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PENETRATION: Ross Fitzgerald says Steel Blue has worked hard to overcome the challenge posed by cheaper competitor brands. Photo: David Jo Bradley

Steel Blue not afraid to show its soft side

STARTED in 1995, Malaga-based Steel Blue targeted a niche gap in the local market to develop high-quality, comfortable safety boots.

At the time, according to global sales manager Ross Fitzgerald, most trade workers were wearing "cheap" $40 safety boots for up to six days a week and then wearing more comfortable and expensive shoes after hours.

"Most people couldn't wait to get home to take off their uncomfortable safety boots, so we designed a unique highly shock-absorbent sole that reduced the stress to the feet, joints and lower back as well as using soft linings that didn't chaff or cause blisters," Mr Fitzgerald told WA Business News.

"There was nothing like this on the market anywhere in the world when we started; no-one had looked beyond safety at developing something that was also comfortable and healthy to wear."

However, the company, which now employs 60 staff, found that a lack of brand awareness and the higher costs associated with making the footwear comfortable made it difficult to compete.

When Steel Blue released its first range of boots it was more than 50 per cent more expensive than any other brand sold in Australia.

"Here we were with an unknown, untried and more expensive brand coming out after a mild recession," Mr Fitzgerald said.

"Our policy was to not sell direct to end users but instead sell via local industrial distributors around the country.

"Most of our competitors were reducing costs and quality in reaction to the looming possibility of cheap imports and the lowering of import duties.

"Some of our competitors sold direct to the major end users such as mining, manufacturing, government departments and transport.

"This caused a huge selling difference between Steel Blue and our competitors."

Mr Fitzgerald said the first few years were extremely tough for Steel Blue and most of the company's capital had been absorbed in infrastructure, such as setting up a factory and warehouse, as well as marketing.

"Our first problem was convincing the distributors to buy some stock, display it and sell it to their customers," he said.

"Many distributors laughed at us and told us to come back when the brand was established and they'd have another look at it then.

"This was extremely frustrating as it was taking a long time to establish the brand and we needed distribution to do it properly."

The company suffered through slower sales and virtually no profit for the first three years.

In 1996, Steel Blue developed a mid-priced brand called 'Howler' to bring in some extra cash and grow market share.

With the business still struggling, in 1997 the company offered a 30-day money back comfort guarantee, which effectively reduced the risk of buying a pair of expensive Steel Blue boots.

"We also began to employ some territory managers around the country that had more local knowledge of where the action was and could build strong partnership relations with our growing network of distributors," Mr Fitzgerald said.

"At the same time we developed other small incentives, giving loyal distributors movie tickets for increasing sales, for example."

In 2000 Steel Blue developed an economy brand called 'Krushers' to penetrate the cheaper Asian market and has since licensed the two brands out to a company in Indonesia, which markets them throughout Asia.

In 2004, a pair of Steel Blue 'Argyle' boots was independently comfort tested and recorded a 'highly comfortable' rating and over all comfort Index of 75.

At the time, the average comfort index score from other brands was 42.

That year, the company won the Telstra small business of the year award, and in 2006 it was named Ernst & Young western region retailer, consumer and industrial products entrepreneur of the year.

"The company is now in a very strong position and Steel Blue is regarded as the leading industrial footwear brand in Australia," Mr Fitzgerald said.

"Markets are opening up overseas in Europe, the UK, the Middle East and US, and we have well established markets in New Zealand and Papua New Guinea.

"Our 'Howler' brand is the second largest selling brand in Asia."

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