Merino & Co eyes global expansion after iconic brand makes strong ASX debut

Australian wool company Merino & Co (ASX: MNC) has made a grand entrance on the Australian Securities Exchange following a $6.3 million initial public offering.

The company’s stock debuted on 30 October at $0.20 per share and experienced an immediate 17.5% boost, closing its first day of trading at $0.235.

Less than one week after listing, the shares have rallied to a high of $1.50.

Iconic brand

It was not an unexpected market response for the iconic brand, which has grown from a humble wool clothing and accessories business to supplying locally-made luxury wool products to meet domestic and international demand.

Since opening its doors in 2013, Merino & Co has received strong support from the Australian Wool Network (AWN), one of the nation’s largest independent wool marketers.

AWN has a network of over 10,000 Australian farmers supplying the fine merino wool needed to sustain Merino & Co’s business and support its future growth strategy, which includes plans to target markets in the US, China and Europe through strong e-commerce, retail and wholesale channels.

Joining forces

Mr Kang and Ms Yue founded Merino & Co by combining over 40 years’ experience in the cashmere and wool industries.

Both were previously involved in the management and operations of Kingdeer and Erdos, two of the world’s largest cashmere producers.

Mr Kang’s expertise lies in trade, manufacturing and supply chain optimisation for cashmere and wool products, while Ms Yue has experience in strategy implementation and partnership development.

The company uses factories in Perth and China to produce scarves, shawls, sweaters, coats and throws under the Australian-made Merinosnug and China-made Auzwool Family brands.

Points of sale

Merino & Co currently has over 600 points of sale across Australia including its own showrooms, boutiques, duty-free shops, airport stands and tourist sites.

It has also been exporting and selling directly to international markets such as Japan and North America, where quality wool products are in high demand due to colder climates.

Ms Yue noted demand in some sectors for high-quality undergarments with merino wool’s attributes, such as breathability and softness.

She said the company plans to invest in this idea, aiming to launch a range of socks and leggings to meet market demand.

Thermotextile project

Merino & Co is part of a research and development project with Queensland University of Technology and the University of Queensland to develop wearable thermoelectric textiles for personal heat management.

Co-funded by the Australian federal government, the project aims to make the textiles wearable and eco-friendly by incorporating low-emission heating and cooling solutions.

The team hopes to double the current output power density of thermoelectric fibres to power wearable electronics or provide heating and cooling for clothing in commercial applications.

Merino wool market

Australia is the world’s largest producer of merino wool, accounting for an estimated 80% of the total 304 million kilograms produced globally in 2023.

It is the only significant exporter of superfine wool grades, making up over 60% of the global wool trade by value.

The global apparel retail market (including footwear) was estimated to be worth $2.58 trillion at current retail prices and is forecast to increase by 11.7% to $2.96t in 2028.

In Australia, the apparel retail market was estimated at $27 billion in 2023 and is forecast to grow to $27.4b by 2025.

The global merino apparel retail market was estimated to be worth $730m in 2023, up from $610m in 2018 and is projected to reach $780m by 2025.