Economist: Smartwool departure a ‘hiccup’ in local outdoor recreation industry
[swift-infobox title="By the numbers"]
Economist and city council member Scott Ford calculated the following estimations based on an assumption that 75 employees working at the company earn an average of $75,000 a year. These are only estimates and are not based on confirmed data.
- An estimated 75 Smartwool employees likely make around $5.6 million in payroll earnings. This is about 1.2 percent of the Steamboat metro area’s earnings.
- This amount of pay would represent about $2.8 million in local spending. The loss of these sales is estimated to reduce the city’s sales tax revenue by less than a half percent.
- Smartwool employees support an estimated 10 to 11 full-time equivalent jobs, bringing the total loss of jobs to about 80 to 85. This represents about 1.3 percent of total year-round, full-time employment.
Editor’s note: This story was updated at 8 p.m. Wednesday to include a quote from Smartwool staff.
STEAMBOAT SPRINGS — From an economic perspective, the silver lining in Smartwool’s move to Denver is that the company is staying in Colorado.
VF Corp., the company that owns Smartwool, is splitting into two publicly traded companies. VF will continue to operate its outdoor, activewear and work-wear brands. A new company will be formed to operate VF’s denim brands, which include Lee and Wrangler jeans.
This change left VF with no brand ties to the company’s headquarters in North Carolina. The company began to seek a new location for its outdoor brands Smartwool, Altra, The North Face, Eagle Creek and JanSport.
On Monday, VF announced these brands would be co-located in an office in the Denver metro area within the next two years. VF’s Denver office is expected to employ 800 people in high-paying jobs.
Should all 800 positions be in Denver by 2026, the company would earn $27 million in job growth incentive tax credits from the Colorado Economic Development Commission. Of these, $13 million are transferable and can be sold to other companies.
“The reality is we were competing with other states for this move,” said Luis Benitez, director of the Colorado Outdoor Recreation Industry Office. “We did not approach VF; VF approached us.”
He said his office discussed the fact that Smartwool was already located in a rural Colorado community, but the business decision was ultimately up to VF.
“Did they consider it carefully? Absolutely,” Benitez said. “But then if you look at the larger context of things, they’re moving The North Face, which has been in California for 52 years.”
Economists can make their best guesses at how the reduction of jobs will impact the area. Other things are unclear, such as how the loss of sales tax revenue, philanthropic dollars and the absence of Smartwool employees’ children in the Steamboat Springs School District will impact the community.
Smartwool President Jen McLaren said the brand hopes to continue to support the community in advocacy, community service engagement and support of local clubs.
“When it comes to economic impact, we’re not totally clear what that consists of,” said John Bristol, economic development director for Routt County and Steamboat Springs, about Smartwool’s impending departure.
There is also an immeasurable impact of stress on the families of Smartwool employees as they face tough decisions, Bristol said.
“We as a community have to embrace our family and friends that work there as they face this because it’s going to be a tough transition,” he said. “We need to embrace them and care for them as much as possible and find opportunities to be supportive.”
Economist and Steamboat Springs City Council member Scott Ford said Smartwool’s move is not the end of the world.
“It’s not a dark and gloomy day for Steamboat’s economy. It’s a hiccup,” Ford said. “Stuff like this happens. You prepare for it as much as you can. You work diligently in having a diverse and broad-based economy, and we do.”
Smartwool representatives, Bristol, Benitez and Steamboat Springs City Manager Gary Suiter all have emphasized that Steamboat still has a booming outdoor recreation industry.
“The Smartwool move could pose a huge opportunity for some of the smaller local entrepreneurial companies,” Molly Cuffe, Smartwool’s director of global communications wrote in an email to the Steamboat Pilot & Today. “While we are saddened to think of our team separating, the reality is not all of them will move with Smartwool, which means if there is a company looking to scale, there will be some highly talented individuals with some great growth experience in the marketplace.”
“Everybody recognizes and knows that Steamboat is a tremendous place for outdoor rec companies,” Bristol said. “We’ve got the best (research and development) facilities, and when I say R and D facilities, I mean we’ve got this amazing ski area. We’ve got a tremendous community. We’ve got the backcountry. We’ve got this wilderness. There are great locations for our outdoor rec companies to operate and not have conversations around the water cooler but have conversations around the campfire and really be creative and innovative.”
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