdoor recreation industry.
"I want to make sure the community recognizes what a great place this is for outdoor recreation businesses," McLaren said. "There's a great little hub of small brands, especially entrepreneurial brands that have called Steamboat their home."
Suiter said Steamboat is a leader in outdoor recreation.
"We have a great reputation for our mountain location and lifestyle," he said. "I think there is a great opportunity for local companies to continue to grow and thrive here, as well as attracting new business. I'll keep looking up."