Basque beret production dates back to the seventeenth century in the non-Basque area of Oloron-Sainte-Marie, a small town in southern France, where sheep grazed on nearby mountainsides. Locals, like many other peoples, discovered that when wetted and rubbed together, small bits of wool became felted. While still moist, the felt could be hand manipulated by pulling it over the knee, thereby creating a rounded shape appropriate for covering the head.

Originally made by hand for male villagers, beret making became industrialized in the nineteenth century, with the first factory, Beatex-Laulhere, claiming production records dating back to 1810. Other factories followed and, by 1928, over twenty were producing millions of berets for international markets, stimulated by World

War I military and civilian migrations. French sheep wool was originally used; later merino was imported from Australia and South Africa. By the mid-twentieth century, softer berets made of angora (molted rabbit fur) mixed with thermofibers attracted female wearers.

Basque berets are usually made during winter months and involve ten steps: knitting, sewing, felting, blocking, drying, checking, brushing, shaving, "confection" or finishing, and delivery. In 1996, a beret museum opened in the village of Nay, sponsored by the manufacturer Blancq-Olibet, which provides public educational tours on Basque beret manufacture.

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