GRAND RAPIDS — The month of April begins a season of change for Performance Fabrics Inc.

The Grand Rapids-based virtual manufacturer recently changed its name and is preparing to pitch big box retailers on the wisdom of stocking its line of personal protective equipment - gloves, finger guards, arm guards and aprons that are made with SuperFabric brand material.

Along with the move into a new market, the renamed HexArmor Safety/Performance Fabrics is launching a product development effort. And it has a new source of capital being made available by the company’s first institutional investor.

The story of Performance Fabrics actually began a couple of years ago when the company’s principals began working with a Minneapolis-based company that had the intellectual property rights to SuperFabric. The company helped the principals look at different ways to distribute the fabric technology to some of the larger textile companies. Eventually Performance Fabrics decided there was a wonderful opportunity to develop actual product for end-users.

Performance Fabrics signed a license and supply agreement with HDM, the owners of the intellectual property for the fabric technology. As the firm began to bring products to its first markets Performance Fabrics got a little wiser in terms of the functionality and quality of the fabric. Quite simply, it is not easy to maintain the sort of protection offered by the fabric and still provide dexterity to the user.

With that under its belt, the company’s leadership now feels the time is right to take several more steps forward. Performance Fabrics President Steve Van Ermen told MiBiz in March that his company was working with a representatives’ group to open a major retail program in April with national retailers like Wal-Mart, Home Depot and Meijer, aiming at product placement in hardware departments. "Anywhere work gloves are sold," he said. "We have probably the most-differentiated glove on the market."

Van Ermen said that management decided to change the name of the company because they felt the brand, Hex Armor is a lot stronger than the name Performance Fabrics.

Performance Fabrics is a virtual manufacturer that owns all of the designs and specifications for the HexArmor line of product. All manufacturing is contracted out. So, the big issue for the company as it launches its new efforts is its large distribution agreements. "You have to be ready when those things kick in.," said Van Ermen. "That means you have to have the marketing in place and the inventory in place."

Van Ermen said the biggest concern expressed by its new customers was if the company would be able to keep up with demand. He knew that meant Performance Fabrics needed a new line of funding and he began by seeking out angel investors in West Michigan and beyond. But a problem with that strategy soon developed.

"We are a fairly small company," he said. "Doing it $100,000 or $200,000 a crack takes a lot of time. And we really wanted somebody local, somebody who understood our business and potentially could have linkages into the industrial markets where we sell most of our products."

Enter Performance Fabrics’ new investor, Grand Rapids-based Bridge Street Capital Partners LLC. BSC is a private equity fund investing in middle-market companies throughout the Midwest. It primarily looks for profitable, growth companies with revenues ranging in size from $5-$50 million.

BSC Managing Director John Meilner said that the group found Performance Fabrics to be very attractive and made an equity investment.

"They have access to a very unique fabric technology that is highly resistant to cuts, punctures and abrasions. What is interesting to us is that PF has carved out a little niche in the safety area. Anybody that is wearing protective equipment in the workplace falls in under our license agreement and our exclusivity," Meilner told MiBiz. "Certainly it always starts with the management team and our underwriting of the quality of that team and their ability to execute the strategy."

From Bridge Street Capital’s point of view, the investment in PF fits well with its first investment, the acquisition of Jacob Ash.

"Through Jacob Ash we actually know something about some of the sourcing, some of the distribution channels," said Meilner.

The investment in Performance Fabrics is different than what BSC has done with Jacob Ash. The group made a growth equity investment in PF, equity that will be used by the company to facilitate further growth of the business. BSC bought the Jacob Ash company from the Ash family.

"Those are the two different types of investments we said we wanted to get ourselves involved in," said Meilner. "Now we have one of each."

While the investments may have stemmed from different models, the teams at Jacob Ash and Performance Fabrics are already collaborating, according to Meilner. Most of Performance Fabrics’ products are sold through catalogs, distributors and direct to end-users. So, the two teams are working together to develop some Performance Fabrics product that Jacob Ash can work through its retail channels.

"Jacob Ash has a very retail-oriented model and is already showing some of the PF products," he said. "Jacob Ash could begin to sell some of the products to hunters and sport fishermen through the retail channels."

While Jacob Ash and Performance Fabrics seem to fit together, hand in glove, Meilner said that BSC is certainly not going to limit itself to that space.

"It was easier for us to do the Performance Fabrics deal because we had some real touch points through Jacob Ash," he said." Sometimes when you do things in a certain category you tend to get smarter and feel more comfortable."

But he also stressed that the fact that Performance Fabrics and Jacob Ash are both apparel-driven was purely coincidental.

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This article appeared in the April 4, 2005 issue of MiBiz, read by upper management executives in West and Southwest Michigan. Print subscriptions are free to qualified individuals who do business in West and Southwest Michigan. For further information about MiBiz Network, visit www.mibiz.com.