Regarding the price of a pair of wool shoes...

Price war on felted wool shoes!

On how the price of a pair of wool shoes has fallen by 30% in 20 years!

It's now over 20 years since I established Glerups AS with my parents.
Before that, in the years my mother spent developing Glerups wool shoes, I helped her sell them to shoe retailers. It was not an easy task. Slippers were not a big item among the leading shoe retailers of the time. They knew nothing about felted wool shoes and thought they were strange, and as usual, they thought they were far too expensive.

We knew nothing about the shoe industry and had only just learned that the shoe retailer had to multiply our price by 2.5 to cover his costs for inventory, marketing, staff, and especially rent. Therefore, our hand-felted wool shoes from Himmerland came to cost 500 DKK.

They found this completely unreasonable and impossible to sell, because, as they said; "A slipper must not cost more than 200 DKK."

Back then, a slipper was something old people wore. It was a checkered slipper with a woven upper of wool/polyester and a sole of some cheap synthetic material. But all our good arguments about the quality and comfort of our wool boots were a beautiful waste of effort. They were too expensive! Period! Until I started telling the shoe retailers that it was much better to earn 2.5 times the money on a shoe that cost 200 kroner to buy than to earn 2.5 times on a shoe that cost 80 kroner. The difference is exactly 200 DKK - 80 DKK = 120 DKK per sale. (You can do the math yourself, but remember to subtract the VAT from the shoe retailer's contribution margin.)

We slowly entered the shoe stores, and after a few years, about half of the stores in Denmark's largest shoe chain were customers of Glerups A/S. In all the other Danish market towns where they were not customers, Glerups' new salesperson and current co-owner Allan made sure that the competitor became a customer. Slippers might still be only for old people, but felted wool shoes were for everyone who slowly discovered how comfortable they were to wear and how long they lasted for the 500 kroner that became the price.

I can no longer remember how we calculated that we could sell a Danish-produced felt shoe in 100% pure wool with a leather sole for 200 kroner, but the calculation certainly did not hold, because even though our sales increased sharply, we still had a resounding deficit in the third year. We could already see which way the wind was blowing the year before, and therefore moved production to Romania, where it has been ever since. We simply had to cut labor costs. We had industrialized what we could in production, and we now produced 20 pairs a day per employee compared to the 2 pairs my mother could felt by hand when she started.

More money had to be invested in the project, and in that process, my parents and I separated. It was a rather difficult experience, filled with many unpleasant feelings that I don't look back on with great joy. But we got through it, and we also started talking again after a few years, while we were now actually competitors.

I started my own company, with a production of hand-felted shoes in Nepal. Through a Danida project, we at Glerups had come into contact with Nepalese people who also felted by hand, and it was through these contacts that, with a good bank loan and a contract with ECCO, I was able to establish my own workshop in Kathmandu. Here, the labor wages were even lower than in Romania, and even though I paid a relatively good salary to my people, I could now produce at the same price as we could with our industrialized production in Glerups.

With a nice and steadily increasing sales, it was now possible to make a small profit from producing wool shoes for retail. The more shoes, the greater the profit, and there was no doubt that Glerups had a head start. Sales were good, (As they are when you have a good product at the right price.), and eventually, it was possible to invest in even more efficiencies that could lower the production price, while wages, along with all our other living costs, rose over the next 20 years. Things went quite well for Glerups, while I struggled to get sufficient sales to boost production in Nepal.

In the meantime, the price of a pair of wool shoes has not increased much. Five years ago, my wool shoes from Betterfelt cost 600 DKK, while Glerups cost 700 DKK. At the same time, we gained a lot of new competitors, almost all of whom had seen how I could produce high quality at a low price in Nepal. I refused to sell to them without getting a small extra contribution margin for my Danish company, which resulted in them recruiting several of my former employees and buying from them instead.

For example, my former partner who once bought half of Betterfelt, with the aim of strengthening sales. I certainly thought it was Betterfelt's sales that needed strengthening, but it was my partner's own brand that was strengthened, and when I declared Betterfelt bankrupt for the first time, Green Comfort moved production to a former employee in Kathmandu.

 

I restructured Betterfelt and mortgaged my house once again. My parents also helped, and now I focused entirely on my own brand, which was primarily to be sold through the webshop. Unfortunately, like so many others, I was stopped by a small virus in 2020, where I had to declare Betterfelt bankrupt for the second time. This time as a personal bankruptcy. I never managed to sell more shoes than I produced in Nepal. I was forced to buy the minimum production in Nepal that could keep production running. Even during the half of the year when we had no season. Therefore, I eventually ran out of money, even though my sales actually increased steadily year after year. That it coincidentally happened in the same year as Corona was probably a bitter coincidence, which only helped all my new competitors further.

Back to the price of a pair of wool shoes.

Even more competitors have emerged, and the price of a pair of wool shoes has not just stood still for over 20 years. The price has now fallen!

The retailer has simply been cut out of the calculation, so the price is now determined by selling only online directly from the importer's own warehouse.

They took a plane to Kathmandu, showed a pair of wool shoes, and asked to buy some copies.

They have received them at normal production price or perhaps even slightly below the price I can produce for in Kathmandu, because they have not contributed to the development costs of lasts, tools, etc. Nor have they taken into account that wool shoes are a seasonal item, only produced for half the year if one follows the retailer's purchasing patterns. The producers and their workers must figure out for themselves what they will live on for the other half of the year.

Then they put them up for sale at a lower price than the products already on the market. In this regard, I will not hesitate to mention that the quality of these new products rarely lives up to the quality that Glerups, Betterfelt, and now Wool2fit deliver.

The result is that after 20 years of hard work keeping all the wheels turning, I now have to choose whether to continue the fight or leave the battlefield.

I know that this can be read as one long lament. Complaining changes nothing. I won't get more or less for my shoes by complaining. My story is not unique, but rather a classic one that has played out for thousands of companies that have outsourced or moved their production to the East. I would like you to read this story as a positive suggestion for how we can get out of our predicament in a Europe that is weakened in the global market, and a problem that will exist as long as we do not have uniform labor costs worldwide.

In my opinion, the new players in the market have not given us better products. Nor have more people received better wages and living conditions by producing and selling wool shoes; rather the opposite.

However, Danish consumers have gotten some cheaper wool shoes, and I can at least be happy about that, because it means that more people now know why one wears wool shoes.

I believe that creative hard work and integrity pay off in the long run, and therefore I will stay and continue the fight. I will simply lower the price and match my new competitors, so that consumers now also get the best quality at the best price.

Therefore, you can now buy Wool2fit SlipOns and Espadrilles for 350 kroner per pair, and our classic wool boots are now only 400 kroner.

You can choose which of our three newly developed lasts with more room for the forefoot best suits your foot. You can choose between wide, medium wide, and narrow.

You can also choose between 5 colors, and they all come in 15 standard EU sizes from 35 to 49.

I am confident that consumers will quickly find out where they can get the best quality at the best price. Then we will see who can offer consumers even better wool shoes. Wool shoes that are not just for wearing as slippers, or on a trip to the beach.

I'm talking about new elegant designs for sneakers, sandals, everyday shoes, summer shoes, winter shoes and winter boots with a whole new level of comfort. We are well underway with the development, and this time there are more allies behind us. There will be a fight to the finish, so look forward to it.

And yes! "Monkey See Monkey Doo", but this time we must ensure that "Monkey do not see", and who knows? Maybe it's time to bring production back home...