The Falke factory in Cape Town and its CEO Martin Grobbelaar defy all stereotypes of a typical garment factory and factory boss. They have turned all pre-conceptions upside down.
For example: during the past decade when the South African garment manufacturing industry has been shedding jobs like a cat sheds hairs, Falke increased its workforce by 20%. And the remedy was simple: they grew the demand for their technical socks so much that they had to appoint more workers to increase production.
Now 99.9% of the products they manufacture under the global brand name are developed and designed by the local in-house team … and some of their innovations have been adopted by the head-office in Germany.
Instead of importing, like so many other clothing brands, nearly half of the 7.5-m pairs they produce locally are exported — mainly to the US, but also to New Zealand and recently, since February this year, to Australia. Annual exports to the US now number 3.5-m pairs.
Exporting down under
“Exciting things are happening in Australia, where the reaction to our products and the brand has been great,” says Grobbelaar. While establishing a new brand in a new market is usually a difficult and a slow process, taking 18-24 months, they are very encouraged by the brand’s market acceptance after a mere nine months. “Over the past year-and-a half there has been tremendous growth in the New Zealand market as well.”
“If you look at their active lifestyle, there are many similarities between South Africa and Australia,” he says. As in South Africa, many Australians run and cycle early in the morning and even during lunch times.
Falke SA, however, will not export to Europe and the Far East. Not only because the climate and active lifestyles in these countries create a demand for a completely different product, but also because that is the domain of their principal in Germany.
While the European socks are mainly manufactured to protect against the elements, South African, American and Australian athletes want socks that help them enjoy the elements, explains Grobbelaar.
The customer base also differs. The high-end top-quality ESS running sock developed in Germany, for example, has limited appeal in the South African market, because most local runners cannot afford it. “Instead, we created something to suit our market and fit our realities because we want to provide a solution for every runner,” he says.
Although the local in-house design team develop their own technologies and ranges, they work closely with their German counterparts. “They have a big pool of very skilled people there and we have complete access to all their technical skills,” says Grobbelaar.
A big advantage is that the head-office provides a sounding board for the South Africans who can consult them when they encounter problems. “Our relationship is very good,” says Grobbelaar. “We feed off them — and they feed off us.”
The South Africans could, for example, share the technologies and expertise they developed for manufacturing technical performance running and cycling socks, while learning from Germany about the fibres and technologies required for socks for sports like skiing or hiking.
The Falke factory environment is as far removed from a sweat shop in practice and philosophy as Donald Trump is from Barack Obama. The easy-going way in which staff interact with the CEO lends credibility to his statement that everybody — from the sweeper of the floor in the factory to the top manager — is equally important for the functioning of the company. Or family, as Grobbelaar says.
Their underlying philosophy is that a brand is built on two things: product and people. “The people are the heart and soul of a brand and it is important to look after and develop them,” he says. “Most assets decrease over time, but if you look after and develop people, their value increase over time.”
Caring for workforce
Apart from the 461 people they have on site, Falke also accepts responsibility for their dependents. They estimate that about 2 500 individuals depend on the business for a livelihood. They therefore look after the well-being of the workforce by offering in-house training, which equips those who qualify with a certificate that is accredited by the Department of Higher Education. They also offer their staff computer literacy and lifeskills training — e.g. on financial management. They believe that this uplifting education is transferred to their children, parents and others, ultimately contributing to uplifting the whole community.
When it was announced that Cape Town’s water crisis could result in the dreaded Day Zero when people would have to queue for hours for a few buckets of water, they installed a reverse osmosis plant to compliment the borehole they had sunk at the start of the water crisis. This was not only to benefit the factory, but also to supply water to the staff. The result is that they can now operate without using any municipal water supplied by a city that will always be water-vulnerable.
But, all of this would have been window-dressing had they not been able to provide sustainable employment. In the past four years, since Grobbelaar became CEO, they not only grew the Falke brand name recognition, but also increased production by 7%.
Previously, the factory relied heavily on demand from other companies to manufacture their house-brands, but that was gradually reduced until they now mainly manufacture under the Falke brand.
“Every sock is designed and developed to provide a specific solution and to help an athlete perform better in any sport he or she chooses.”
After all, people spend a fortune on the right performance shoes, especially for running, which can all be in vain if they are worn with inferior socks that cause blisters.
Quality essential to grow brand
Quality is essential to grow a brand, says Grobbelaar. In socks, quality is measured in comfort, fit and functionality — all built on the cornerstone of the material (fibre) used. There is truth in the old saying if you put rubbish in, you’ll get rubbish out, he believes.
The quality of a performance sock to a large extent depends on the fibres used. While they are proud that their socks are all designed and made in South Africa by South Africans, they are not able to source the required technical performance fibres locally.
“We have a longstanding relationship with our US fibre supplier and we have been working closely with them on the fibres we require.” They view this supplier as a partner — the kind of relationship they value having with all customers and suppliers.
To ensure the best functionality from a sock it is important to ensure that the fibres wick moisture away from the skin, because moisture causes friction, which results in blisters. You therefore have to stay away from cotton, warns Grobbelaar, as it absorbs moisture. He cites the example of dipping a cotton towel in water and feeling how heavy it becomes when wet. Socks made from more than 50% nylon are not ideal either, because nylon also absorbs 5% of its weight in moisture.
Falke’s trademark fibre, Drynamix, is a modified polyester, specifically engineered to wick moisture away. It only absorbs up to 0.4% of own weight in moisture. This fibre is designed to wick away moisture from the skin, into the sock, through to the shoe.
Equally important is a smooth, snug, fit that eliminates blister-causing friction. They therefore make socks to fit different foot shapes and also to deliver the best performance for a specific activity.
Running socks are by far the biggest seller for them across all markets, and they believe this market has grown a lot across all demographics because financially it is the easiest sport to participate in. There has especially been a huge growth in trail running with whole families participating, says Grobbelaar
But, they also make a fair number of pairs with features specifically developed for cycling, hiking, gym, athleisure, etc. Many of the designs and colours are so attractive that they are often bought purely as fashion wear.
Consumers are becoming much more knowledgeable as smartphones give them constant access to product information. “We want to make it as easy as possible for consumers to make the right choice,” says Grobbelaar.
They therefore employ a permanent tech rep who travels across the country to train sales staff on how to recommend the best solution for a customer. This includes training on which socks are suitable for a certain activity, and why, and also how to recommend the correct fit for a specific foot. They are planning on appointing more of these educators.
“We are very passionate about what we do, We want to spread the message.”