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Stephanie Pugliese, who has been president of Duluth Trading Co. since 2012 and CEO since 2015, shows off the Ball Room, an employee meeting space on the fourth floor of the company's new corporate headquarters in downtown Mount Horeb. The 108,000-square-foot building is home to 205 employees and has room for growth. The headquarters had been located in Belleville, where the company still maintains its distribution center, call center and an outlet store. The Belleville operations can employ up to 1,300 people during peak season for the clothing company.

MOUNT HOREB — This is a big weekend for red, pointy hats.

The Scandahoovian Winter Festival here features broomball, candlelight skiing, frozen turkey bowling, an adult spelling bee and a beard contest. The idea is to celebrate the community’s Scandinavian heritage and draw people to the village where wooden trolls line main street and Schubert’s Cafe has been whipping up breakfast since 1911.

But this community of roundabouts, Norwegians and the Grumpy Troll Brew Pub is in the midst of a transformation that has brought corporate jobs along with more retailers, restaurants and residents to its now booming downtown.

The most obvious example is the four-story, 108,000-square-foot corporate headquarters building a block off Main Street for Duluth Holdings, the parent company of Duluth Trading Co.

More quietly, Gempler’s, a direct catalog and web retailer that sells clothing, tools and other equipment to agricultural producers and homeowners who like to work outside, has returned to the village. This is where it was founded in 1985 by Steve Schlecht, who went on to buy Duluth Trading Co. after moving Gempler’s to Belleville more than 20 years ago.

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Steve Schlecht, seen here in 2010, has been instrumental to redevelopment projects in downtown Mount Horeb.

The additions of Duluth and Gempler’s, both of which are likely to add more employees in the coming years, are creating a downtown employment base in this village of 7,421 where apartments are virtually impossible to find and homes are snatched up shortly after going on the market.

“Anyone that hasn’t been in Mount Horeb for 18 to 24 months will be shocked,” said Steve Grundahl, a Mount Horeb native who restored a former downtown implement building into an event center with space for a restaurant. “Anyone that lives here sort of has this independent spirit and it has put Mount Horeb back on the map.”

New development

In the last six years, the village’s east side has seen the construction of a Miller & Sons grocery store, a 61-room GrandStay Hotel & Suites, a 2,000-square-foot production facility for Sjolinds Chocolate and a major expansion of Little Vikings Daycare.

The more recent additions to the downtown include the Hoff Apartments, Trail This Bicycle Shop, The Pop Place, which sells craft soda by the bottle, and the $1.8 million Driftless Historium, a museum and cultural center that opened in 2017, thanks to major backing by Schlecht.

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Duluth Trading Co.'s corporate headquarters rises a block off of Main Street in downtown Mount Horeb. With 205 employees and room for more, its presence is helping to trigger growth in the downtown.

Last week saw the opening of Icky Sticky, a business on Main Street that sells ice cream, Hawaiian shaved ice and baked goods. Brix Cider, a craft cider manufacturer that uses apples from 18 Wisconsin orchards, opened on Thursday in a Schlecht-owned building next to Duluth and includes a tasting room and farm-to-table dishes.

“There’s just this continued expression of economic spirit that’s really growing in the downtown area,” said Carol Johnson, executive director of the Mount Horeb Area Economic Development Corp. “New businesses are popping up, more visitors are coming to town and there’s just a heightened energy overall.”

Headquarters and a homecoming

The $20 million Duluth headquarters facility, which opened in November, is next to the Military Ridge State Trail and includes scores of glass windows that offer sweeping views of the village and Driftless countryside. Located on the former site of a lumberyard, the building is home to 205 employees, including some who come up with products like Ball Room Jeans, Buck Naked Performance Boxer Briefs and the Longtail T Shirt that prevents plumber’s butt.

A spacious canteen with wooden tables, lounge seating and an outdoor deck with a fire pit is on the fourth floor. But, unlike Epic Systems Corp. in Verona, there is no culinary staff. Only a line of silver microwave ovens for those who bring their lunch from home.

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The Canteen, on the fourth floor of the Duluth Trading Co.'s corporate headquarters, doesn't serve food. But it provides a space for employees to relax and enjoy their food from home or from restaurants a short walk away in downtown Mount Horeb. The Canteen also has an outdoor deck with a fire pit.

“I just love the idea of being here. We can walk downtown and have lunch at the Grumpy Troll, or Sunn Cafe or Schubert’s,” said Stephanie Pugliese, the company’s president since 2012 and CEO since 2015. “We didn’t want to be in a space where people had to get in their cars and drive and get food or have something that was self-contained. I just think Mount Horeb looks like our brand. And the community has been great to us.”

Before the construction of the headquarters building in Mount Horeb, about 100 Duluth employees had been brought to Mount Horeb from Belleville in 2014 and worked out of the Innovation Center, a former bank building across the street from the Duluth retail store. Those employees have been moved to the headquarters building along with 100 more from Belleville. So while 205 people work in downtown Mount Horeb, the company’s call center, outlet store and a nearly 200,000-square-foot distribution center in Belleville combine to employ between 700 and 1,300 people, depending on the time of the year.

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Members of the retail design and creative team from Duluth Trading Co. in downtown Mount Horeb wait for their lunch orders at Sunn Cafe, located a block away from Duluth's new headquarters building. From left are Lanea Martin and Nalee Simones, both of Madison, and Sondra German, of Belleville. The influx of workers is helping to bolster business in Mount Horeb's downtown and is helping to draw new businesses to the area as well. Sunn Cafe opened in 2016.

For Gempler’s, the company has a distribution center in Janesville with about 30 employees and, in Mount Horeb, about 15 employees in merchandising, product development, inventory and sales at the Innovation Center, a building owned by Schlecht.

Gempler’s outgrew its two buildings in Mount Horeb and moved to Belleville in 1997 but was sold in 2003 to Janesville-based Lab Safety Supply and acquired by Ariens in 2014. However, Ariens, a maker of lawn and garden equipment, sold Gempler’s in January to Carl Atwell and his family and a few friends. Atwell is a former Lands’ End executive who lives in Verona. A relaunch of the company’s website is scheduled for March.

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The interior design of Duluth Trading Co.'s corporate headquarters in Mount Horeb reflect the company's marketing and its mission.

“I think Carl was interested in bringing it back here to see if he could re-create the magic here with only being a block away from the original office,” said Sean Johnson, who leads inventory and planning for Gempler’s. “It’s a great town, it’s a great atmosphere. It’s kind of a perfect spot to draw more talent to grow the business.”

More downtown development is likely on the way as the police and fire stations, now located in separate facilities in the downtown, merge into a single $15 million public safety building on the village’s southwest side. Wisconsin Surplus Online Auction, now at 202 W. Front St., is building a campus near the intersection of highways 78 and 18-151, freeing up more space for future development in the downtown.

Duluth Trading Co.’s impact

Pugliese (pronounced pool-yay-zay) lives in the town of Middleton with her husband, Vincenzo Pugliese, who owns Cafe Porta Alba at Hilldale Shopping Center. The couple have three children, the youngest a sophomore at Middleton High School. Pugliese gardens and drives a Ford Explorer daily from her home to the Duluth headquarters building that towers behind Mount Horeb’s historic Main Street. The building offers more than twice the space as the combined corporate offices in Belleville and the Innovation Center and includes a workout facility, yoga room and showers.

The setting, like so many other projects in Mount Horeb, can be traced to Schlecht, who hired Pugliese more than 10 years ago.

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A steel sculpture of the Angry Beaver by noted Mount Horeb metal artist John Pahlas greets visitors in the lobby at Duluth Trading Co. The sculpture is made from old tools, scraps and other pieces of metal. The Angry Beaver can be found in a variety of Duluth products and in its commercials.

“On a personal level, I knew he was a genuine person I would respect and do respect a decade later,” said Pugliese. “It was so much fun to meet someone who was so smart and such an entrepreneur and such a good spirit in a totally different format of a company.”

Cindy Curtes and her business partner, Tasha Peterson, opened Sunn Cafe in fall 2016 in a former downtown butcher shop, and they see the direct benefit of Duluth each day around noon. Business is up 40 percent over last year and the clientele has allowed Curtes and Peterson to become more creative with their menu.

“They just fit in with the Mount Horeb vibe so easily and nicely,” Curtes said. “They’re fun to hang out with. They’re fun to talk to, they’re fun to have a beer with. They’re just great people.”

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Employee work spaces at Duluth Trading Co.'s new corporate headquarters in Mount Horeb rim the edges of the building's interior to take advantage of natural light. The office building provides sweeping views of the village and the rural Dane County countryside.

Duluth was founded in 1993 by two brothers from Duluth, Minnesota, selling tool organizers. In 2000, Duluth Trading Co. was acquired by Gempler’s, which was then owned by Schlecht, who is now executive chairman of Duluth’s board of directors. When Schlecht sold Gempler’s in 2003 to concentrate more on Duluth’s growth, Duluth had sales of about $12 million. The company raised $80 million in an initial public stock offering in 2015 and has been aggressively expanding.

The headquarters building, with a large metal beaver in its Front Street lobby, is just a few blocks away from the company’s flagship retail store that since 2010 has served as a retail laboratory for Duluth’s merchandising and marketing teams.

The company has 46 stores around the country that employ 1,622 people, and 15 stores will be added this year as the company shoots for 100 stores in the next three to four years. Combined with online sales, Duluth is likely to hit $1 billion in revenue in the next five years, about double its current sales, according to company projections.

“Poke average in the eye” is the company mantra.

“It’s really about doing something different and challenging the status quo and being willing to take chances and not necessarily settling,” said Pugliese, 48, who was hired in 2008 as the head of product development following stints at Lands’ End in Dodgeville and Ann Taylor in New York. “It’s all in the spirit of growth and fun and enjoyment.”

About 60 percent of the company’s sales are from online with 40 percent from brick-and-mortar stores. But as the company grows, Pugliese believes sales could flip to 60 percent from stores and 40 percent online. The stores are profitable but also a key marketing piece for the company, which is bucking the trend at a time when many national retailers are contracting.

“We wanted to give our brand a sense of place,” said Pugliese. “Even if it’s only for a tiny fraction of our customers, we want to give that ability for our brand to be something tangible and for customers to feel, touch and try the products. They are a significant piece of our business.”

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Barry Adams covers regional and business news for the Wisconsin State Journal.

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