Why luxury global fashion houses are buying into New Zealand wool

Prices are up and international labels are interested. Why now?

There’s evidence that people in Aotearoa New Zealand treat their wool differently.

According to a 2023 study (made up of more than 1000 participants), our care for woolly jumpers was distinct from respondents in other countries. In New Zealand,
people were more likely to hand wash their jumpers and wore them longer before washing.

An appreciation for wool, specifically New Zealand wool, seems to be translating to bigger buyers right now.

In April, Chanel announced it had bought into Central Otago’s Lammermoor Station, a sheep farm that produces fine wool. Chanel now owns part of the farmland and has invested in infrastructure to support Lammermoor Station’s wool production. The international luxury brand intends to make it the first “Regenerative Organic Certified fine wool producing farm” in the world by 2029.

Kathmandu, which has headquarters in Ōtautahi Christchurch but is also part of the larger KMD Brands group dual-listed in New Zealand and Australia, has also bought into domestic wool.

The outdoor gear brand is working with Zentera, which rebranded from The New Zealand Merino Company this year (reflecting the company’s representation of Australian farms that began in 2022). Zentera aims to connect farmers to brands interested in using fine wool.

From Kathmandu’s 2027 autumn/winter range, merino sourced from Zentera’s ZQ+ labelled wool farms across New Zealand and Australia will be integrated into garments. Kathmandu says the material is “traceable back to farm and grown using regenerative practices”.

This interest comes amid an uncharacteristic lift in prices.

PGG Wrightson Wool general manager Rachel Shearer says prices have increased across the board – from strong wool utilised for tougher textiles such as those used in construction and carpets, to fine wool delicate enough for clothing. The strong wool indicator, considered a representative of wool prices collected at auctions, has increased nearly 85% in the past year, Shearer says.

There are multiple factors behind this rise, she says. The number of sheep globally is at an all-time low, making wool more scarce. The EU is rolling out a Digital Product Passport, which legislates that goods entering the region – including clothing – must disclose various details about the production, impacts and life cycle of the design (which means suppliers need to know where their materials come from). The production of synthetic fabrics has been disrupted by various geopolitical events – in April, Reuters reported the recent surge in fossil fuel prices because of the US-Iran war threatened to drive costs up for fast-fashion retailers.

Shearer also believes the interest in wool is up because consumer attitudes are encouraging brands to look for textiles beyond synthetics.

Patagonia design director Carrie Childs told Viva the trip to New Zealand has allowed the company to scope out wool farmers who might become a part of the company’s supply chain. Patagonia became interested after seeing Zentera’s offerings at the Functional Fabric Fair in Portland, Oregon, she says.

“Wool is one of our original performance fibres. It’s hydrophobic, so it can wick water off the body. It doesn’t get stinky like polyester does. It has wonderful durability and also wonderful softness. It’s what Sir Edmund Hillary was wearing on Everest.”

As reported by BusinessDesk, Patagonia is reviewing the use of New Zealand wool for its Autumn 2028 collections.

One of the farms Patagonia visited on its tour was Castle Hill Station, in high country Canterbury. The farm produces fine merino wool and has supplied brands such as Kathmandu, Icebreaker and Nikke.

“It’s nice to finally be able to get to a position where we are rewarded for our efforts, as opposed to just making the wheels go around.”

New Zealand wool has long held interest from local and international fashion brands.

This country is the third biggest producer of wool, contributing 9% of total global wool production (80 to 90% of it is strong wool). And on home soil, New Zealand designers often reach for the material.

Knitwear label Untouched World says 90% of its merino wool is shorn at Canterbury’s Glenthorne Station, which has certifications from Zentera.

Socks by Norsewear are made of 100% wool, sourced from New Zealand farms. The raw material has to be sent offshore to be scoured and then reimported to be woven on machines in Norsewood.

Designer Liz Mitchell is a staunch advocate for the fibre – last year, she told the Herald about the opportunities she sees for the industry.

“We’ve got this amazing fibre from our 23 million sheep. We do need to be thinking more about what can we do with this resource.”

This year, Sylvester has collaborated with Davaar Station, a sheep farm based in Southland. The resulting jumpers are made from the station’s strong wool and draw on a knitting pattern passed on from the Macdonald family, who own the farm.

Some get even closer to the fibre – Āhuru designer Natalie Robb has pieces, including a full white jumper, utilising woollen yarn homespun in Te Māhia.

In 2019, on the global stage, London-based New Zealand designer Emilia Wickstead spotlighted the textile in collaboration with The Woolmark Company, yet the merino wool used to dress notable Kiwi women, including Christchurch-raised jeweller Jessica McCormack, Dame Valerie Adams and poet Selina Tusitala Marsh, was sourced from Australian farms (reflecting the tough competition New Zealand has with the biggest global producer, Australia).

Historically, New Zealand farms have also supplied notable international brands, including Marks & Spencer, Brooks Brothers, Sheep Inc. and Stella McCartney.

Italian textile mills Vitale Barberis Canonico, Successori Reda and Loro Piana (owned by LVMH) have also previously sourced fine wool from New Zealand, the latter calling its mix of wool from both sides of the Tasman as “The Gift Of Kings”.

Zentera is a key player for the new labels interested in New Zealand wool. The company was created in the late 90s after New Zealand merino farmers recognised the need to reimagine the marketing of wool, says general manager of global supply Matt Hand.

Now, Zentera works across fine and strong wool in New Zealand, Australia and South Africa. In 2026, there are 140 brands in its portfolio, says Hand, including Icebreaker, Smart Wool, Rodd & Gun, Swanndri and Honest Wool.

Zentera advertises various certifications as a part of its wool supply. For Patagonia, and other labels interested in the product, there is a particular draw to the ZQ+ framework established in 2020 – which claims to include wool grown through “regenerative practices.”

Hand says that for Zentera, regenerative – which can be defined in many different ways, depending on who you ask – is about constant but verifiable improvement.

“Almost all of our farmers could claim that they’re regenerative in one way or another in their farming practices, because every one of our farmers views themselves as in a stewardship role, custodians of the land. They want to leave it in a better way than they found it,” he says.

“We actually measure the things they’re doing. It might be around a biodiversity project they’ve done for generations or tree planting projects, or it might be around fertiliser use… it measures the usage and the impact on the environment and improvements, perhaps, that could be made in that space.”

Various metrics are tracked by third parties, Hand says, including outcomes such as soil health, biodiversity and animal welfare.

Earlier this year, Zentera spoke to the Herald about the actions it has taken – contracting auditing body Control Union, running in-shed camera trials, beginning spot inspections and appointing animal welfare officers for ZQ-certified properties.

Hand says the actions have enabled Zentera to have a workforce that’s “even more informed than they were before”.

“They have a greater awareness around their responsibilities, and around safe and low stress animal management.”

These processes have enhanced the way Zentera can communicate with brands, Hand says.

“We have greater connectivity with the harvesting teams than ever, we have greater training for the harvesting teams and also anyone handling stock. There’s greater training in place than ever, and so that gives us a lot to talk to brands about.”

Alongside the name brands buying into New Zealand farms, the Government is also signalling an interest in the future of wool. Minister of Finance, Economic Growth and Social Investment Nicola Willis, speaking in June at the Threads Of Tomorrow summit, put a strong focus on the potential for wool in an international market.

“I am hopeful that in a world that is increasingly focused on the origin of products and the sustainability of products, New Zealand has an edge. We already produce some of the best wool and fibres in the world,” Willis said.

Willis says she wants to see stronger connections within the production chain.

Fashion & Textiles NZ is surveying the scope of wool and other fibre production to better understand the workings of the supply chain.

Chief executive Jacinta FitzGerald tells Viva the forthcoming Future of Fibre research (due out in October), takes into account all sorts of fibres produced in New Zealand, including wool, harakeke, hemp, alpaca, cashmere, hides and skins.

“We’re trying to understand what are those opportunities, and then what are the constraints and barriers that are stopping us from capitalising or realising those opportunities.”

FitzGerald is looking forward to understanding how to better support farmed and grown New Zealand fibres, and how to plug gaps within the supply chain.

“We know there’s definite areas where New Zealand can win. We have a lot of incredible attributes for what we do here – so how do we maximise capturing the value from that?”

Additional reporting by Clementine McIntyre and Maxine Seto Ma.

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