Steve Gunn, CEO of Blundstone, on the 150-year-old brand’s record-setting sales streak and why much greater growth is on the horizon.
There are late bloomers and then there’s Blundstone. How many brands can say they’ve experienced their most successful years more than 140 years into their lifespan? How many can say they’ve never looked better than at the ripe old age of 150? How many can say that their best years still lie ahead of them? Blundstone can.
The company is in the midst of what is likely the eighth consecutive year of record sales. Blundstone is super-hot, loved by everyone from Brooklyn hipsters to Hollywood celebrities to twentysomething women in Israel to longtime Aussies and Kiwis to rabid Canadian fans and markets the company is branching into for the first time. Its iconic Chelsea silhouette—the Blundstone 500, introduced 52 years ago—is embraced for its comfort, durability and versatility attributes. Blunnies, as they are affectionately called, are at the forefront of utilitarian footwear fashion, a macro movement that continues to gain popularity in an increasingly casually attired world.
But why Blundstone? Why is that arguably nondescript, brown boot leading the charge? Why did it get hot seven years ago and why has it gotten hotter with each passing year? It’s not sexy. It’s just a work boot, really. But therein lies the key to its success: Blunnies “work” on many levels for men and women and, as proof, CEO Steve Gunn, who has been at the helm for 25 years, says once a customer, likely always a customer. Word of the boots and the brand gets passed along and, in the digital age, Gunn says it’s gone viral—and that has “helped our brand immensely.”
In addition to internet-fueled word-of-mouth, Gunn points to a major shift, beginning in 2007, when Blundstone began changing its supply chain. “We started manufacturing leather footwear away from Australia and that meant we could be more responsive, trade in U.S. dollars and be closer to the market,” he says. “People became more confident that we could grow the brand.” Along the way, Gunn says Blundstone broadened its product range to target more potential customers, notably women who’ve come to the brand in droves organically. On top of that, the company got its backroom in gear to position itself as a global brand. “We got a lot of things fixed and we’ve been moving forward steadily since then,” he says, citing breakouts in Israel and then Canada as taking the business to another level. “That opened our eyes and gave us an enormous amount of confidence to keep pushing the brand forward.”
Indeed, Blundstone is running full speed ahead with its newfound “it” boot status, branching into new markets, expanding the product range (carefully) and continuing its metamorphosis into a global brand. But Gunn says there’s an overriding caveat to the growth plan: None of it can come at the expense of product. “We want people to want the brand for all the right reasons in terms of comfort, durability and looking great,” he says. “We don’t want to be just an overnight sensation. We’re happy with what we’ve achieved so far, but there’s a lot more to do.”
In some markets Blundstone is a mere baby with loads of runway ahead. In more established markets, product extensions are sparking new and renewed interest. You might call it a new old brand with various growth curves ahead by country, region and demographics. But when it comes to potential, Gunn believes the brand is just getting started. “We see ourselves across the world, just at the bottom of a rapid growth phase,” he says. “I’m anticipating that we’ll about double our size in five or six years and then double again in five or six years after that.”
Within the U.S., Blundstone currently has good exposure in the Northeast and Northwest regions as well as in California. Elsewhere, it’s still early. “We’re probably at 20 percent of our potential within our current offering and then we’ve got the opportunity to expand that while maintaining the Blundstone handwriting and probably double the business—and that’s still within footwear,” Gunn says. “We see heaps and heaps of opportunity in this market without ever being in discount stores or some major department stores that we don’t see as right for the brand.”
Just where is Blundstone seen these days? That involves a delicate balance between longtime partners, select national players and its DTC channel. The goal, Gunn says, is keeping everyone happy, which is no easy task when buyers are banging on the door. “We’ve always been quite selective with retailers, but we’ve been broadening that a bit because we’ve got to be fair to the consumer in that they’ve got to be able to find it,” he says. “We’ve taken on the likes of REI and Nordstrom in recent years and we’re looking at maybe one or two other possibilities to provide us with a reasonable amount of national coverage.” Along the way, keeping loyal to the independents who have carried the brand for years is a primary objective. “We’re one of those quirky businesses that still talks about loyalty and means it,” Gunn says. “We’re much more inclined to work with those who have supported us during the leaner times than to dump them.” That approach involves building out their walls to make the brand more important as well as operating a DTC site that doesn’t undercut on price or offer exclusives. “If it’s on our site, a retailer can buy it from us,” Gunn says. “We also started managing a separate stock this year so we don’t get into a situation of ‘we’ve got them, but you can’t buy them if you are a retailer.’” The overall goal, he says, is to reward its retail partners. So far, so good. “We’ve been getting positive feedback,” Gunn says. “As we head off to the likes of an Outdoor Retailer show, we see lots of smiles around the booth.”
Maintaining the momentum while keeping everyone smiling is the modus operandi at Blundstone going forward. To achieve that, Gunn believes in sticking to the attributes of quality and loyalty that have brought the brand to the dance. It’s taken 140-plus years for this wallflower to get its time in the sun, and the brand has no intention of receding into the shadows. At the same time, Blundstone is keen to avoid abusing its newfound popularity, unlike many pretty brands that have come (and gone) over the years. “We talk about never taking it for granted,” Gunn says. “There’s no complacency. Work hard, never stand still and never make a decision outside of what the brand is all about.” Gunn believes Blundstone can’t afford to act otherwise. (Perhaps humility is one of the perks of being a wallflower for more than a century.) “I don’t know if we have the brand strength to overcome that sort of behavior,” says Gunn, who will transition to a chairman role at some point this year. “Staying true to our distribution partners, retailers and consumers—those who have helped us get to where we are—is critical to how we go forward. We need to prioritize that over rapid growth. It’s served us well so far.”
How did 2019 rate for Blundstone?
Our financial year ends in June and that was a record year for us in all sorts of ways. We have every reason to believe this is going to be a record year too. In America, it’s been great so far and we’ve exceeded our expectations. Our goal has been to keep moving forward there as well as open new markets around the world, which have all been going well. And our traditional markets continue to perform above where they’ve been. Overall, we’re in a good space. It’s an unusual situation for a brand so mature to suddenly have a massive tick up. Now there are two ways of viewing that. One: What a fantastic job we’re doing. The other: What were you doing for the first 140 years? I guess we were positioning ourselves for the right time to strike. (Laughs)
Heritage brands like Blundstone, Dr. Martens and Birkenstock are trending strongly. For starters, it’s good company to be in.
It is. For us to even be put in the same sentence once upon a time with those brands would have been a dream. It’s great that we’re playing in the big leagues, if you like. But I think we’re a different company. I’m not suggesting for a moment that we’re better, rather we’ll go about being more obvious in the world a little differently. We won’t get to a point of mass marketing the brand and having it be available just about everywhere. We’ll keep it quite guarded and allow people to discover the brand rather than having it forced upon them. It will be interesting to see in 10 or 15 years where we get to in comparison to those sorts of brands. The other aspect to this is we’re likely to stay in the same hands and not destabilize. We’ll have that working for us.
There’s a growing hunger for authenticity in pretty much everything, and some heritage brands are benefitting.
I agree and, in the digital world, there’s no place to hide: You’re either telling the truth or not. We’ve been true to ourselves for over 140 years and we don’t have to make it up. We just have to tell our story in a way that’s meaningful. And telling the truth today is far more likely to win and hold consumers then something that’s invented. At the same time, society is dressing in a relaxed way. Brands that hit that mark are more attractive to consumers because they can wear them in more circumstances. Our brand is being worn in all forms of work and play, which is a wonderful position to be in. So the authenticity of our story, the quality, the versatility and the way that we treat people and the environment in the supply chain—all those aspects are being valued more and more by consumers.
And consumers today can do their own sleuthing online.
Yes. It’s a much smarter consumer. With so much information available to them it enables them to make better decisions. When I was in my twenties, my wardrobe was littered with things I thought I needed that I didn’t. That was the way people consumed, and I think that’s really changed. Our success in Israel, where 17- to 25-year-old women have embraced our brand, bears this out. I was speaking with a sales assistant in a store that didn’t sell shoes who happened to be wearing Blundstones. I asked her how big of an investment it was to buy them. She said it was three days’ pay. That’s a big investment for an 18 year old to make. But she added it’d been worth it because she’d worn them every day since she bought them. That young person, once upon a time, made a completely different purchase decision. I think it represents more of a permanent shift in consumer behavior, and it’s one we’re certainly happy about.
How will Blundstone maintain its momentum?
The key is to have consumers to never really want to take them off. So even if the Chelsea silhouette is being driven by fashion right now—and we’ll ride that wave while it’s there—we’re trying to convert people to always wanting to wear our footwear, which we’ve found to be the case, historically. We’ve got something in our makeup that makes people stick with us. Look at Iggy Pop, who was a hipster in the ’70s. He’s never left us. It still works for him. In Canada, which is our largest market, before we came along they’d never really worn gore-sided product. We’ve now got 700,000 units going into that market every year and it’s predominantly gore-sided, and we’ve got young people saying that they only wear our product. We have this mantra that our brand has got to be great but our product has got to be even better. We’re marketing our way to consumers’ hearts through our product, primarily.
Canada is one of the ultimate seals of approval when it comes to utilitarian boots, no?
Yes. What’s more, many who start wearing them in the winter soon find themselves wearing them year-round—like they do in Australia. The leather breathes, so it’s better for you than a synthetic product. But it’s also the fact that they mold to your foot and everything else doesn’t feel quite right. We hear these stories time and again; we don’t have to make them up. That’s a wonderful trait to have as a brand. It gives us a lot of confidence that we aren’t going to cycle in and out of fashion. We’ve never done that in any other market. The key to it is win consumers over for the right reasons, rather than hoodwink them into buying product. That’s not the kind of consumer relationship we want. We’re far more likely to retain a customer as well as have them tell someone else how great our product is. Word of mouth is still an incredibly important part of how we reach new consumers and, in a digital sense, that now happens at massive warp speed.
It helps that Blundstone has tremendous crossover appeal.
Yes. We talk about ages 8 to 80 and all demographics. Our broad appeal was reflected during a recent forestry dispute in Tasmania. The protesters and the company employees were wearing our boots, as were the people trying to separate them. Another example is Israel, where not many clothing items sell to both secular and Orthodox Jews. We just might be a first. What unifies our customers is the comfort, versatility, longevity and value—aspects that any consumer is looking for.
Do you plan to expand far beyond your utilitarian boot roots?
We have been subtly expanding, but we’re not going to lose the Blundstone handwriting. It’s still going look like a Blundstone and belong in the range. There’s quite a few profiles that we can adopt that are true to the brand. We also think there’s quite a bit we can do within the profiles we currently offer to keep the brand invigorated.
Like sneakers, perhaps?
Only at the very edge, maybe active-leisure styles. We’ve also had sandals before, so that’s a question mark whether we go back at that category. We’re not going to have it just so we can present a wall of brand. Others do that and we sense they’re losing brand identity a bit. We can’t afford to be one of those brands.
What else can Blundstone afford not to do as it navigates this explosive growth curve?
There’s lots of evidence of brands burning bridges, like in the supply chain—putting unrealistic expectations on factories, taking orders away at the last moment and being horrible about pricing. We’re taken a different approach: We’re only as good as our factory partners allow us to be and we want them to be just as passionate about our brand as we are. Being more sharing in the process makes us attractive to do business with and we might get a better result. Now I’m fortunate to be in a family-owned business, where people have got their eye on being here in 150 years’ time, so it’s all about sustainability than short-termism.
Sustainability was arguably the word of 2019. How important is that aspect to Blundstone’s business model?
Our brand values require us to be respectful to the earth and people. We’ve been going down that path way before it became mandated by various organizations. It’s been fairly easy to tick a few boxes where we already comply. We’ve also made sure our supply chain is doing what it should in terms of labor, ethics and the environment. I doubt it’ll ever be a ‘done job,’ so we need to be ever vigilant. Beyond that, we’re taking steps to improve our carbon footprint, even though we’ve been getting horrible leadership from politicians on that front. It’s hard to even position policies due to a lack of guidance. In the meantime, we’re just following a commonsense approach to packaging, like getting rid of single-use plastics in the supply chain, and we’ve begun short-haul flying in replace of trucks. Our expanded partnership with REI has been another inspiration in this regard. They’re the most advanced in this space that we do business with and we wouldn’t have been able to establish a foothold there if we didn’t meet a pretty high standard.
What are main goals for 2020?
Obviously, marking our 150th anniversary is going to be big part of this year. We’re going to celebrate it with special products and activations, like our first pop-up store in the U.S. that opened (in partnership with DNA Footwear) recently in Brooklyn. We’re 150 years old, but in many markets we’re only a couple of years old and still being discovered. It’s an interesting mix of celebrating the past while relating that to a future.
Do you envision more pop-ups or flagship stores going forward?
The pop-up level is what we’ll be doing more so in the short term. To the extent we’re still fairly seasonal in the States, that format lends itself to a part-time approach. It also means we can test sites. We can be experimental and learn along the way. We’ve always had pop-ups in our plan, but with Daniel Kahalani (owner of DNA Footwear) coming to us, it pushed the idea forward a couple of years. Daniel knows how to connect with consumers and he’s done great with our brand for years. His store standards are high, his customers get a great experience and, obviously, Brooklyn is high on our target market list. It was a natural to go into partnership with him and it’s been a wonderful collaboration so far. We’re pretty certain we’ll be doing more.
Any other big goals for 2020?
On a personal level, I’m in in the throes of transitioning to a chairman role and we’ll be seeking a new CEO this year. We’re open to someone from outside the company, but there’s been some nurturing of people inside as well. Whatever we decide, it’ll be done super carefully so we maintain our momentum and set ourselves up for the next 10 or 20 years. The last thing we want is somebody upsetting apple carts. My role will become more strategic. I’ll be able to keep an eye on emerging trends and pass that perspective down to management. The business has grown to the extent where we need to manage the future a lot more than previously. Our business is going to be very busy for the next 10 years, guaranteed. We’d be kidding ourselves to believe that the CEO will have the spare time to do that stuff.
Looking back 25 years, did you ever envision Blundstone’s epic transformation and that one day you’d be transitioning to chairman?
We just had our first child, so I was just trying to work out how the heck I was going to get a decent night’s sleep. I didn’t think I’d work for anybody for 25 years, to be honest. But the reason that I have stuck at it is not only because of advancement, it’s that the job has changed so much. Even though I’ve been called the same title, I reckon I’ve done four different jobs because the needs of the business have changed. I could reinvigorate along the way.
Which of those four jobs did you enjoy most?
All of them have been good in their own way, but it’s the current one. The first three were building blocks and we didn’t know if the work we were throwing ourselves at would pay off. My job now is the rewards of those efforts. Looking back, the hardest job was changing the supply chain. It was the most intense period and we’d only get one chance at it. There was negative press around it in Australia and the global financial crisis came along around the same time. We were learning how to source in other countries while keeping the fires burning at home. We were spread thin and burning the midnight oil regularly. But it gave us an enormous amount of confidence once we completed the transition—there wasn’t anything you could throw at us that we couldn’t overcome. It showed we could rally when we needed to and, for a small- to medium-sized company, that’s a wonderful trait to have. There’s comfort in knowing you can take a few hits in the early rounds and still be standing.
When was the transition completed?
Fully, by the end of 2008. But we were still in a learning mode for a few years after. We needed to work with our partners to get the product just right—using leathers wisely and cutting it properly. We were doing that in several countries but primarily with our initial partner in Thailand, who shifted production about 18 months later to Vietnam. They were pretty much the first manufacturer we met and we fell in love with them, which is a dangerous thing to do in life. But it’s proven to be a fantastic relationship. If anything, the quality went up and we’ve applied that production model to other factories around the world, like in Leon, Mexico. We’ve increased the size of their business many fold and they’re just as passionate about Blundstone as we are. In business, you can work really hard, but somewhere along the way luck has to go your way. This partnership has been our massive slice of luck.
What do you love most about your job?
Once upon a time I would have answered that no two days are the same. In more recent times, it’s providing stewardship over what’s been a major transitional period and the world opening up to Blundstone. You don’t always get the chance to pause and take it all in, but on the occasions that I do, I appreciate what our team has achieved. So job satisfaction is my answer now. The number of hours spent by a vast array of people…the success wouldn’t have happened if they weren’t super-committed. Most of that has been out of a sense of want, and that’s what makes a smallish team achieve big. We have a fantastic team of people. We’ve found a way to become a brand that now has a supply chain, a relationship with consumers in approximately 70 countries and is viewed by the world very differently. It’s been a massive transformation that happened to occur under my watch and it’s gone well. I guess when they push me off in a few years, that’s what they’ll say about me, and I’m proud of that. I’ve been lucky to inherit this opportunity. It’s been an enormous amount of fun and a rewarding quarter of a century.