Online sales kick in America to forge future for Tasmanian icon Blundstone

Women and Americans are boosting sales for the boot maker that traditionally supplied safety boots to workers in heavy industries.

Former Blundstone CEO turned chairman Steve Gunn and board member Damien Bugg at the company’s head office in Hobart Tasmania. Picture: Peter Mathew

In his 37 years with the Blundstone company, Darryl Wilkes, had never seen anything quite like it.

“In the Thanksgiving sales in America last November, we were selling 50 per cent more than we did last year. In the height of the frenzy, we were selling a pair of boots every three seconds,” says the Tasmanian boot icon’s long-serving head of operations, who is now joint CEO of the company alongside the former head of brands and design, Adam Blake.

“Online has been a big part of our strategy in the US. It continued to grow exponentially throughout 2020. We are very much a lifestyle brand globally. Australia is the odd market out where we are predominantly focused on the work and safety markets. Online is now 20 per cent our sales in America and growing rapidly,” Wilkes says.

The Blundstone company sells more than 2.7 million boots a year in 70 countries but America is its big growth engine.

While the boot maker retains its strong market position as a supplier of safety boots to workers in heavy industries, more than 50 per cent of purchases of its products are now being bought by women, especially in America.

Former long serving Blundstone chief executive Steve Gunn - who became chairman in October to focus more closely on strategy - has previously said he expects that by 2025 America — where Blundstone does its own distribution — will generate more than $300m or 30 per cent of the group’s revenues, up from the current 20 per cent.

In their first joint interview since taking over their respective roles, Wilkes and Blake are standing by his prediction.

Wilkes says the unusual decision of the Blundstone’s board - which includes former commonwealth Director of Public Prosecutions Damien Bugg and Tasmanian berry farmer Richard Clark - to appoint joint CEOs paid homage to how large the business has become.

“And for Blundstone being a long standing family business, stability is paramount,’’ he says.

The Blundstone family started making boots in Hobart in 1870 after John and Eliza Blundstone emigrated from Derbyshire in England 15 years earlier.

After striking financial difficulty at the turn of the century they sold out to the Cain family, who ran the business in the depths of Great Depression.

In 1932 they too sold to the Cuthbertsons, who have now been making boots for about as long as the Blundstones.

The late Harold Cuthbertson took over as managing director in 1953 and ran the business successfully for 51 years.

Blundstone is now 100 per cent owned by his two daughters, Helen Dickinson and Anne Routley, who are also directors of the company.

“I know the family well, they have always been visual within the business. They are invested in the brand, the company and the people. That is why we have these long serving employees like myself. That comes back to the family’s involvement,’’ Wilkes says.

Adam Blake, who joined Blundstone in 2015, says the values of the Cuthbertson family are still very present in the business.

“It is still very much a values-based, families business,’’ he says.

Somewhat surprisingly, Blundstone’s Australian sales held up during COVID as sales of work and safety products grew 20 per cent year on year.

“A lot of our products were essential service products. So having a facility that enabled companies to get them was important,’’ Wilkes says.

“We are holding that 20 per cent in Australia. In our overseas markets, it is a lot stronger than originally predicted. We thought we were going to lose 2-3 years in trading when COVID hit. Now in most markets we think we are only losing one. But we can see a lot of people doing a lot more online,”

“Obviously COVID has been a downward turn for everyone but we have performed better than when we did the projections back in March.”

More than 75 per cent of Blundstone’s staff still reside in Hobart despite it being one of the first boot companies to move the bulk of its manufacturing offshore in 2007 when it shut its 137-year-old Hobart factory.

While the plant was efficient, it struggled to meet overseas demand that came in the northern winter, which constrained the company’s export capabilities.

Blundstone now manufactures across half a dozen sites globally, the biggest being in Vietnam followed by China and India.

It has led to criticism of the quality of its products compared to largely Australian-manufactured brands such as Rossi, Mongrel and Redback.

Some have claimed its Tasmanian-branded label is even misleading.

“We do have a global supply chain and we manufacture in half a dozen locations, including Hobart. We want production close to where we are going to sell the product,’’ Wilkes says.

“This is a long-term strategy. We have plans 5-10 years out to be able to meet our projected demands. To set factories up is a 3-5 year exercise. To be competitive we have to remain global. That will dictate the future. Look at all footwear manufacturers, we are all dealing in the same places. We are all using the same materials and supply chain.”

Last February Blundstone commissioned a new design centre in Hobart.

“We have increased our employment levels in Tasmania over the past 12 months and we now directly employ 120 people in Australia. We have doubled our workforce in Australia over the past five years and it is in high value areas as well,” Wilkes says.

“People overlook the fact we have always been a Tasmanian business. People are starting to realise that in this era, it is important we have remained a Tasmanian, family owned business.”

In the year ahead the new CEO’s plan to continue to invest heavily in Blundstone’s core boot brands.

Intrastate and global travel restrictions continue to create challenges, especially for building new business relationships.

“There is a big difference between having a Zoom meeting that is very focused and structured is different to building a relationship. We have created digital showrooms but they are very focused,” Blake says.

“The year ahead depends on our international sell-through during the northern winter. We don’t think it is going to be as good as last year but hopefully we may not be far away from it either.”