Heart and soul
Perth-based Footwear Industries went against the trend and started manufacturing footwear in Australia, rather than offshore.
It is the stuff of Australian legend: four mates hold monthly meetings in a backyard shed to create a business, throwing back a few beers in the process. A few other friends cough up some extra venture capital and the business goes on to export worldwide. Stranger still, everyone is still friends.
The story of Perth-based Footwear Industries is a textbook lesson in how to do business. And talking with one of its founders, Peter Nichols, you cannot help but feel proud of the Australian ingenuity they are sending abroad.
In 1993, after working together for 15 years in the footwear trade, Nichols and colleagues Brian Piggott, Nev Hurring and Ross Fitzgerald considered branching out into other ventures. Through old industry contacts, however, the quartet became aware that safety boots were failing to keep up with workplace trends.
"A lot of the mining companies were changing and extending their working hours to as much as 14 hours per day and the current boots on the market were uncomfortable," Nichols says.
A foot in the door
Using a new shock-absorbent material called Poron that Nichols had seen in the US, he and Piggott developed a sole that they patented under the brand name Trisole Comfort Technology.
With their two colleagues they developed a business and marketing plan. Samples were made in Italy "so as not to alert the Australian market to what we were doing".
When the four friends realised they could not raise sufficient capital to launch the business, they approached six close associates who agreed to come on board. In March 1995, Footwear Industries opened and within eight months the first pair of Steel Blue safety boots was ready for sale.
"In those days we would make about 50 pairs in the morning and then pack them and send them out in the afternoon," Nichols says. "It was very hands-on with about six staff."
Today, the manufacturer sells more than 700,000 pairs of boots a year across various ranges.
The winner of numerous business accolades, including the national Telstra Small Business of the Year Award in 2003, it might seem that Footwear Industries just happened to launch in the right place at the right time. The early days were tough, though.
"Steel Blue was about 50 per cent more expensive than any other brand on the market," Nichols says, conceding price was a major deterrent to buyers.
"Most companies that supplied safety footwear to their employees could not understand why they should give them expensive boots.
"We had to show that we were different and had a better product."
Quality, comfort, customer service, innovation and great staff - Nichols and the team put in place the platform for a business that could grow and keep growing. To fight for shelf space with established brands, they developed strong bonds with distributors and provided production flexibility that compensated for price differences.
"While our competitors would take weeks or months to deliver, we would do it in hours or days," Nichols says.
Although Footwear Industries knew its boots were good, a limited advertising budget meant they were fast becoming one of the best-kept secrets in the market. In 1997, Nichols and co hit on a bold move, offering a 30-day money-back comfort guarantee - a world-first for safety boots that took the sting out of buying Steel Blue.
Footwear Industries also responded to distributors' requests for a mid-priced shoe. Not wanting to toy with the image of Steel Blue - which now represents 75 per cent of sales - it developed the Howler range.
Its success, particularly in Asia, led to the business licensing its Asian market and manufacture to an Indonesian-based company and developing the Krusher economy range.
"(Krusher) has proved so successful that it has become the second-biggest-selling brand in Asia and the biggest-selling Australian brand in Asia in only three years," Nichols boasts.
Business and personal values have underpinned the success of Nichols, Piggott, Hurring and Fitzgerald.
To them, honesty is important - but they ensure that the people with whom they are in partnership are equally honest. Self-motivation is vital - as is the need to surround oneself with equally positive influences.
Patience is also critical to realising dreams - because businesses inevitably cannot grow as quickly as desired.
"None of my business partners, staff or myself are world-beaters, but collectively we are a dynamic team," Nichols says. "We have managed to turn the humble safety boot into a high-performance and desirable product."
Footwear Industries has bucked a trend. In the 20 years before it stumbled along, many footwear and textile companies had closed down, gone broke or moved offshore.
"Most people thought we were crazy to want to start up a footwear manufacturing company in Australia and not Asia," Nichols says.
This capacity to defy the odds - and the sceptics - keeps the founders going. "Knowing what we have achieved and what the future can offer is very satisfying," Nichols explains. "When people tell you something can't be done and then you actually do it better than what you thought you could, it's a fantastic feeling."
Central to the business' success is its reputation as a world leader in safety boot technology, the result of an expanded development arm. Footwear Industries will soon launch the world's first non-metallic safety toe cap, which Nichols believes will further expand market share world-wide and lift the company's export take to beyond the current 10 per cent of turnover derived from markets such as Asia, New Zealand, Papua New Guinea and the US.
It enhances the business' reputation for being able to deliver innovative products on time every time.
"We have the ability to make special one-pair custom-made orders," Nichols says. "We call it the Pizza Principle; just tell us what topping you want and we will make it. Our competitors can only do long runs of custom-made orders totalling hundreds of pairs. We are pleasant to deal with and bend over backwards to satisfy customers."
Ask Nichols why Footwear Industries has succeeded and at first he pleads ignorance, but words such as passion and happiness flow from the mouth of a man who cites his late father, Allan, as his inspiration. Rigorous business systems have been crucial, and the four founders have always sought the input of board members and tried to run the operation akin to a public company.
Nichols says: "I think we all knew we had something significant to offer and that eventually we would succeed. We have managed our sales growth carefully. We limit the outlets our brands are available through and we don't try to saturate the market. This has created a very loyal network of distributors who understand the value of our brands."
Growth of 35 to 40 per cent each year for the past four years suggests the formula is on track.
All the same, Nichols believes the spirit of the business remains much as it was when the operation worked from rented premises with just six staff. At heart, he says, Footwear Industries is just a group of mates "making and selling the best bloody safety boot in the world".
• Honesty in business is important
• Deliver on time,every time
• Act as though you're a public company.
"Have patience in realising your dreams and aspirations as not all businesses grow as fast or as profitably as you'd like."
Published on: Thursday, June 18, 2009blog comments powered by Disqus