Idylwilde’s Wild Ride

The fly-tying company that lost—and blogged—it all

On the morning of May 19, 2013, Idylwilde Flies founder Zach Mertens stared into his computer screen, digesting the bizarre circumstances that had sent his business spiraling. He then began punching paragraphs into the keyboard with the kind of blunt transparency unexpected of a company president and owner of an established business—a man who had, in the past, kept quiet about what had ailed him.

"In 2012 I fell extremely ill to debilitating depression," he wrote. "This was brought on by stress and the amount of work I was doing to insure [sic] that Idylwilde was successful and to build a brand that you the consumer of our flies could relate to. That stress, combined with emotional trauma from my past, sent my brain into shut-down."

When Mertens hit "publish" a story of rocky overseas business dealings, alleged insubordination, mental illness, and sexual abuse sprang to life. The reality was that Idylwilde, one of a handful of meaningful players in the fly-tying space, was on the brink. For the first time in 15 years, its owner had to stare down pre-season orders, fully aware that he didn't have the flies to fill them. For destination fly shops relying on the brand, it was a nightmare punctuated by unfilled fly bins during peak fishing months of June through September.

Mertens Web

The initial reaction to Mertens' four-alarm post was mixed; everything from "Fuck that…figure it out…do your job and get flies to those who paid…" to less dramatic and more empathetic. Adam Trina was a first responder. As the owner of Montana Fly Company (MFC), and as someone entrenched in the fly-tying market since the late '90s, Trina offered support to his rival, saying: "As the founder of MFC, and Zach being the founder of Idylwilde, his story definitely struck a chord. You really never know what can happen in Third World countries and I felt the need to let him know that we sympathize."

Like Montana Fly, Idylwilde had built a solid reputation with fly shops—manufacturing its bugs from afar and bringing them to market in America. As a kid, Mertens bounced from Hawaii to mainland China to the Philippines, where he lived for several years with his father. He graduated high school, moved to Oregon, and began flyfishing and guiding. He also studied flies in the bins. He knew they'd arrived from offshore sources and he wasn't impressed with their quality. So he penned a business plan based on bringing cutting-edge flies at commercial quantities into the mix. He tapped his family for financial support, teamed with professional domestic tyers, and used his overseas connections to piece together the manufacturing puzzle.

Finally, he packed up a year's worth of tying materials and flew to Manila, where he met Sister Christine Tan and began building a business. A Catholic nun from an affluent Philippine-Chinese family, Tan had dedicated her days to enriching the lives of the urban-poor. Mertens saw an opportunity to bring that dream to fruition through fly-tying and fair trade. They struck a deal to train her flock into a top squad of tyers. By day these original five women furiously twisted flies, and come evening they returned to their cinderblock houses, where braids of open sewers coursed through the slums.

Idyl Snap1

Mertens incorporated Idylwilde in 1998, and hired his first full-time domestic staffer, Chris Conaty, that same year. He also brought in a Philippines partner—Sister Tan's nephew, Bienvenido Tan, who would run international operations under the name Mirabel. The joint venture, according to Mertens, promised Mr. Tan a 40 percent Idylwilde stake in exchange for interest-free loans. The deal would also precipitate the beginning of the end, which by 2008 was marked by a heated deadlock over production inefficiencies, manufacturing costs, and financial performance.

Idyl Snap4

As the implosion of Idylwilde unfolded on the blogs, it was clear that the situation between Mertens, Conaty, Mr. Tan, and Mirabel was strained and confusing. Thousands of dozens of patterns that Mertens said he'd paid for remained frozen in the Philippines, and the ruptured relationship between Idylwilde and Conaty was no secret. Conaty was accused of colluding with Philippines' stakeholders to sell the fly stock out from under the brand while Mertens was on sick leave. Conaty was subsequently fired and sued earlier this year, and has been mostly quiet, sending this statement via email: "I have always been, and continue to be, proud of the professionalism and integrity with which I approach my work. Indeed, the court ruled in my favor in a hearing that considered the accusations made against me and the lawsuit was dismissed in its entirety shortly after that ruling."

Whether Conaty orchestrated Idylwilde's collapse, as Mertens contends, or whether Mertens was simply out of money and asleep at the wheel, Conaty soon was working with Mirabel. Ken Morrish, one of several Idylwilde signature tyers to resign in the wake of the fallout, said he was disappointed by what had transpired, considering the one-time quality of the brand and product. "But I also think Idylwilde's collapse has been painted in a very particular way that differs greatly from the financial realities of what really transpired. There has been a lot of what I would call ‘victim' spin on actual events. The idea that [Conaty] singlehandedly undermined this company doesn't make any sense. I don't think it's true. There's a big financial element that's never been mentioned. All that's been said [by Mertens] is, ‘We own these flies.'"

Wading through this "spin," the court decided in Conaty's favor earlier this year. But Idylwilde's future remains in question. Mertens hired Rob Russell as his "Fly Czar" this past spring, and the duo traveled to Sri Lanka in July to rebuild manufacturing operations as part of the much-blogged-about "Operation Chubby". (The Chubby Chernobyl being one of the company's top-selling patterns—an interesting comeback choice considering its development by Conaty.) In addition to the Chubby, Idylwilde announced plans to reincarnate many of its mainstay patterns this fall, while ramping up production capabilities for 2014. The vibe was optimistic, even triumphant. After returning home from Sri Lanka, Russell wrote about pouring out lagers, clinking glasses, and cheering the new Chubby Chernobyl —"made in Sri Lanka! 

That jubilant tune has since been silenced. In September, Umpqua Feather Merchants put the brakes on Idylwilde's rally with a string of press releases outlining a long-term agreement "with a well-established fly factory in the Philippines." That factory was Mirabel. And the flies—60,000 dozen being sold by Umpqua to its dealers at a 15-percent discount—are the same Idylwilde patterns of Mertens' long lost lot, right down to the SKU numbers.

On the morning of September 11, Mertens again hunkered down in front of his computer and penned a response to the war on flies. He wrote: "We are aware of Umpqua's press release and letter announcing its partnership with our former Philippines factory. We understand that Umpqua's sales reps are telling dealers that Umpqua has, in effect, purchased Idylwilde. Nothing could be further from the truth. Instead, Umpqua is selling the flies that Idylwilde already paid its manufacturing partner in the Philippines to produce for the 2013 season." 

With additional need created by Idylwilde's calamity, Umpqua—an industry trailblazer established by Dennis Black in 1972—has been busy taking orders, despite questions posed by Mertens and others calling out the hostile nature of the move. On the phone, Umpqua President and CEO Jeff Fryhover said he was unfazed by the accusations.

"We were contacted by [Mirabel] in July," Fryover said. "The easy way to make money in this gig would have been to sell those flies back then. But I'm not selling them till October. The reason it took that amount of time was for us to do the due diligence, to get our attorneys involved, because I was not willing to even go to step one if we could not be assured that there was clear title on these flies."

With new flies in hand, Umpqua is moving forward with plans to distribute them to fly shops around the country as part of its "Thrilla from Manila" sale. But not all specialty dealers are thrilled. Mike Lum, owner of Madison River Fishing Co. in Ennis, Montana—a longtime Umpqua dealer—said he will no longer purchase bugs from the company as a matter of principal. After a frank conversation with Fryhover, Lum said, "They're trying to spin it like they're taking care of their dealers and helping with their lack of inventory, but he didn't have any answers to the real questions regarding the disrespect and lack of ethics involved in the whole deal."

Ultimately, any resentment toward Umpqua may end up being overshadowed by the questions Idylwilde left behind. The company still had several supporters weighing in on its website through September, but Idylwilde's last blog announcement—penned by Mertens on September 23—stated the inevitable: "Until Idylwilde has resolved its disputes with Umpqua and my Philippine partner, I have made the decision to suspend taking any pre-season orders for delivery in 2014, effective immediately."

A few days prior to this announcement, former Fly Czar Rob Russell called The Drake to say that he'd smashed his computer at Idylwilde's Portland-based office and that the police had been called. "The events in the last 48 hours have been pretty telling," Russell said. "Basically, everyone here has been hung out to dry."

[Our story stated that Mr. Tan owned a 40 percent stake in Idylwilde. Actually, he owned a 40 percent stake in the unnamed joint venture between Idylwilde and Mirabel. In addition, Mr. Conaty and Idylwilde settled their case, but Conaty remains bound by the confidentiality and nondisclosure clause of his Buy-Sell Agreement with Idylwilde. All photos courtesy of Idylwilde Flies. —Ed]