Yeti, the German supplier of down sleeping bags and jackets, has set up a second production unit in the Globetrotter store that moved to a new location in Dresden earlier this month.
With walls and machinery that are mostly transparent, allowing customers to watch the down-filling process, the plant will serve as a powerful marketing tool for the Yeti brand as it bounces back from the devastating floods at its regular production plant last year.
Yeti lost about €2 million worth of stock, machinery and marketing material last October, when its factory of 7,500 square meters in Görlitz, on the Polish border, was suddenly flooded. Yeti lost most of its winter stock and was unable to properly supply its customers for six months.
Production was halted as Yeti waited to hear whether it would get any compensation from insurance companies or the regional and national governments.
When none of this materialized, Yeti's managers decided to clean up the down-filling machines they had just purchased one year before the flood, to rent out a nearby building and to resume production there in March.
The incident required a capital injection of about €2.5 million into Yeti from Nordisk, the Danish group that acquired the German brand back in 2005.
The destruction at Görlitz was damaging for Yeti's sales, since down-filled products make up about 80 percent of Yeti's turnover, and it was hit in its busiest season.
However, Yeti received strong support from its customers, and sales picked up briskly once deliveries started again at the end of March.
In spite of the acute shortage of products from October until March, Yeti's sales still increased by about 40 percent last year and they are budgeted to rise by a further 15 percent this year. Yeti returned to an operating profit again in 2010, for the first time since it was acquired by Nordisk, and should be profitable this year as well, before one-off costs related to the floods.
The devastation was also slightly disruptive for Nordisk, since this Danish outdoor brand's down-filled sleeping bags are made by Yeti. Then again, sleeping bags as a whole make up 30 percent of Nordisk's sales.
The troubles in Görlitz did not prevent the Nordisk brand from lifting its own sales by about 15 percent last year. It was aided by new distribution deals in Europe, along with Japan and South Korea.
The flood came as Yeti was enjoying a strong growth spurt, due to the expansion of its distribution network with several new partners in Eastern Europe, as well as Ark Consultants in the U.K. Germany remains by far the brand's largest market, making up about 60 percent of its turnover.
Two more countries are to be added this year: in Norway Yeti will be sold by Ute Depot, which handles Ortlieb, Exped and Tubus, and which already distributed the Yeti brand before it was bought by Nordisk; and in France both Yeti and Nordisk are to be sold by Eleven Outdoors, a new company established in Annecy, which quickly obtained deals with Direct Alpine, Grand Canyon and Barigo.
The growth at Yeti was also partly triggered by its range of ultra light-weight down products, particularly an adult-size sleeping bag weighing just 280 grams and taking about as much space as two oranges ; and a women's down jacket weighing just 190 grams.
The transparent production plant at the Globetrotter store has a capacity of about 5,000 sleeping bags per year, compared with some 13,000 in the rented facility in Görlitz. The plant covers about 218 square meters in a store of more than 6,200 square meters.