Editor's note: This tour of small businesses across the country highlights the imagination, diversity, and resilience of American enterprise.

Deer season in Vermont falls in the middle of November. More than 65,000 hunters--most of them men--head for the woods with their rifles. The "hunters' widows" left behind seize the opportunity to do some early holiday shopping. Many make the pilgrimage to Northfield, a town of about 3,000 that is home to Cabot Hosiery Mills. Over the two weekends before Thanksgiving, as many as 14,000 people from as far away as Ohio flood Cabot's factory floor to scoop up socks--mostly seconds and irregulars--at wholesale prices or less.

The almost 30-year-old sale has become a tradition in the Green Mountain State.

"It creates a tourist opportunity" before ski season starts, "and other local businesses hop onto that," says Patricia Moulton, secretary of Vermont's Agency of Commerce and Community Development. "It's a great way to get a great bargain on America's best socks."

When Cabot Hosiery launched in Northfield in 1978, it brought new life and new jobs to an area that, 100 years earlier, had thrived on sheep herding and woolen mills. In the early 2000s, Cabot, too, was expiring when the founder's son, Ric Cabot, stepped up with an idea. Formerly a private-label supplier for big fashion brands, the family business would itself become a brand--one that stood for performance, American manufacturing, and quality so high the company would back it with a lifetime guarantee.

"I came up with the name Darn Tough because I thought we were darn tough if we could survive," says Ric Cabot. (The name is also, of course, an elegant pun.)

Darn Tough has done more than just survive. It has demonstrated the appeal of small-state manufacturing and consumers' willingness to pay more for domestically produced goods. The $40 million business sells nearly 5 million pairs of socks a year. Hikers, bikers, skiers, and, yes, hunters buy them. So does every branch of the military services. "You can't pay for that kind of advertising," says Marc Cabot, Ric's father and the founder of Cabot. "Our brand has become a cult brand."

Marc Sherman, owner of the Outdoor Gear Exchange, in Burlington, Vermont, has been selling Darn Tough since the Cabots launched the brand in 2004. Although Darn Tough offers only one product and prices don't exceed $25 a pair, it is Sherman's second-biggest seller by revenue. "We sell over 20,000 pairs of Darn Tough socks a year," says Sherman. "A ridiculous amount of socks."

Sherman, who personally owns 40 pairs, says his customers like Darn Tough's fit and durability. They also appreciate the company story. "In addition to being an amazing product, it was made in Vermont," he says. "That is something that Vermonters want to hear."

Birth of a salesman

Hosiery runs in the Cabot blood. Marc Cabot's father was a sockmaker in New Hampshire and, later, in North Carolina. Marc went a different route, studying journalism, then moving to Lake Tahoe to write a (never published) novel and deal blackjack. Later, in New York City, he worked in the advertising and package design department of a business that held hosiery licenses for companies like Walt Disney and Botany 500. After nine months, the owner called Marc into his office. "He said, 'Cabot, with your personality you could sell socks,'" says Marc.

Marc insisted that his boss first send him to one of the company's contract hosiery mills in North Carolina so he could learn the art of sock making. "I needed a substitute for a typewriter and found it in the knitting machine," he says. After mastering the process, he repped for the hosiery company for a year. Then he struck out on his own, working with southern mills to create fashion socks for brands like Schiaparelli and Christian Dior.

On vacation with his wife in Aruba in 1967, Cabot admired the prowess of a craps player, who turned out to be Norman Barron, the founder of Marshall's department stores. The two struck up a friendship, and Marc became a major supplier to Marshall's of irregulars (socks with slight imperfections, sold at reduced cost). In the mid-'70s, Barron put up the money to start Cabot Hosiery Mills, with each partner taking a 50 percent stake. The business moved into a former fleece factory in Northfield that had been abandoned because the machinery was too heavy for the floors. Marc chose Northfield for its proximity to a factory that manufactured body suits he designed and sold as a separate business.

For years, Marc lived four days a week in Northfield, while his family stayed in Riverdale, New York, 300 miles away. As a child, Ric Cabot spent vacations and long weekends at the mill, where "I loved to watch the machines running," he says. "They're loud. Hundreds of moving parts. And the yarn...the smell of it...."

Like his father, Ric majored in journalism and worked in advertising before joining the family business in 1989. Also like his father, he chose to start on the knitting-room floor. There, he ran the machines and checked product for quality, slipping his hand into sock after sock after sock. Eventually he joined his father in sales.

In 1994, Ric bought out Barron. Cabot Hosiery Mills became a Cabot-only production.

The giant sucking sound

If you wore brand-name socks in the '80s and '90s, they may have come from Cabot. The company private-labeled for Gap, Banana Republic, Old Navy, Talbot's, Brooks Brothers, Polo, and others. It specialized in socks with multiple colors or complicated patterns, eschewing black-and-white ribbed socks, which both Cabots found boring. It was a low-margin business, but steady. The mill prospered, building a new 56,000-square-foot factory a mile north of its rented one. In a town of (at the time) roughly 2,000 people, Cabot Hosiery employed 75 of them.

"Then came the offshoring thing," says Ric. "The giant sucking sound that people are still talking about in politics today."

Cabot's biggest customers pulled out of their contracts. The work force dwindled to 30 or 35 as production dropped from five days a week to three. With a child on the way, Ric worried he might lose his house. "The banks were closing in on us," he says. "Obviously my father and I had to guarantee everything. I felt like if I don't do something right now--something relevant and profitable--then I don't know what is going to happen.

"From the hottest of fires," says Ric, "comes the strongest of steels."

The Cabots decided it was time to step out of from the private-label shadows and become a brand themselves. They had the facility. They had the skill. Perhaps more importantly, they had a story: third-generation sock makers operating in rugged Vermont. They designed a merino-wool sock with form-fitting toe box and sculpted heel, and made it with a very high stitch count, which creates density without bulk. Ric envisioned the market to be outdoor enthusiasts--"somebody that demands a lot of their gear."

In 2004, Ric begged an audience with a retailer in Montpelier, 10 miles away. Filling a backpack with the first Darn Tough product, a running sock, he persuaded the owner to let him set up a rack in the store. He also donated 3,500 pairs to the Vermont City Marathon, an annual event held in Burlington, for inclusion in swag bags. That was the start of demand from local businesses like Outdoor Gear Exchange.

Borrowing a page from such respected brands as L.L. Bean and Land's End, the Cabots reinforced the quality message with a lifetime warranty. The warranty also acclimates buyers to the price. A 12-pack of Chinese-made tube socks cost less than $12, but many pairs won't last the year. With Darn Tough, "you can make the argument that if I buy one pair of socks at $20, I will never have to buy that style of sock again," says Ric. (He calls the percentage of returns "tiny.")

On a Reddit discussion about the brand, one customer confessed to returning a pair of Darn Tough socks after burning a hole in the toe while drying them over the campfire--"a disingenuous use of their warranty, I know. They replaced the pair, no questions asked, and even gave me one of their rad stickers. I refuse to wear a sock by any other company."

The Darn Tough economy

Marc Cabot, almost 77, still comes into work every day. But Darn Tough "is Ric's baby," he says. The baby has far outstripped the parent. At its private-label peak, Cabot Hosiery generated $7 million or $8 million a year, or roughly only 20 percent of Darn Tough's current revenue. The old Cabot sold to a dozen or so large customers. Darn Tough services 2,000, ranging from independent running and ski shops to REI, the company's largest account. (The company does not yet sell direct through its website, although that is coming, says Ric.)

All of which is very good for Northfield. Cabot Hosiery Mill, just up the road from a graveyard, is growing. The company took over another 47,000 square feet of factory space last year and is building a 100,000-square-foot expansion on the mill. It now employs 217 people. By 2020, Ric estimates, that number may reach 500.

Recently, another Northfield garment business, a T-shirt maker, moved out of town after selling to a Canadian company. "That cost us about 60 jobs," says Moulton, of the agency of commerce and community development. "So having Cabot Hosiery planning an expansion--undergoing hiring pretty much every day--is a huge opportunity for those folks as well as other people in the region."

Local businesses, including subcontractors, machine maintenance firms, and delivery and trucking services, also benefit the from the mill's presence. Others have sprung up to serve Cabot's employees. "We have more family-owned independent restaurants in our tiny little town square than you might find in five or six towns combined," says Ric.

Darn Tough's association with Vermont--like that of a certain well-known ice cream maker--has been a marketing boon, suggesting to consumers a craft product made by independent-minded people. "We don't have that legacy of grind them out, smokestacks, assembly lines, low wages," says Ric. "It is an outdoor state. It is rural. It is rugged. Physically and mentally, we come from that."

Published on: Jul 18, 2016