r/knitting • u/neuroling_loser • 1d ago
In the news Knitting for Olive goes to private equity
KfO just announced on their instagram that they have sold to what is essentially a private equity firm, Hawk Infinity. They promise that nothing is going to change, but this feels like the famous last words from every single company that has ever sold to PE. I’m genuinely not sure how to feel about this.
See the post HERE
275
u/hamletandskull 1d ago
I think private equity is enough of a buzzword that people know PE = bad and don't know why.
PE is bad because generally they do shortterm profits at the expense of longterm growth because their goal is selling the business to someone else in 5 or so years. Their "success" is then measured by "we bought for X, we sold for Y", and not on whether the business will actually be sustainable. This means cost-cutting measures to make number go up short term so it's appealing to other companies to buy.
This company buys businesses and manages them in the long term. It has less motivation to pull short-term profit-go-up strats that will lose a preestablished customer base.
Not saying it's a good thing, but just saying it's not necessarily a death knell.
28
u/northernarrow 21h ago
Hawk regularly offloads its businesses so I'm not sure where your confidence in long term growth is.
5
u/hamletandskull 21h ago
Sure, it could be wishful thinking, I'm assuming that they're not explicitly lying when they say it's for good but you're right that they could be, or that things could change. It just doesn't look like they have the same bad track record of shortterm investments that I usually think of with PE
8
u/northernarrow 20h ago
I think it's more likely they're likely somewhat naive and think it's probably best for them personally (which I'm sure it is). They certainly won't be anywhere as commercially savvy as Hawk or its advisors and it's not as difficult as it may seem to make a deal seem more palatable than it actually is.
At the end of the day, they've lost the stake in their business (and with it, the bulk of their negotiating power).
What are you basing your assessment of their track record off of?
4
u/hamletandskull 20h ago
Just a cursory google but looked like theyve held several companies for a very long time, which I wouldnt really expect to see with the quick turnover guys. But not being Norwegian myself I don't know that much, true
29
u/pbnchick 23h ago
The PE hysteria is interesting. Most did not know Knit Picks was owned by a PE until that PE bought Jimmy Bean Wool. Now if someone makes a negative post about their product or customer service, several people will claim it's because they are owned by a PE.
15
u/Certain_Concept 16h ago
Private equity has existed for decades I agree.. however it's only in more recent years that PE is at large scale intentionally buying successful businesses and driving them into the ground.
PE discovered they could buy semi-successful businesses cheaply by doing a leveraged buyout to acquire a company financed mostly with borrowed money and then using the target company's own assets and cash flow as collateral and repayment source.
They can then extract money for themselves via management fees or Sale-Leaseback Extraction or making the company take out more new debt strictly to pay a massive special cash dividend to the private equity owners.
We are more aware of it because more and more PE are using the above strategies to intentionally tank very well known companies.
For examples of large companies look at Joan's Fabrics, Red Lobster, Toys R us, Claire's, etc.
If you look at your local neighborhood you will be able to find numerous examples of this happening to smaller vets, hospitals, HVAC etc.
several people will claim it's because they are owned by a PE.
And oftentimes it is true. Are you saying that PE engaging in these behaviors won't lead to worse service? Usually if the PE's main goal is simply money extraction then they focus on cutting costs and raising prices, so no duh the service gets worse... At least up until the company task entirely.
0
u/thrwawyorangsweater Sweater Knitter, 50+ years 17h ago
Was? Who bought it from the PE? Because I thought that's when that PE bought Knitpicks and Jimmy Bean wool.
7
u/HVLA1508 16h ago
I knew KP had been bought by PE long before the JBW purchase because the owners (Steve and Kathy, I think?) sent out an email explaining it. And then KP became a “constantly on sale, price break, constant email marketing” type business. I still like a couple of their products but I feel like the family-owned vibe changed dramatically. And I was concerned when JBW bought Madelinetosh. They’re all just consolidating.
3
u/thrwawyorangsweater Sweater Knitter, 50+ years 12h ago
Yep all consolidating under that one PE firm-Deborah Knits had a GREAT video about it. Sometime around the time that video came out, KP did go further down hill-suddenly half of their long-time staples are out of stock or no longer sold and they just have random other stuff (a little Berroco, a little of this and that...) Same with Yarn (dot) com. The website looks like a 7 year old got a hold of it now.
131
u/Outrageous-Baker-510 1d ago
Gotta have hope, hawk is half decent at not running companies into the ground, so guess it’s a waiting game now
16
u/thane311 1d ago
Can you say more about this or what other companies they’ve managed you’re thinking of? I just looked at their portfolio and it seems to be mostly SaaS models so I didn’t see a lot to suggest one way or the other of what they might do with a DTC yarn brand.
13
u/belmari 23h ago
They also recently acquired a potato chip brand, so it seems they’re diversifying a little. Tech, yarn and snacks, perfect combination!
26
u/thats_not_six 22h ago
Or their portfolio is struggling for quick growth options in the competitive tech spaces and they are pivoting to traditional manufacturing businesses where they know traditional cost cutting measures will work to give them a quick portfolio value bump.
76
u/Outrageous-Baker-510 1d ago
Wanna be clear this is absolutely not, from my perspective anyway, selling out. Guessing it’s kinda inevitable when the business had that much momentum
42
u/frecklesfatale 1d ago
This is my thought as well. It seems like they at least put effort into finding a company that isn’t known for stripping the businesses it buys for parts. Still disappointing as a whole though.
44
u/Outrageous-Baker-510 1d ago
Idk, I am admittedly a filthy Nordic social capitalist and remain optimistic with this as a typical path to scale. A lot of smaller companies can’t seem to ride the wave, so if this keeps kfo going stably I’m pretty happy.
7
u/Adorable-Climate3262 19h ago
Yeah, is the better alternative that they cannot keep up with demand at all, cut corners internally or anger people by never being in stock, and fold? Small family businesses cannot easily scale all the time organically.
6
u/dasmorph 17h ago
I've only skimmed Nordic media on the founders of Hawk Infinity, and I'm sorry disappoint everyone. The headlines alone talk about accusations of inflating asset values and whistleblowers revealing systematic law violations. Not reassuring at all.. https://borsen.dk/nyheder/virksomheder/diskret-opkobsbolge-norsk-koncern-har-slugt-17-danske-it-selskaber https://www.finansavisen.no/teknologi/2025/10/30/8303532/hawk-infinity-angripes-under-milliardemisjon-vi-er-blitt-utsatt-for-en-drittpakke
35
u/thats_not_six 22h ago
They sold 100 percent of their business. It is the definition of selling out.
It's fine for them - great for them - to get a payday, but this is a sell out of their brand and their business.
If they were interested in retaining ownership, they could have just hired employees. If they needed capital, they could have brought in a few investors. They choose the 100 percent sale to PE option instead.
23
u/Shadow-Serum 22h ago
They literally sold out, what are you talking about? They sold 100% of the business for a fat chunk of money. They sold out hard
18
u/neuroling_loser 1d ago
That’s actually really good to hear! And you’re right I should also say that I’m not trying to say that they “sold out”. Let’s keep fingers and toes crossed the quality stays where it’s at.
61
u/bat_boys 23h ago
I truly hope their hopefulness at nothing changes comes to be. However it seems very naive to me. They no longer have any stakes in the company. They are employees. They aren’t deciding members anymore. Hawk may be less bad than American counterparts but it isn’t a charity organization. Big mourning this morning. KFO was my favourite and almost exclusive brand other than when a project didn’t fit their yarn. Love their merino and mohair. Can’t bear much other yarn on skin that I’ve tried. This is a sad morning indeed. I do wish them all the best and might go stock up for the next few sweaters as far as I can afford.
30
u/maxclifford1 21h ago
They are now employees and their employer is not a charity is absolutely the right way to look at this.
17
u/thats_not_six 22h ago
Similar feelings. At the end of the day, when I'm fortunate to have money in my budget for this hobby, I want to support small business owners because they are the heartbeat of the fiber community. I can see how they care from farm to fiber and for their customers.
Hard to have that same mentality when looking at the C suite page on Hawks site.
28
u/adrianalacervix 20h ago
Spoiler: it won't come to be.
I've been an employee of a few companies that were bought and leadership always promises "things will be the same or better". It's a line to keep people calm, but it is never true. Change is inevitable in these instances.
4
u/hellovatten 18h ago
I think it will be a wait and see situation... as for a KFO merino + silk mohair alternative there is the Sandnes Garn Sunday + Isager Silk Mohair. Though the thing that stands out about KFO is the color range... one can only hope they won't be enshittified :(
29
u/batikfins 1d ago
Can someone copy and paste the statement for those of us who don’t use instagram?
60
91
u/iloverocks420 1d ago
there’s no way they can guarantee nothing will change and it’s silly of them to promise such a thing. of course there will be changes as a result of this
42
u/darcerin knit all the pastel things! 23h ago
When Neopets (an online web-based game) sold out, they promised absolutely NOTHING would change. As soon as Adam and Donna (the founders) got their money, they were out the door, and of course, everything changed. I have been burned before, I haven't trusted many companies since then.
I would HOPE this gives KfO cash to hire one or two more people to help run the business at least..
53
u/maxclifford1 22h ago
One thing to add, Hawk Infinity has 100% ownership of KFO now. So even if KFO says things will stay the same, they don’t have any mechanism to enforce that. Maybe there was something in the contract that the KFO people will stay in charge for a year or something, but at some point that changes will come.
Also, I don’t understand this “KFO grew too big and the family couldn’t manage it anymore.” They were in control!! They could stay the same size, hire more people, scale back, just to name a few. People talk about this like it was a natural disaster they couldn’t control, but selling to a private company was not inevitable! They made the disappointing decision to sell the company, it did not HAVE to happen.
19
u/TrulyPleasant2022 1d ago
42
u/thats_not_six 22h ago
https://www.hawkinfinity.com/team
Nothing like going from supporting a women owned fiber arts company to...this.
28
42
u/Pour_Me_Another_ 1d ago
My employer has been bought out twice with promises of no changes. There are always changes. Mainly now instead of focusing on providing a good service, we have to hit KPIs. PE is obsessed with KPIs, even if they make no sense for the job that needs to be done. They might see more of that at Knitting for Olive 😀
27
u/thats_not_six 22h ago
No PE company ever comes out and says to customers "We're taking over this company you love and changing everything that made you love it". But that is always the strategy because they are in it for (1) growth and (2) increased valuations, not for customer experience. The PE strategy is finding how much they can enshittify a customer's experience without actually losing the customer.
6
u/Pour_Me_Another_ 21h ago
Sucks to see this happen to so many good businesses. I worry about what this means for culture and arts. Imagine bakeries in France having this happen en masse and what that would do over time to them. We have a lot to lose in this.
10
u/darcerin knit all the pastel things! 23h ago
When Macy's bought out the May company, they promised no changes. Six months in they were shuttering stores and firing en masse.
I worked for them (Hecht's/Macy's) during that period. It was awful. My only joy is that they are still suffering in debt.
5
u/perchance7 18h ago
For us it was no changes as well. After a while, 7 people including me had to go. I had worked there for 9 fucking years and had a small child.
71
u/anhedonicelf 1d ago
While I’m suspicious when any big company buys out something I love, I am holding out hope since they: 1- are not not an American company, 2-seem to actually be keeping the businesses they bought.
I’m sure a few things will change but I’m hopeful it won’t be destroyed.
35
u/DisastrousAge4650 1d ago edited 21h ago
The Hawk Infinity website says they have 100% ownership of K4O.
I want to do a comparison of the performance between companies they have full vs partial ownership over.
8
u/dasmorph 17h ago
I've only skimmed Nordic media on the founders of Hawk Inifinity and it's not reassuring at all. The headlines alone talk about accusations of inflating the values of the acquired assets and whistleblowers revealing systematic law violations. https://borsen.dk/nyheder/virksomheder/diskret-opkobsbolge-norsk-koncern-har-slugt-17-danske-it-selskaber https://www.finansavisen.no/teknologi/2025/10/30/8303532/hawk-infinity-angripes-under-milliardemisjon-vi-er-blitt-utsatt-for-en-drittpakke
11
u/mercurial-trash 21h ago
Do I need to stock up on their yarn before current stock goes bye bye?
8
u/heyykelleyy 20h ago
likely, before the quality takes a downturn or the prices start hiking up. i was going to refrain from buying until i got to the projects in my queue that they were planned for, but i may just have to purchase now.
5
u/thrwawyorangsweater Sweater Knitter, 50+ years 17h ago
Yes. Although I have quite a bit, and I'm kind of over adding mohair (and an extra $70) to every sweater.
I think I will just go ahead and support local/regional, because the company is already sold, so if we all go hoard it, it's going to that PE company.
12
24
u/Mainah_girl 19h ago
There goes another great brand. This Sucks!
Private Equity is targeting ALL hobbies and craft suppliers. Economics research showed that with inflation and a slowing economy that people cut back on vactions, eating out etc..., buit people have continued tos pend on their hobbies. It appears to be one of the last thing people give up, so Private Equity is targeting those markets, yarn and fabric have been hit first.
I hate private equity! They ruin everythign they touch!
Enjoy your last bits of pleasure folks, they will be coming for the air next!!
39
u/SpiralBreeze 1d ago
Well that sucks, never got to use their yarn and I know a lot of people love them.
12
u/MoonTime44 23h ago
Same here. I’m a beginner and really wanted to try out their yarn. Now I’m skeptical that it won’t be the same quality as previously raved about
6
u/3pelican 22h ago
Maybe buy some now for later!
1
u/MoonTime44 5h ago
I did try to buy some but it was out of stock in so many places for the colour I wanted so ended up going with a different brand
2
u/NinjaDefenestrator 8h ago
They weren’t really on my radar until very recently and I’m probably not their target demographic anyway- I prefer hand dyed. Still, I’m sad to see PE get their claws in another beloved brand after what they’ve done to so many other hobby businesses.
8
16
23
u/bulbagill 18h ago
What is up with all of these corporate koolaid responses saying "well at least Hawk isn't as bad as other PEs". If you're saying something is "not as bad" and the others, newsflash, it's still on the bad spectrum
2
u/PuzzleheadedOkra1188 7h ago
LOL, it’s like when Peter Thiel said he can’t be evil because he’s efficient, and being efficient is good so therefore Peter Thiel is good!
27
u/purringsporran 1d ago
Sigh. My beloved workplace was just demolished by its private equity owners. My condolences
12
u/astra823 21h ago
Had been hanging onto a gift card I bought during the Palestine fundraiser (hadn’t used yet due to US tariffs), so just placed an order to use that up before there’s a quality dropoff. I hope they’ll retain their quality and customer satisfaction, but it doesn’t bode well
4
5
4
u/thrwawyorangsweater Sweater Knitter, 50+ years 17h ago
Such a bummer. But no to everyone if you go hoard now before the quality changes you're still putting money in the pocket of the PE not KFO.
26
u/Revolutionary_Cap882 1d ago edited 1d ago
If it soothes any stress, Hawk Infinity isn’t a PE firm; it looks like more of a holding company, which is a different animal.
Not saying KfO will stay totally the same, but it’s not a doomsday scenario.
37
u/twofuzzysocks 23h ago
PE firms call themselves holding companies all the time. My previous employer was bought by PE and they used a “holding company” based in Delaware to do it to save on taxes.
21
u/thats_not_six 22h ago
"we're not private equity, we're a holding company" is what private equity firms say because they know people have a negative connotation with PE.
HoldCo is a PE strategy. It's under the umbrella of what PE firms do.
And Hawk has not been around long enough to gauge their actual intended holding periods for their investments - most were acquired in 2024.
3
16
u/SeaworthinessSea7058 1d ago
Their argument is partly that the company has grown too big for the founders, but at the same time they ensure people that nothing will change. Then what’s the point? 😅
21
u/KnitterLibrarian 1d ago
They’re just saying they’re going to have extra help but that their yarn ethics/quality/business products are not going to change
50
u/SeaworthinessSea7058 1d ago
To me, that is just so naive. They sold 100% of the company which means that they don’t have any say anymore. How can they guarantee anything then
34
u/thats_not_six 22h ago
Their Instagram comments pointed this out to them and they changed their answer to "well, as long as we're in charge, we promise to keep quality the same".
They're not in charge anymore. They sold 100 percent of their company.
I can't tell if they are naive themselves or just misleading customers, because they don't seem to realize they are no longer owners, they are no longer drivers, they are no longer leaders of the KFO brand. It's not theirs anymore. It's Hawks.
11
u/Remarkable-Rush-9085 22h ago
It’s part of the sale contract to do a positive hand off, I’m guessing. I mean if you want any indication of how the business will now be run it’s that they just posted a not very honest statement designed to retain as much customer count and revenue as possible during the transition.
11
u/thats_not_six 21h ago
It doesn't seem to be going well for them based on the Instagram comments - though internet isn't real life and casual customers may not realize the takeover for a while.
I also saw their comment about how they did a bunch of research about which firm to go with, which doesn't really bode well when they decided to go with a firm that has no experience in the fiber community.
Interested to see how this goes over for the KFO business for the rest of the year. Timing of the sale right before the holiday season with no heads up to customers doesn't sit right with me personally.
2
6
9
u/blackcatscrew 1d ago
Any suggested replacements that have the same values?
19
u/artmover 23h ago
I love Retrosaria Rosa Pomar based in Portugal, but the majority of their yarns have a more rustic quality. Still a lovely company.
2
u/alarmed-toe1002 21h ago
I’ve been intrigued to try them because I’ve seen positive reviews but don’t know much about them. They’ll probably be my first on the hunt for a go to quality yarn brand to replace KFO!
7
u/the_calico_lover 1d ago
It sounds to me like it was the best choice for them in order to move forward.
31
u/thats_not_six 22h ago
The choice that gave them the largest payday, yes.
The choice that allows them to stay in charge of their product quality, no - as they are now seeming to realize in their Instagram comments.
That choice would have been slowing growth or hiring employees. Instead they leveraged their growth for a higher value on buyout - which is fine, but certainly not the only choice they could have made for their brand and their customers.
4
u/elle-elle-tee 20h ago
This is unfortunately for us, the customers, but at the end of the day, the owners of KFO don't owe us anything.
15
2
u/heyykelleyy 16h ago
heavy agree, it feels like they finally got overwhelmed with how much overhead running such a successful brand took, especially with just 3 people (and likely the contractors for website + photography etc), and decided to just take the easiest way out to wash their hands of it and walk away with a fat check.
1
u/needlecattooth 20h ago
Fingers crossed that this isn’t the end. K4O yarn and patterns have been some of my favorites.
1
u/Spiritual_Drama_6697 18h ago edited 17h ago
This is my favorite place to order yarn and I made a sweater with their yarn that I just finished and it’s my favorite sweater. I hope they continue sending to America. I want to continue making sweaters and cardigans with their yarn for as long as I can. Hoping the yarn quality stays good
1
u/Substantial_Tea_7552 7h ago
It’s a payday for them…and they undoubtedly are obligated to stay to maintain the face of the brand for 3 years or so…and then it will be as fast as a short row in a toddler sweater. Done and part of a consolidated enterprise and passed off again. As a loyal fan and customer I’m happy for the family and the financial security it gives them, but sorry to see it change, and it will. “Holding Company” is just spin. And not the kind knitters will like.
2
u/elesay_08 1h ago
This makes me so sad. I have vast amounts of KfO yarn, stashed or as sweaters, socks, shawls… as well as their knitting pattern book. I’ve been a fan for years.
I hope they (Pernille and Caroline) won’t be disappointed by the PE’s actions over the coming years.
I guess it’s time for one last stash splurge in case it all goes south.
2.0k
u/ireadterms 1d ago
I’ll preface my statement with I am in leadership for an organization that conducts business in North and Central America, but not in Europe. That said, we have considered operating in Europe and I had to do some light touch ramp up to understand how these types of companies are structured.
Long story short, I went to Hawk Financial’s website and read up. Hawk is a holding company and they operate differently than how American private equity companies operate. In general, the founders of the companies they buy tend to retain more autonomy over their companies than what most Americans are used to. This means that they shift the financial burden to the holding company, in exchange for creative freedom and day-to-day management. KFO will most likely have a stake in Hawk and it is mutually beneficial to both Hawk and KFO to continue to grow the KFO brand.
My hunch is that KFO has grown at a quicker pace than they can manage, and coupled with tariffs, their philanthropic support, and rising costs, it has become difficult for them to remain at a baseline. Having a holding company as a partner will give them access to capital. Hawk’s website provides quite a bit of insight into their model.