Footwear Insight

14 • Footwear Insight ~ March/April 2019 footwearinsight.com INTERVIEW In Conversation: SAS Shoes By Bob McGee W e recently visited the San A n t o n i o S h o e m a k e r s (SAS Shoes) offices in San A ntonio, TX and chatted with CEO Nancy Richardson. The com- pany, founded in 1976, is known for its handcrafted shoes manufactured in Texas. "In 1976, Lew Hayden and Terry Armstrong found themselves working for another shoe company here in San Antonio, but for various reasons that employment didn't work out for either one of them," Richardson explains. "Both of the men felt very strongly that we could still make good shoes in the U.S. and they wanted to do that. So, they scrapped together their funds. Mr. Armstrong sold his house to help fund the company. Everyone thought they were a bit crazy frankly because why start another shoe company in the U.S. when other people are moving overseas? But they were really fully committed to making shoes in the U.S." From 1986 through 1992, Richardson ran the finance and accounting department for SAS before leaving the company and then coming back as CEO in 2012. Here, she shares background on the company, how it thrives in the comfort market and the challenges of domestic manufacturing. What is the distribution breakdown for SAS? "Independent shoe stores are still by far the majority of our business. We do have approximately 130 SAS retail stores across North America. But wholesale and inde- pendents are very important to us… The independents are where you get a lot new of new customers because the store will introduce them to the brand. International is becoming more and more important to us. We didn't focus on it for a very long time. We actually only hired our first sales rep to focus on international sales about two and a half years ago. It is very new, but we are now exporting to 18 countries, so it's coming along nicely." How does the SAS brand stand apart in the comfort casual footwear segment? "We are shoemakers first. We may not be the best retailers and we may not be the best marketers. But I truly believe that we have one of the best shoe-making teams in the world, and certainly here in the United States. We still start with a block of wood and actually carve the last. We do that with every new shoe... I believe that our deep shoe making experience is really what sets us apart. We develop everything internally." What are the challenges of producing U.S-made footwear? "We have two factories in Texas. The fac- tory here in San Antonio and a factory of equal size in Del Rio, TX. Shoemaking has changed since I've come back in 2012. Really, shoemaking is changing because there's better technology. There's a lot of new materials being developed, so there's a lot of forward progress in the shoe industry that gives more opportunities to use differ- ent materials and maybe automate or use technology in a way that improves the shoe. What has really changed since I've come back in 2012 is distribution channels much more so than the manufacturing process." Can you tell us about SAS Shoes' con- tract to produce shoes for the military? "In 2017, the military put out a request for Berry Amendment-compliant shoes. The Berry Amendment says every stitch, every thread, every eyelet, every piece of the shoe has to come from domestic suppliers and be produced in the U.S. It was the first time we've ever looked at applying for a government contract. But our shoemaking team felt very strongly when we became aware of the opportunity that we make great shoes. And this is San Antonio, which is very much a military community. They came to me and said 'We would like to try to bid on this con- tract. We think we can make a great shoe and support our troops.' So, we did that, and the contract was awarded December 20, 2017. We started with setting up our production in January of 2018 and we delivered our first pairs to the military in July of 2018, although we understand that they're just now starting to hit the various military bases. There were three contracts awarded: SAS, Propper and New Balance. We were lucky enough to win the first and largest; Propper, the second; and New Balance, the third. The initial term of the contract is 18 months. The military can renew for a second 18 months. The contract has a maximum term of 36 months. And for us it's a maximum of 398,000 pairs." Tell us about the brand's entry into per- formance. Is this new for 2019? "When we created the shoe for the mili- tary, we looked at it and said, 'We think with some small changes this is a great shoe for the commercial market also.' And it filled a gap in our line. We've had athletic or active shoes for a number of years, but we had nothing that was a true performance shoe. And so we took what we created for the military and made a few adjustments. We are now shipping for the commercial market. We intend to go back to create some other styles and colors. They're going to be predominantly in independent shoe stores as well as on Zappos and on Shoes.com at a retail price point of $199." What about the marketing focus of the brand? SAS had a billboard in New York City's Times Square? "Yes, we actually did a billboard in Times Square last year and we still have it this year. We did a marketing study a few years back, and unfortunately or for- tunately, we share the SAS logo with a couple of other companies—a software company and Scandinavian Airlines. We didn't have quite the brand recognition that you would want. When Rockport went into bankruptcy, the billboard com- pany actually reached out to us. We've never done this. And New York is a place that gets a lot of tourists. So let's do it. We can change it every week if we want, to play around with it see what messages seem to resonate. And we actually got a lot of really good feedback." l PODCAST Q&A This interview has been edited from a podcast conducted by senior editor Bob McGee. Listen to the full interviews on the Sports Insight Extra podcast page at sportsinsightextra.com/podcast.html. You can also find the Sports Insight Extra podcast on iTunes, Spotify, Soundcloud, Stitcher and Google Play. Nancy Richardson, CEO, San Antonio Shoemakers.

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