More than 2 billion pairs of footwear are bought each year in the United States and almost 99 percent of them come from overseas.
Makes sense when you think about it: Shoes are a mass-produced commodity. Labor is just a little too large a part of the cost to be made anywhere but the low-wage, high-intensity factories of the Third World.
But nestled in that 1 percent of USA-made shoes is a 26-year-old Buford company with Iranian-American owners and a Japanese name: Okabashi Brands. “Yes, we could do it in China, and maybe do it cheaper,” said founder Bahman M. Irvani. “But that is not in the DNA of our company and that is not our expertise.”
The company goes against the grain for Georgia, as well as the nation.
Irvani’s family did not plan to be such an exception. They were happy making shoes in Iran. They started Okabashi in Buford only after fleeing the 1979 Iranian revolution, leaving behind all the elements of a successful shoe-making operation.
All the elements, that is, but one.
“The know-how stays,” Irvani said.
In Iran, the family had designed footwear according to ideas about comfort and health learned from the Japanese. They called their new company Okabashi, which means bridge between two mountains, he said.
And they started making flip-flops. Well, not exactly flip-flops. They were a bit more expensive than the mass-produced, low-end models. But then, they were molded in a way meant to support the body, he said.
“What you want out of your shoes is alignment,” Irvani said. “The shoes give you proper posture.”
The business shuffled along awkwardly at first. If he and his family members had known how hard it would be, they might have hesitated, Irvani said. “Fortunately, we were very naïve. The first year, our electricity bill was bigger than our total revenue.”
He said he learned that an entrepreneur must be ready for trouble. “Rule No. 1: Make sure you’re committed enough to go through the ups and downs. So many small businesses go under because they are not capitalized.”
Okabashi has added a second line of footwear, spruced-up flip-flops. Now, in a 100,000-square-foot warehouse behind the corporate offices, three shifts of about 65 workers churn out 10,000 to 20,000 pairs of shoes a day, according to Brad Laporte, vice president for manufacturing.
By global standards, Okabashi is pretty modest: Annual sales are about $20 million.
But things add up. All told, the company has sold 30 million pairs.
The original Okabashi offering is a no-frills shoe. It is sold in huge drug-store chains for less than $15 a pair, competing against flip-flops that are mostly made in China.
The newer Okabashi line, started six years ago, includes sparkles, bangles and ribbons. It is sold in gift stores, boutiques and resort spas in places such as Sea Island, where it is often the only shoe of its kind.
Even with its modest success, Okabashi is bucking a long-term trend.
Millions of jobs have evaporated in the past dozen years, even though by dollar value of what is produced, U.S. manufacturing is at record-high levels. That trend — a mix of outsourcing to the Third World and automation for the production that remains — started in the late 1970s.
About 11.7 million Americans work in manufacturing now.
Not counting the lows of the recent recession, that is the sector’s lowest number since 1941. Back then, manufacturing accounted for roughly 33 percent of all jobs. Now, manufacturing is less than 9 percent.
Many companies have moved jobs overseas. Other companies start up and sell products that they never made here.
For example, Kigo Footwear, a Norcross-based start-up, has contracts with a Chinese factory to make its “minimalist footwear.”
The company originally hoped to make the shoes in the United States, but the costs were too high, said Kristin Parker, co-founder of Kigo.
Yet in the last couple years, China labor expenses as well as shipping costs have both climbed. Not enough to bring production to the U.S., but it’s a closer call now, she said.
It’s a more common consideration these days, said Mitch Free, founder and CEO of MFG.com, an Atlanta-based online market for manufacturing parts.
A number of factors — including changes in the exchange rate and the hassles of long-range management — have convinced a growing number of companies to “re-shore” jobs, he said.
But it’s still a trickle. The overall numbers still say you cannot make shoes in America.
So how does Okabashi compete with low-cost imports?
To keep down costs of production, the company automates much of what it does, while trying to eliminate waste in how the materials and products are moved and stored.
Yet Irvani said that the ultimate competitive advantage is not lower costs, but higher value: The footwear comes with a two-year guarantee. That’s because the company spends money on design and research, something that low-cost assembly lines generally don’t do.
“At one level, it’s simple. But, at another, it’s incredibly complicated,” Irvani said. “It’s like baking bread. They’ve been doing it for thousands of years, but try baking bread yourself and doing it on a large scale — try getting it just right. Every time.
“It’s a little bit of an art, as well as a science. You have to feel it. You have to look at it. The attention to detail is what gives you an advantage over the large manufacturer. A lot of what is sold is just junk.”
Still, the company has virtually no budget for marketing. So the company gambles on a combination of repeat buyers and having the satisfied customers tell their friends.
“We very much depend on someone buying the shoes and not knowing anything about them and saying, ‘My God, these are very comfortable,’” Irvani said.
Before they can discover that, customers who have not heard of Okabashi must stumble on the flip-flops in some store display.
The company pegs its hopes to a mix of selling points — the promise of a different fit, the sense of experimentation and the words printed on the tags: “Made in the USA.”
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