Sourcing ethical footwear manufacturers can be a minefield – particularly for brands looking to produce offshore. Earlier this year, the high-profile owners of Gideon Shoes undertook a research trip across Asia. Today they manufacture in Australia. Erin O’Loughlin discovers why.
More than six months on from his tour of Asian footwear manufacturers, there is one little individual that Rupert Noffs remembers with piercing clarity. “I saw a girl in pink pyjamas sitting next to her mum... kids in their pyjamas with no masks on and no gloves, making these shoes.”
It was an unexpected vision for Noffs, who undertook the 12-day research trip with his brother Matt. Yet as the pair made their way from Vietnam to China, it was a vision too often repeated.
“The factories were falling down, the machines, some of them weren’t working properly. No one was wearing gloves, no one was wearing masks. Matt and I actually filmed it with our iPhones. It was just scary.”
It threw a fairly large spanner in the works because the pair were on a mission to find an ethical shoe manufacturer. It was a non-negotiable requirement: the Noffs brothers weren’t sourcing a manufacturer for any old shoe company, they were finding suppliers for Gideon Shoes.
Founded four years ago by Gideon Silverman, Gideon Shoes got its start in Sydney’s weekend markets. Rupert and Matt, full-time staff members of the Ted Noffs Foundation and grandsons of the charity’s namesake, saw an opportunity in the fledgling label.
“Matt went down and met [Gideon] and told him about the work we do at Noffs with Street University, which is based in south-west Sydney, a space for marginalised kids aged seven to 27,” Rupert says.
“It’s just a place for people to go and find out what their true potential is. Kids out there really don’t have anything but they’ve got so much to give. It’s really hard finding funds for that.”
Silverman came to the table with a new fundraising idea, Noffs says.
“Gideon said, ‘How about I give you five bucks from every shoe I sell?’ Matt said, ‘Yep, I like the sound of it’.”
The label was picked up by chain retailer General Pants and the brand’s statement canvas shoes were on shelves throughout Australia.
Then, in late 2009, Silverman sold the business to the Noffs charity. It was the start of a change of direction.
“We thought, ‘well hang on, let’s rebrand this whole thing and really make it something cool’,” Noffs says.
In the past few months, the brothers have applied for funding from the federal government to help run the business, opened a head office in Sydney’s Surry Hills and hired close to 40 young people to work in it.
“We want it to be a shoe label run by kids for kids, the people who are going to buy the shoes,” Noffs says.
Perhaps the most important change is that every single dollar from the sale of the shoes – not just five dollars – goes back into funding the Foundation’s Street University.
“I think we are the first Australian charity to go into fashion,” Noffs laughs. “So when you buy the shoes you look good and you feel good too. I always say ‘soles with souls’.”
It’s not just kids in Australia the Ted Noffs Foundation is thinking of, however.
“In the beginning, we were like ‘wouldn’t it be awful to have our shoes made from a sweat shop?’” Noffs says. “Then we were thinking, ‘What is a sweat shop? What does it even look like?’
“We wanted to go over there and see first hand. There’s no chance in hell that we could ever have a charity-owned shoe label for kids and have these poor kids in their pyjamas making our shoes.”
So in January this year, Rupert and Matt packed up and went to Asia. They were looking for an ethical shoe manufacturer that complied with the International Organisation for Standardisation’s (ISO) 9001 certificate. Requirements of ISO 9001 include a commitment to quality, to monitoring of processes and products and adequacy of resources.
They were also after a manufacturer that could meet their required order of 20,000 units. The Noffs commenced their search in Vietnam.
“We looked on the internet and Googled shoe manufacturers in Vietnam and called them up and said, ‘We’re coming over. Can we come and see your factory and come and meet with you?’” Rupert says.
“It was interesting. In Asian countries, doing business is completely different from doing business in Australia. The meeting doesn’t last 10 minutes, it lasted two days.
“We thought, ‘This is going to take a lot longer than we expected’. But we didn’t mind because we wanted these shoes to be amazing, look cool, and be ethical.”
After not being able to strike a satisfactory deal with the Vietnamese manufacturer – “wearing shorts in a business meeting in Asia is a no-go I found out,” Noffs says – the pair began a tour of factories in China.
They went to six factories over nine days and were quoted an average of two months’ production time and prices that Noffs can’t disclose but which he concedes were “very low compared to Australian manufacturing”.
But the conditions of the factories continued to be a problem.
“The factory we visited in Vietnam had okay working conditions, and I mean just okay. The staff looked like they were well treated.
“In China, the factories were standing next to their living quarters and I’m talking 10 steps away. We drove through what was like Sydney city but [was] just masses of shoe factories and housing blocks where all the workers lived and worked.
“When we said to these people, ‘Do you have this certificate, ISO 9001?’, they all said ‘Yes! Yes! Of course we do!’ But for them, ISO 9001 good working conditions means, are the machines working? Is there a roof on the factory? It didn’t mean the staff are wearing gloves, wearing masks, people are older than the age of 12.
“We did find somewhere on the very last day that we were about to go with but we [realised] we couldn’t do it.”
Back in Sydney, the label’s operations manager floated a new idea – why not forget about China and manufacture here in Australia? “We thought, ‘yes, let’s do it.’”
The pair found what Noffs believes is the only remaining shoe maker in Australia, but even the manufacturer questioned the brothers’ sanity.
Gideon Shoes now uses a manufacturer based in south-west Sydney. That company put the label in touch with suppliers of Australian-made canvas and leather which the label now uses in its shoes.
There is no minimum order requirement and each order takes an average of three weeks turnaround time.
“The difference between this Australian factory is the workers are all adults,” Noffs says. “They get proper pay. They don’t live on the same premises as their work. They take occupational health and safety seriously and look after their staff.”
The manufacturing costs are eight times higher than those quoted to the Noffs in Asia, but Rupert says the decision to stay onshore has given them something more important: “peace of mind”.
The label is working through sample ranges at present with product to be available to consumers before the end of the year. In addition to its established canvas product, which will retail between $40 and $60, the label is also introducing leather sneakers. The leather product will retail from $160 to $200.
No longer stocked by General Pants, the reinvigorated Gideon Shoes is concentrating for now on running its own retail operations rather than looking for stockists.
“We’re thinking at the moment, let’s just concentrate on our own space here on Chalmers Street [in Surry Hills] and online, see what everyone thinks and then we’ll probably contact some others.”
While the brand is serious about its ethical credentials – and has begun meetings with accreditation body Ethical Clothing Australia – its owners know consumers don’t wish to be preached to.
“We’re not trying to change the world, we’re not standing on soap boxes and telling people it’s all about being ethical,” Noffs says.
“It’s just about peace of mind, knowing that what you’re wearing isn’t made by a 12-year-old girl who should be in school.
“You can work in the fashion industry and still have a heart, and that’s what we want to change.”
Ship to shore
Why are both independent and major Australian footwear brands looking to manufacture offshore? Industry information firm IBISWorld analyses the big picture.
• The Australian footwear manufacturing industry has undergone major consolidation since the 1990s. Total production fell from 14.4 million pairs in 1995/96 to 8.1 million in 2000/01. According to an IBISWorld analysis, only 3.1 million pairs were made in Australia over 2008/09.
• Footwear manufacturing is labour intensive as it is difficult to automate completely. This lends itself toward small operations
and the industry is a mixture of a few large firms and many small establishments. Together, the industry’s four largest players – including Pacific Brands and Blundstone – account for around 31.2 per cent of the industry. Many of these companies source much of their footwear from overseas.
• Local manufacturers only produce a small portion of footwear bought in Australia with imports increasing their share of the domestic market. According to research by IBISWorld, imports constituted 75.3 per cent of the domestic market in 2008/09, up from 63.7 per cent in 2003/04. China is the biggest footwear supplier to Australia. More than 65 per cent of footwear entering Australia originated from China in 2007/08 and nearly 60 per cent of all footwear in the world was manufactured there.
• Australian footwear importers have benefited from tariff reductions in recent times. Imports rose by 10.2 per cent in 2004/05 when the footwear tariff fell from 15 per cent to 10 per cent. Over 2009/10 this was reduced to five per cent.