The world is changing fast and to keep up you need local knowledge with global context.
There was no time in my recollection when my modest shoe collection did not include a pair of “vellies” – the iconic South African product that goes back to the days when people used animal hide to make their footwear. But it was only in January that I became acquainted with a supercharged version that is now being marketed globally by a company called well, Veldskoen. The stylish version of the old classic came to my rescue, via ace photographer Greg Beadle, during the World Economic Forum in Davos. On Rational Radio this week I got to chat to one of the co-founders of this young business which is now 49% owned by Brian Joffe’s JSE-listed investment company Long4Life. – Alec Hogg
Joining us now is Nick Dreyer who’s one of the co-founders of a company that’s shaking up the international world, our hope going to be the South African version of Ugg. I have a sister in law in Australia Nick and she was proudly showing us her Uggs to say that she’s now a dinkum Australian after being there for 20 years. I wonder if people in South Africa show their veldskoens and say they’re a dinkum South African too.
Alec that’s kind of the plan. Thank you for having me on the show. The idea is to create a universal clothing item that signifies being from South Africa or having been to South Africa, and to celebrate all the wonderful stories things and places that we’re all about. So hopefully that’s a qualifier in the future.
You came to my rescue in January this year through Greg Beadle, who’s one of the great photographers of of the world – well the WEF thinks so anyway. I had a pair of snow shoes which I had been using in Davos for more than 10 years. They fell apart and Greg had an extra pair of veldskoens. I wear them often, they’re very comfortable. Where did the whole idea first come to you? You guys only put this together in 2017.
Yeah absolutely. It came to us quite quickly and organically. It was a mate of mine Ross Zondagh, one of the co-founders. We were having a conversation and were actually talking around the fact that the South African Olympic team had not looked very good and that they didn’t have anything that was iconic South African to wear. They would walk out with that whole Chinese tracksuit vibe going on and we thought if they were to wear something, what would they wear? We came up with the idea that we could make Veldskoens look really fun and then we hit our straps quickly and got up and running. You mentioned Greg Beadle. one of the great secrets about our growth has been to have really passionate influencers that aren’t necessarily headline influencers, but what we refer to as micro-influencers. Guys who are really smart and well connected and totally passionate about the shoes.
You also have someone in our tribe who has gone a little bit beyond that in Brian Joffe – well known as one of the great entrepreneurs in South Africa, who bought into your company last year, bought 49%. That’s unusual for Joffe. You’ve only been going for a year and then he comes in and buys 49% through Long4Life. Now we know what your turnover is – R9.2m a year. We know are you losing R3m at the moment. So actually having that public exposure is a bit of a double edged sword.
It is a double edged sword. Having a listed partner as a shareholder comes with its own unique challenges. Of course Brian being an incredibly astute investor and an incredibly smart entrepreneur, brings with its challenges. However, these are great challenges to have. For a startup like ours, the reporting, the guidance that you get in terms of prudent planning and the way to manage your capital, and the way to get onto a responsible growth curve, is absolutely immense and totally invaluable to a bunch of startups. So it’s been a fantastic relationship. Why he did it? I think he recognised that there was an opportunity to grow and scale the business. As we know, he’s got a pretty decent track record of spotting those sort of things. So the opportunity came, yes slightly out of their mandate, but so far so good. The business is growing. As you’ve seen the results. The nice thing is that the growth trajectory is steep and the opportunities to start trading outside of our borders is incredibly attractive.
Just for other entrepreneurs, when you get a big partner like that, do they lend you money and put it in as a loan account so that they can take it out first, or do they put equity in? How does something like that work?
It really is horses for courses and entrepreneurs have different routes to funding. The one thing I will tell you that funding is very, very difficult in South Africa. You know it’s difficult to get funding as a startup. Banks are limited in what sort of funding they can provide. So you have this choice between debt financing and, or equity. The most important part for us in our decision making, was to find the right partner. We saw Long4Life as a very strong partner. We knew that they were investing in two lifestyle products and at some point whether it was Veldskoen shoes or our Plakkie shoes, there would be an opportunity to leverage that relationship responsibly and potentially get into places where we would have struggled before. So the immediate result of our relationship with Long4Life was access to a retail environment and outdoor warehouse which is fantastic for a small startup like ours in the shoe business because you have to learn your straps in retail. And as we know it’s not easy, so to have a friendly entity that guides you and holds your hand is really of great value to us.
It’s a fantastic good hope story for entrepreneurs in South Africa. Just to close off with, in the annual report of Long4Life, it says that they were disappointed by the results but encouraged by your positive trajectory and it is illustrated, or emphasised later on in the commentary around your company by saying that you really are getting good traction now in the foreign markets. Big stuff happening in Asia and Jamaica.
Yes. We’re constantly looking for places where we can go and start in the same vein as we did in South Africa, which is to attack e-commerce and then once you sort of settled, move into an omni channel distribution space. So Jamaica is of particular interest. The Clarks desert boots, is the single most popular shoe in Jamaica. This is interesting because Clarks have never had a store in Jamaica. If you follow the history of the Clarks desert boots, it was initially inspired by the South African Veldskoen. It’s tongue in cheek saying that they’ve been wearing the wrong one. But the international game is where we really want to play, we’re doing really nicely in America, we’ve set up some interesting relationships there, but it’s early days in our business. The note about the results so far, those results are early as you know they came out almost eight months after trading for the first time with that investment. But so far so good. We’re growing nicely and we’re managing to unlock multiple distribution channels and territories which is good for us.
Nick. when I wrote about you in one of my newsletters, I got a very angry man writing back to say it’s not Veldskoen. It’s Velskoen. Do you get that kind of pedantic customer?
Of course we do. Velskoen is a national treasure. It belongs to the psyche of South Africa and Africa. So you’re invariably going to get folks that are very passionate about it. On that particular point, neither is right and neither is wrong and neither is more right or wrong than the other. We chose to call it Veldskoen because it relates to field shoe in English and we love the idea that soft skin is a fantastic shoe to travel and to migrate, and to go from one place to the next and also to find yourself in different parts of the world and I think you know when your story came out about Davos that is exactly the sort of thing we want to hear about, Veldskoens can sort of save the day on the other side of the world.
Well maybe next you’re going to give the whole South African delegation to Davos next year. Your fellow South Africans and then they won’t slip and slide and break bones. Well I think you mentioned that they were pretty good on the snow so we’re in. They are brilliant and it’s also a brilliant story, thanks to Nick Dreyer from Veldskoens.
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