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Jan. 21, 2003 — There won’t be less nano in Nano-Tex under the leadership of its new chief executive. But there will be more emphasis on textiles as apparel industry veteran Donn Tice steps up efforts to make the startup a brand name and eventually a ticker symbol.
In the world of fabrics and fashion, Tice’s past associations with companies like Tommy Hilfiger Licensing Inc. and Polo Ralph Lauren, specialty retailers, overseas supply partners and mills should help Nano-Tex LLC navigate the competitive textile industry, analysts say. Nano-Tex, which offers nanoscale attachments to fibers to make fabrics stain or wrinkle resistant, water repellent or more comfortable to the touch, expects to benefit from Tice’s financial connections and licensing acumen as well.
But as the bankruptcies of Nano-Tex’s majority owner Burlington Industries Inc. and Tice’s former employer Winterland Productions Ltd. show, it is a marketplace that’s battered by global competition, economic sensitivities, trade issues and currency fluctuations. Like Burlington, Tice is betting that Nano-Tex’s performance will give it an edge in 2003.
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“Nano-Tex has a really strong underlying science,” Tice said. “That’s one of its great strengths — its basic science skills and experience with textiles. That gives us a competitive advantage.”
Tice replaced George Henderson III on Jan. 7 as Nano-Tex’s CEO. Henderson, who serves as CEO of Burlington Industries in its North Carolina-based headquarters, will remain as Nano-Tex chairman. Tice will work in Emeryville, Calif., where founder and former chief scientific officer David Soane originated the startup. Soane, who also oversees the nanotechnology startups Alnis Biosciences Inc., Innovative Construction and Building Materials and Cosmetica, is now a Nano-Tex director and chairman of the scientific advisory board.
Soane and Henderson agreed that Nano-Tex needed a full-time CEO after Burlington filed for Chapter 11 bankruptcy protection on Nov. 15, 2001. Burlington initiated a restructuring that included laying off workers, selling its bedding, window treatments and upholstery fabrics businesses and closing its trucking operation. It retained its 50.1 percent interest in Nano-Tex, which was not subject to bankruptcy proceedings. In its restructuring, Burlington identified Nano-Tex as a critical component in the corporation’s efforts to market innovative products and emerge from bankruptcy.
“The textile industry is like commodities; it’s very competitive,” Henderson said. “Nano-Tex allows Burlington to differentiate products through technology.”
Nano-Tex signed 14 licensing agreements and is involved in trials with mills in North America, Europe, Asia, India and Turkey. Clothing lines like Lee Jeans and Eddie Bauer slacks incorporate Nano-Tex’s technology. As part of Nano-Tex’s marketing strategy, apparel customers include hang tags and inseam labels that advertise Nano-Tex’s contribution.
Tice already has proven to be adept at marketing and licensing. As former president, CEO and director of Winterland, Tice negotiated licensing deals with pop stars Ricky Martin, the Back Street Boys and NSync as well as Pokemon and the World Wrestling Federation for products like T-shirts and other merchandise lines. He’s also is credited with helping grow IDG Books, publisher of the “For Dummies” series, and held top executive positions with the electronics components supplier Abracon Corp. and the whirlpool supplier HydroBaths Inc.
“It’s not just about having a technology but having markets,” Tice said. “I bring to the table consumer branding and consumer marketing expertise.”
After joining Winterland in 1997, Tice helped the company emerge from bankruptcy, improved its sales, expanded staff and moved the headquarters from San Francisco to a larger facility in San Leandro, Calif. The company re-entered bankruptcy before its court-approved sale in late 2001. According to Tice, the bankruptcy was a strategic maneuver to facilitate the sale.
Nano-Tex’s goal is to expand its name recognition beyond mills to consumers, Soane said, and Tice’s connections should facilitate that. Tice is charged with spearheading fund-raising efforts that will allow the company to embark on an ambitious branding strategy.
“We haven’t done any consumer branding and we think that’s the next plateau … getting the consumer to know about Nano-Tex,” Soane said. “The mills and their customers know. We have to break through those barriers.”
Tice’s experience as an apparel executive and not a nanotechnologist should help Nano-Tex make inroads in clothing and related markets, said textile industry analyst Tom Lewis. Lewis tracks the sector for the New York equity research firm C. L. King and Associates.
“It takes a very particular knack to go into a group in apparel,” Lewis said. A presentation may include designers, manufacturers and marketers. “If you lead with the technology instead of the benefits you will lose them in a heart beat. He has to be able to talk on the same level.”
Tice’s appointment also fits into Burlington and Nano-Tex’s goal of one day going public, Henderson said. The company needed to have an established leader and not a part-time CEO to prepare for the possibility of an initial public offering. Bringing Tice in now allows him to grow the company, define its marketing strategies and make it an attractive buy for investors once the economy turns around.
“We’ll go public when we’re ready and the financial markets (rebound),” Henderson said, “when we as a company feel it’s time to come out.”
“Our strategy is to be ready,” Tice added.