Editor's note: This tour of small businesses across the country highlights the imagination, diversity, and resilience of American enterprise.
The lives of Bahman Irvani and his daughter, Sara Irvani, have followed the same trajectory. Both were born to successful entrepreneurs and worked, as children, in their parents' shoe companies. Both attended boarding school in England and studied finance at Cambridge. Both intended to take over their family businesses.
But Bahman never succeeded his father. The 1979 Iranian Revolution swept away the family's footwear company--a multinational enterprise with 60 factories--15 months after he joined full time. Sara's succession looks more propitious. Last year, she became CEO of Okabashi, a plastic sandal and flip-flop manufacturer founded by Bahman in 1984. In March, she unveiled a fresh direction for the business with a new line of eco-friendly shoes under the name Third Oak.
Okabashi--a Japanese word that, according to Sara, has no specific meaning but is associated with wellness--resides in Buford, Georgia, 40 miles northeast of Atlanta. Once known as the "Leather City," Buford has a footwear legacy: A large shoe factory operated there until 1941 and reopened to serve the military during World War II. Okabashi occupies a 100,000-square-foot facility ringed by trees in a manufacturing park. It is the same building in which Bahman--optimistically, given the circumstances--launched the business during an outsourcing wave.
Starting with so much capacity "is like buying a suit that is two sizes two large," Bahman says philosophically. "Over time, you grow into it."
Today, the plant teems with activity, as 200 employees produce roughly 1.2 million pairs of flip-flops and sandals a year. The products comprise three brands: the flagship Okabashi line, sold at drug stores and some specialty shops (retail price: $20); Oka-B, a higher-end line for boutiques and spas (between $30 and $60); and Third Oak ($30 to $40), which are currently available online and destined for department stores.
Okabashi is a wellness brand. The typical buyer is over 40 and concerned about comfort and foot health. So, to attract Millennial customers, Sara created Third Oak, spotlighting a long-hidden virtue: Okabashi has been green virtually since the get-go. The company's eco-friendliness "is not something we talk about with Okabashi and Oka-B," Sara says. Third Oak "is my way of saying let's share what we are doing."
Rob Whalen, head of purchasing and wholesale at the Made in America Store, first encountered Okabashi 28 years ago while running a Woolworth's. He has stocked them in the seven-store chain since its launch in 2010, and the sandals are consistently among Made in America's top-five sellers. "We have tour buses come to our store. We take them on the buses and show the different styles and people love them," Whalen says. "At Woolworth, it was the older generation buying them, but now we do very well with younger people, too."
A revolution and a rebirth
In Iran, the Irvanis were footwear royalty. Mohamad Irvani founded the Melli Shoe Company in 1958 and grew it into one of the largest shoe manufacturers in the Middle East, employing 10,000 people and churning out everything from work boots to sneakers to kids' shoes. His son, Bahman, helped out there until age 13, when he moved to England for boarding school. After studying economics at Cambridge and working in London as a CPA, Bahman returned to Iran to join the family business full time. It was 1977.
In February 1979, the monarchy fell and the new theocratic government nationalized Melli. The Irvanis fled to England. "We lost 99 percent of what we had," Bahman says. "We cried for about a year and then decided either we spend the rest of our lives looking back or looking forward. We decided let's move forward."
Attracted by the Reagan era's pro-business climate, the Irvanis chose to start again in the United States. They targeted the Atlanta region for its international airport. With bank loans and the last of the family's capital, Bahman acquired land in Buford and set up a factory, borrowing technology and processes from German, Italian, and Japanese companies that had once partnered with Melli. "This was exactly when the dollar was getting stronger and the shoe business was moving to China," he says. "Our timing was terrible."
Their idea, however, was good. In the U.S. at the time, plastic sandals were cheap and cheaply made, with small regard for comfort or aesthetics. Bahman would make plastic versions of Japanese leather sandals, incorporating reflexology beads in the footbeds to massage and stimulate the feet. At $8 retail, Okabashi shoes cost four times as much as their competitors. "But it was a proper shoe that gave you the right balance, the right posture, and had therapeutic features," says Bahman.
Even at $8, plastic sandals didn't provide the big shoe chains with sufficient margins, so Bahman switched his focus to drug stores and supermarkets. Walgreens and CVS picked up the brand in the early '90s, significantly goosing sales. In 2006, the company launched the higher-end Oka-B line. "Those are our company's two big milestones," Bahman says. "The third one is passing the baton to my daughter."
Green and greener
Sara Irvani is fluent in English, German, French, and Farsi. The influence of her Iranian parents and years spent studying and working in Europe announces itself in her elegantly accented speech. "I really wish I had a southern accent," she says. "It would be so much nicer when I'm talking about Buford if I sound like I come from here."
Sara's official residence is in New York City, where she spends weekends with her husband, who works in finance. Every Monday, she wakes up at 4:30 a.m. and flies to Atlanta, usually returning late on Thursday. "I think it is really important to be where the action is," she says.
That action has been intense, as Sara pursues an ambitious plan to grow sales across the company by 25 percent a year. Toward that end, she has implemented a drop-ship program to minimize retail customers' inventory risk; increased private-label work; and expanded international sales. She is also revitalizing Okabashi's marketing collateral, email strategy, and website.
Third Oak is the company's next-level gambit. The slender, minimalist shoes with metallic-hued straps were designed by a classically trained sculptor. Sara expects customers will be roughly half the age of Okabashi fans, and have a strong preference for eco-friendly products. "Your typical flip-flop is like the straw of the footwear world--used for only one season and bound for the oceans and landfills," she says. "Our shoes are designed to solve that."
Sara is continuing the green practices established by her father, including commitment to 100 percent recyclability. All three brands invite customers to send in their old sandals in return for a 15 percent discount on their next purchases; together, they will recycle 100,000 pounds of shoes this year. The company also grinds up waste to redeploy in new products. Up to 25 percent of the sandals' content is recycled.
But Third Oak has gone further, increasing the percentage of plant-based material by collaborating with suppliers on a soy plasticizer--the additive that makes sandals flexible. And it is moving toward shipping products in reusable cotton bags. "We are continuously exploring new materials that would make our entire production more eco-friendly," Sara says. Green improvements to Third Oak will be rolled out across the Okabashi and Oka-B lines.
Sara is also committed to a low-carbon supply chain: Virtually all of the company's vendors are in Georgia or just over state lines. That resonates with the lines' made-in-America message.
Emphasizing the green angle improves the trajectory for all three brands, Bahman believes. "We owe a big debt to the Millennials, who are ready to act a lot more on their consciences than my generation," he says.
Sara acknowledges a different debt. "I did not come up with these answers. That was my father and grandfather," she says. "They did the heavy lifting, and I am so grateful."