In December of 2019, pre-killer pandemic and subsequent economic collapse, the business outlook for Keen Utility was quite bullish. Record employment and a booming stock market served as the backdrop for Chris Heffernan, then general manager of the company’s work division, to go all in for 2020. The brand been on a roll over the past few years, climbing the market leaderboard to top-three status, and Heffernan believed the coming year would be even better—he projected a 30 percent increase in year-on-year sales.
“The economy was going great, employment was high, boots were moving…It was all very healthy,” Heffernan recalls. “So we bought a ton of inventory.” Specifically, Keen Utility transitioned one of its biggest boots to a higher performing outsole and bought deep based on the style’s proven track record. In addition, Heffernan invested heavily in the brand’s athletic-inspired work collection, which had caught fire the prior year. “We literally bought 40 percent more inventory than we needed for the whole previous spring season,” he says.
This was no reckless gamble. Heffernan possesses years of work footwear brand management experience, having been at Timberland Pro in its salad days before managing Honeywell’s footwear division (led by Muck Boot and Xtratuf brands) and stopping briefly at Wolverine. He knows a good work shoe when he sees one, and he knows what levers to pull and when to pounce to take a brand to the next level in the category. Heffernan was confident that Keen Utility, at the dawn of a new decade, met the criteria.
Then the entire world changed, and even the best-laid plans went out the window as the Covid-19 pandemic took hold. In mid-March, with countries falling into lockdown like dominos, Keen shifted into crisis management mode—starting with daily 6 a.m. global conference calls. “We thought we’d be down about 35 percent for the year,” Heffernan says. “So we snapped pretty hard in terms of cutting expenses, overhead and people.”
Named general manager of the entire company in the spring, Heffernan had his work cut out for him. Fortunately, his military training—he’s a former U.S. Navy jet navigator—has come in handy. Specifically, he drew on his training in leading people during stressful situations. He credits a former officer’s sage advice: always put the team’s needs ahead of one’s own in order to get the job done. “I’ve always taken that to heart: Make sure your team is fired up and feels empowered to do their jobs. Trust them and take care of them as best you can,” Heffernan says.
Of course, that’s easier said than done when you’re facing a volatile new normal. There’s no industry playbook for the pandemic-induced fallout. What’s more, Heffernan had to get up to speed on Keen’s outdoor and kids’ divisions—overnight. “Inheriting such a large team—and having to do it over Zoom—has been a fascinating learning curve,” he admits. “But I love it. I’m always up for a good challenge.” Like all good leaders, Heffernan credits his team for implementing the changes—atop increased workloads. “Everyone is killing themselves trying to do the right thing for the company, our retail partners, our customers and the planet,” he says. “Being with a great group, fighting that good fight and trying to make sure everyone is ok has been incredibly rewarding.”
Heffernan cites several moves that have worked particularly well for Keen. The first, made at the onset of the pandemic, was donating 100,000 pairs of shoes (a $5 million value) to frontline workers as part of its “Together We Can Help” initiative. “In times of global crisis, Keen always goes right to work to help out,” Heffernan says, noting that allowing consumers to nominate the recipients added another layer of connectivity with the brand. “It was a huge success,” he adds.
Soon after, Keen converted a production line in its company-owned factory in Thailand to create masks. To date, Keen has donated 250,000 masks, including 15,000 to fellow Portland, OR–based Fred Meyer grocery stores last spring. Word quickly spread of Keen’s mask-making capabilities, and paid orders have poured in to the tune of nearly nine million masks. “We’ve had a mask success story that we weren’t even thinking about until March 13th,” Heffernan says. “It’s been a huge blessing for our business—enough to move the needle and save some jobs.”
Another key decision: Keen didn’t pull the plug on production. The belief, Heffernan says, was that business wouldn’t evaporate entirely and that the inventory coming in (hiking, sandals, work and kids’) might still sell. (This wasn’t containers full of pumps and wingtips.) “We felt it was premature to make that call, but we could slow production down if we needed to three or four months down the road,” he says. “Whereas, many of our competitors turned production off immediately and now a lot of retailers are short on product. We’ve been getting a lot of calls, and a lot of it is new distribution. It’s been a good opportunity.”
Next up: Keen chose not to furlough its sales team. Instead, Heffernan first instructed them to extend dating by 30 days and, soon after, had them offer a Fit Shield that Keen developed to create a safe in-store fitting experience. “Many retailers were just so unprepared in how to service customers once they reopened, so we gave them a kit on how to help them succeed,” he says. Perhaps of bigger significance, Heffernan invested in training its sales reps on all aspects of digital marketing. “We got their websites up to speed and taught them how to engage their accounts digitally during the downtime,” he says, citing instruction on how to present a collection over Zoom so the brand and the product look good as one example. “We’ve worked triple time to help our partners, and we’ve had a lot of positive commentary and are seeing it pay off now.”
Still, Heffernan doesn’t anticipate smooth sailing anytime soon—not without a vaccine/cure, for starters. The company is still operating in crisis mode, albeit at a toned-down level. (The 6 a.m. conference calls only happen a couple of times a week now.) That’s because Keen has pivoted during the pandemic, and weathered 100-plus days of BLM protests and riots as well as record wildfires. Though 2020 has done its best to deal Keen crippling blows, the company is still chugging along. Heffernan takes great pride in this, and he’s confident that better days lie ahead. “We’re pretty bullish on next year,” he confirms. “There are a million questions with the virus, but we’ve learned to be in inventory on our best products, and if we’re going to do something big, to do it in a limited number because no one has the appetite for adopting a ton of new stuff right now. Hopefully we can steal a little share in this game and keep growing. I think we’ll be all right.”
A pandemic, lockdowns, protests, riots, wildfires…what else can 2020 throw at Keen?
A swarm of locusts has got to be around the corner. I mean, this year has been endless and unbelievably challenging to manage through. During the wildfires, the air quality index here was over 500. Beijing is about 70. Being in the worst place on earth for weeks to breathe air says a lot. It has taken a toll. We’re just begging for some level of normalcy to return in any way, shape or form. But I’m so proud of the team who has worked triple time. We have great results to show for it.
Was there ever a point where you, personally, felt you might hit a breaking point?
Oh, yes. The mayor lives across the street from my family and the nightly protests outside his house would go until about 2 a.m., then the police would arrive and to try and break it up by 3 a.m. and I’ve got to be on a 6 a.m. conference call. A number of our employees had to be temporarily evacuated from their homes because of the fires. Being uprooted like that is terrifying. We also have a lot of workers with young kids and many of them, once they get home, have to take on teaching duties. Trying to balance work and keeping your first grader focused…it’s all very trying. So a lot of long nights and long days, but we’re getting there. It’s gotten better lately, because the business is really working out given where we thought it would be. So that’s awesome, but people are tired.
As the day-to-day leader, how do you keep the team’s drive going without them crashing and burning under such stressful conditions?
One: a lot of communication, which we could always do a better job at. Just letting everyone know how we’re doing results-wise has really helped. Informing them that their hard work is paying off and if we hit certain milestones, may we’ll be able to rehire some staff. So lots and lots of cheerleading, overall.
The FDRA (Footwear Distributors and Retailers of America) has described the current state of the industry as the worst in history. Is it?
It’s the most confusing time ever. But there’s tons of opportunity, which we are excited about. For example, everyone has learned how important digital marketing is now. That’s where the eyeballs are. If you’re trying to build a brand, product and a loyal following, then you better get smart quick on digital marketing. How to reach them, talk to them, educate them, know them, embrace them…that goes for brands and retailers. It’s also a great time to be in the outdoor market as there are loads of opportunities. So there’s this upside for Keen up against this horrible pandemic. We’ve got a million different dynamics happening at once, from the election, the economy, job losses, people being overwhelmed…it’s just been crazy. I’ve never seen so many forces come together at once.
Is Keen actually well-positioned for this pandemic?
Trust me, the whole thing has been absolutely horrible and we could have lived without all of it. That aside, I think it’s been helping the outdoor industry, which had been flat and hurting for the past number of years. It’s good to see people rediscovering the outdoors and what that can do for their mental and physical well-being. We’re encouraged on that front. It’s helping our business, but it’s not a given and there’s lots of competition in that market.
Was there any so-called pent-up demand once stores began reopening?
The pent-up demand we’ve seen is in hiking and kids’. Those categories seem to be really moving, and I think REI would tell you the exact same thing. Winter products are starting to move now as well. Our accounts are reporting that they’re having hard time keeping up with inventory. People need to plan for winter.
Speaking of which, the decision to keep making shoes turned out to be quite fortuitous.
Honestly, had we not owned our factories it would have been easier to cut production. We wanted to keep them employed. Plus, we had everything lined up, so we decided why not at least make the stuff we have, get it here and maybe something will start to click. We also knew that we really needed to up our digital marketing efforts on our website and feed any orders made there as well as from Amazon, Backcountry, Moosejaw, etc. that were still open. So why not try and capture as much market share during that time as possible. In addition, many of our Utility customers were still on job sites and warehouses were cranking. Also, a lot of those retail accounts were allowed to stay open as essential businesses. While our at-once sales were depressed, they were still significant. In fact, our Utility sales are above where we were at this point last year and we’ll likely be up for the year.
What’s your outlook for Spring ’21?
I think the outdoor category will see a lot of dynamics that Utility already has. Utility is about an 85 percent at-once business, whereas outdoor is almost the exact opposite. But I think at-once need is going to be really big this spring, and we’ll have inventory for our accounts. Maybe by next fall we’ll see more normal buying patterns.
Can you expect more normal buying patterns when Spring ’21 could be anything but normal?
That’s a good point, but we’re kind of blessed in having big sandals and hiking businesses. Those work 12 months a year and can also offset each other. People are still going to go outside, with or without Covid-19, next year. It’s more a decision regarding how many new great ideas can Keen bring to market in this climate? We’ve had to scale back on that. Let’s just do a couple, but let’s do them really big. We’ll see what happens and, in the meantime, we’ll make sure we’re in stock on the basics that we’re confident will sell.
Is it, in fact, a new normal? Can retailers survive these conditions, short of a second lockdown?
I think footwear is a little blessed because of the strength right now in the outdoor and running markets. Some of those retailers will probably thrive. But all retailers better learn the digital aspect. How are you going to reach people, because your stores may not be open? You still have to be able to engage with customers. If you’re not, then it’s going to be a lot harder to survive. So hopefully everyone has gotten a little smarter, more analytical and can move forward efficiently and effectively.
Can the industry ever go back to remotely like the way it was?
I think lots of people want that to be the case. But, from a broader perspective, the world has changed greatly and likely will never go back completely. Hopefully, we can at least get back to it being ok to shake someone’s hand again, right?
Do you see Keen exhibiting at trade shows like before?
I don’t. I think everyone is realizing that they can survive without them. Any shows that we do attend, hopefully we’ll find better reasons for doing so and make sure it builds our business.
Despite all that 2020 has thrown at Keen and you personally, are you still optimistic about the business overall?
I go back to Admiral James Stockdale who said you can’t lose faith but you’ve still got to face the brutal reality and deal with it. I hope a vaccine comes quick, that it goes smoothly and science prevails. But I think we’re going to living like this at least another six to 12 months. I hope, at this time next year, we’re having a different conversation.
Will the presidential election have much impact on Keen’s business?
I think we’ll be fine, from a business standpoint, with either outcome. But we’re not taking sides, other than we just want people to vote. We’ve plastered posters of “vote love” all over our building. It’s from a collaboration we did this fall with the Jerry Garcia Foundation that features some of his artwork on select styles. It comes with a matching mask. We donated funds to his foundation, which is trying to get the public to vote.
People want to feel good about the brands they buy—that the company is not run by a bunch of corporate jerks. Keen has that “good guys” ethos.
Keen has an amazing brand story. But we’ve been way too humble and haven’t talked about it enough. I’m not saying we have to brag, but it would be nice for people to know how much good Keen has done over the years.
You’ve worked at lots of brands, what does Keen have that those might not?
It has soul. It has a strong ethos. I loved my time at Honeywell, but I always struggled with what the brand really stood for? It’s just nice to be at a place where you feel like everyone is there for the same reasons and enjoys and appreciates working there. You feel like you are winning as a group and making that place better. I think Timberland, back in the day, had that feeling.
Where do you envision Keen in three years?
Next year we’re projecting our Utility business to be up 30 percent. We’ve seen that business double since I’ve been here and we’re expecting to challenge Timberland Pro for the top spot in our three-year plan. In most of our accounts, if we are not No. 1, we’re No. 2. We’ve come from nowhere to become something very large in that business.
What exactly has enabled Keen to rise the ranks in that market?
When I was at Timberland Pro, it was at a similar size and stage of development that Keen Utility was when I joined the company in 2015. It just had so much opportunity to take it to the next level and it felt like I was running an old playbook. Before that, Keen had done a great job in finding a unique angle—the idea of a hiking boot design and fit with safety features. Soon after, Keen introduced the first-ever asymmetrical steel toe design. That was a big win, and word of mouth spread. More recently, we’ve focused on the indoor/warehouse environment, and we’ve introduced some great athletic styles. Mixed in with that is our American built collection, made in our factory in Portland. Not many people are opening factories in the U.S., so while it’s definitely an investment, the story resonates strongly with consumers and has really paid off. We make great product there. Overall, Keen Utility line has resonated. You have to win workers over one at a time. They treat boots like tools, and they’re not usually looking to switch. If they do, they’re taking a risk. If it pays off, great, they found a better tool. But you better make a better tool. That’s why we’re committed to always trying to improve our products, like our recently introduced Bellows Flex technology across the toe box that compresses almost like an accordion. We studied a ton of people on job sites crouching where the leather would fail to give. Our design can handle that repetitive motion and the boots will last longer.
And the prospects for Keen’s outdoor and kids’ businesses?
If we can hit double-digit growth, we’d be pretty psyched. We should because, let’s face it, retail basically shut down for three months this spring. Still, we’re being relatively conservative. We’re going to enter a couple of other categories in a bigger way. Kids’ is next. We also have some light trail running product coming in. We’ve got some cool things that are incremental and are banking on that.
What do you love most about your job?
I go back to my early Proctor & Gamble days when I listened to a presentation by (then CEO) John Pepper, Jr., who bestowed some business wisdom. 1. Segment your user base—who are you trying to go after. 2. Figure out what’s in their way of becoming a loyal fan. 3. Tear down those barriers and let marketing do everything it can do. Product, price, promotion. Repeat. I’ve always been more of a marketing guy, and that was simple, great advice. I see that same potential at Keen. We have such an opportunity to do the basics better. For example, we make great kids’ sandals—the choice for camp. If we do a great job elsewhere, then every mom in the world will know about us. Same goes for our hiking and casual collections. How do we make sure Keen is a brand that consumers are thinking of and the choice they’ll make. We have such a great brand story; there’s a lot to fall in love with in this brand. If we focus on building loyal consumers and work that story into the equation, then we’ll really be on our way. •