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STRATEGY

Solemates

Here's how Mandy Cabot, cofounder of footwear distributor Dansko, has controlled her company's growth while tiptoeing between hungry retailers and a balky supplier.
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You could call these shoes a runaway product. Not literally, of course, as Dansko (#240) cofounder Mandy Cabot points out, because clogs--wide-toed shoes with supportive arches favored by surgeons, chefs, and gardeners--are built for standing. Still, over the past five years, they've carried Dansko's annual sales from $1.3 million to $16 million, forcing the footwear distributor to tiptoe between hungry retailers and a balky supplier.

"Having shoes that everybody wants and nobody can get is an easier problem to solve than having shoes nobody wants but everybody can get," notes Cabot, 45, who founded the company with her husband, Peter Kjellerup. "Happening on a shoe like a Dansko--you consider yourself lucky if you've done that once in your life."

Especially, she might add, considering her unglamorous history with the shoe. It was on a trip to her husband's native Denmark in the mid 1980s that Cabot first splurged on a pair of the closed-back clogs. "They were terrific for mucking out stalls," recalls Cabot, who then ran a horsetraining facility with her husband.

Sanita, the Danish manufacturer, had been supplying sturdy wooden clogs to European butchers, bakers, chicken farmers, and slaughterhouse workers for nearly a century. In 1984 owner Knud Jeppesen developed the flexible polyurethane-and-PVC sole, for which he received a nonrenewable 20-year patent. Sanita signed an exclusive contract with Dansko for American distribution rights in 1990, just in time for a spike in the U.S. comfort-shoe market.

"Clogs are like Birkenstocks. All of sudden the right people wore them and--boom!" says Danny Wasserman, president of Tip Top Shoes, in New York City, one of Dansko's 2,500 retailers.

At some point, Cabot mentioned to a "Fortune 500 dude"--namely, her father, Louis Wellington Cabot, former CEO of Cabot Corp., the giant specialty-chemicals maker--that she'd been selling lots of clogs at horse shows. Louis Cabot, one of the Boston Cabots, a Mayflower family that made its fortune in shipping, offered to hook Mandy up with a friend who was CEO of a giant shoe company. That Friday, he set up a Monday-morning meeting.

In a one-day tutorial, Mandy Cabot learned which trade shows to attend, what kind of reps to hire, and what market to focus on. By 1997 Cabot had sold her farm, barn, and animals, rolling the profits into a warehouse and office building in West Grove, Pa. She was plowing ahead--as her supplier began slowing down.

"It didn't take us long to max out his production capacity," Cabot explains. "We put a moratorium on new accounts and struggled with that for a few years while he geared up another factory." Sanita struggled to handle the variety of new designs that Cabot demanded.

"We try to prevent running into trouble by not letting one customer be too big or powerful," says Jeppesen. "Growth has to be controlled." Of the 80,000 to 90,000 shoes that Sanita makes monthly, Dansko buys as many as 60%, even though Jeppesen wants to limit each customer to no more than 50%.

To appease retailers, Cabot is broadening her product base. Dansko recently introduced the Solvei line, a more fashionable comfort shoe manufactured in Portugal. Stepping into the fashion-shoe world will be a challenge, Cabot admits. "You really have to stay fresh and current," she says, "or you can miss the boat."

Phaedra Hise is a freelance writer based in Richmond, Va.

Last updated: Oct 15, 1999




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