Akubra stays in Kempsey to keep the ‘Made in Australia’ tag

Originally Published in The Australian

City folk wouldn’t dream of doing it to the soft-weight Akubra fedora, but the first thing most Australian men and women on the land do when they receive their new hat from the firm — most likely the “Cattleman”, “Stockman”, “Snowy River” or “Riverina” style — is to take it out of the box and stamp on it with their boots.
Rain permitting, they might fling the hat in the nearest puddle. This rural ritual isn’t a sign of disrespect, but the opposite. A quintessential symbol of Australian working life, the Akubra has to be worn in from the get-go. Like country folk themselves, it can be battered and punished, but will keep its shape and give years of faithful service.

Alternatively, the upwardly mobile type of Akubra-wearer may keep the new fur-felt hat in pristine condition to wear at country races, formal events or when they go to the big smoke. Their old Sunday best hat now becomes the work hat. The new Akubra will sit in the cupboard — always crown down so the brim doesn’t lose shape — next to their polished R.M. Williams Craftsman boots, starched moleskins, plaited leather belt and striped shirt.

The people at fourth-generation family-owned Akubra, headquartered in Kempsey, northern NSW, don’t mind that their hats take a regular beating. “We must be one of the few products in the world where we allow for that,” says company secretary Roy Wilkinson. “The secret ingredient is that we make a quality fur-felt hat. This is what has kept us alive when every other hat manufacturer in the country dating back to the [19th century] no longer exists. Because we always knew what we were doing; we know how to make a quality hat.”

The business itself has seen heavy weather and taken more than one battering as Australia’s culture and economy have changed around it, and only a significant personal sacrifice by those at the top has kept the name alive. But recent export growth and a contract signed with the Australian Defence Force mean things are looking up for one of the nation’s iconic brands.

Overseas sales of Akubra hats now account for 15 per cent of annual company turnover (estimated at $12 million-$16m a year), with China taking 5 per cent of all stock. China has leapfrogged the US to become Akubra’s biggest export market, thanks partly to inbound tourism, and partly to a distribution deal on the Chinese mainland that came about through a satisfied Tibetan customer. Akubra plans to employ a new international business development expert in 2015 to take advantage of further opportunities in China, India and the US. American sales in particular, the company says, are still at the “tip of the iceberg” of what they may achieve.

Akubra_News Corp AustApprentice hat makers, mainly drawn from young Australians with a background in trade, are again trickling back in to the Kempsey factory. The Akubra hat offering has also expanded, with straw and more hipster-friendly “fashion” hats, such as the trilby and fedora, making up more than 100 styles in total. (Akubra has an accessories line that includes bags and belts, but it is licensed to a third party.)

While most companies chase the yuan, the Tibetan connection fell in Akubra’s lap. “I got an email in 2003 from a guy who’d bought 20 hats from Strand Hatters on George Street in Sydney,” recounts Wilkinson. “He had taken the hats back home and sold them to his friends. He sent an email and asked whether he could sell our hats in Tibet. We replied and said, ‘We don’t have any distributors in Tibet, we never really thought of it as an export market, but if you’re happy to pay for the hats up front we’re happy to sell them to you.” The man, whom Wilkinson has still never met but who pays cash up front, started with small deliveries of 20 hats at a time, which increased to 100 hats, then thousands. He took Akubra to Tibet and parts of China, and soon the company started getting inquiries from all over the mainland.

The agreement in 2012 to supply 75 per cent of total slouch hats to the ADF has also provided a timely boon for Akubra. Following decades of minimal ADF contracts (some years Akubra didn’t make a single hat for our armed forces), the current deal accounts for up to 15,000-20,000 hats a year, around 10 per cent of the company’s total annual manufacturing volume. The figures might just be a drop in the ocean compared to the two million hats Akubra has made for Australian service men and women since World War I, but Roy Wilkinson says the renewed association with ADF is totemic for the company. “It is so highly regarded here, because of our historic association with such an iconic part of the army uniform,” he says. “During the war periods [making slouch hats] represented a very significant part of our production — upwards of 80 per cent of what we made. We hope to always make the slouch hat for our defence personnel. It’s vital for us. We believe it is part of our identity.” Certainly Akubra wasn’t the only Australian-made hatter for the diggers when they landed on the beaches at Gallipoli. But they are the only locally made hat-maker still in existence.

Each hat takes an average of 14 rabbit skins. Some of the fur comes from wild Australian rabbits, the rest is imported from places such as Belgium, France and the Ukraine; yet Akubra “content” — which, when it comes to government contracts, includes labour as well as materials — is still overwhelmingly Australian. The company employs about 85 workers at the Kempsey factory, where each hat travels through up to 60 sets of hands. In a process unchanged in 100 years, there are 19 stages involved in the making of the hat. The raw fur material goes from the cutting stage to being shrunk and formed, blocked and dyed, then “pounced” (using sandpaper to smooth the felt) formed, crowned (pressed) then trimmed. Most of the workers, who are mostly male, have been working at Akubra for more than two decades; a handful have been with the firm for 30-40 years. Dressed in shorts, t-shirts and boots and with legs the size of tree trunks, they could be retired rugby league players.

“It’s everything,” Wilkinson says about Akubra’s Made in Australia quality positioning. “I often say to people that if we went offshore tomorrow we could probably double or treble our bottom line. But the generations of Keirs that have run the business have always wanted to make hats. They’ve always wanted to make them in Australia. They’re very committed to Australia. And certainly in recent times it’s become more difficult. You could argue that it’s tempting to consider the offshore alternative. But it’s not something that has ever been seriously discussed. I work with Stephen [Keir] every day. He’s got absolutely no interest in going offshore. He’s even said to other people in the past that ‘The day we go offshore is the day I retire; I won’t do that.’ It’s not something he’s ever going to entertain, at least in the headwear area.”

One only has to step into the company waiting room at the Kempsey headquarters to note the irrevocable social change that muted Akubra’s fortunes. On one side of the room are pictures of Akubra staff picnics from the 1920s for 200-odd workers, indicating the manpower required to meet demand in those days — from the end of World War II until the late 1950s Akubra were making 700,000-1 million hats every year. On the wall across the room is another image, from the front page of The Sydney Morning Herald during the 1930s, where even during the Great Depression all but a few of the several hundred men in the photo are wearing hats with their dark suits — another reminder of how things have changed.

Back then a hat was not just a style accoutrement, but a daily necessity to fend off the harsh Australian sun. If you caught public transport from, say, Manly into Sydney, and were walking to and from work and home, a hat was requisite. But the mass mobilisation of cars as our transport of choice changed all that. People driving into the city and parking their car a short walk from the office, and then again in the driveway at home, didn’t need a hat. Also, along with the increasing and widespread casualisation of fashion during the late 1950s and 60s, men who had fought for Australia didn’t necessarily want a hat because it reminded them of the war.

Despite spiralling sales, Akubra battled through. In 1974 it took advantage of a government decentralisation scheme to move the factory and headquarters from Sydney to Kempsey — roughly halfway between Sydney and Brisbane (NSW and Queensland were then and still are the firm’s two biggest markets), and accessible by road, rail and air. But despite all of the 150 Akubra workers in Sydney being offered the option to relocate to Kempsey, only 20 made the move, 12 of them office workers.

Former Akubra company secretary Terry Hunt, 80, retired in February this year after 54 years of service. He remembers well the challenges of the early Kempsey days. “It wasn’t hard to establish the business, but it was hard to get farmers to learn how to make hats,” he recounts. “It’s artisan manufacturing that we do, and the farmers were used to doing things a little more roughly.” The first few years at Kempsey were tough for production. A lot of hats would deteriorate during manufacturing and the company was producing more waste than fur-felt hats.

It was during this time that Hunt and then owner Stephen Keir III (the company is presently owned by his son, Stephen Keir IV) made the decision, not revealed to employees at the time, to re-mortgage their own houses to pay staff wages. “It was a difficult time for us all,” says Hunt. “Young Stephen Keir III and I were having failures in the factory and the business was starting to run out of money. We both had to re-mortgage our houses to put more funds into company to keep it going. It took us a good 10 years to say we were safely re-established. And it paid off!” I ask Hunt why, not being an owner of the company, he put his own home on the line for Akubra. Hunt sucks in his breath. “Well, we’d asked people to move from Sydney, so Stephen and I both felt we had to try and keep this company alive while we could. That meant that we didn’t have to sack the hundred-odd workers we had here. We didn’t have to tell the people who came from Sydney, ‘Sorry, but we’ve failed you’. We achieved it. And that’s one of the real successes about Akubra. It’s a family business.”

The soul of Akubra, Hunt tells me later, has always been fairness. “Before any decision is made, the thought is given to ‘How is it going to affect the people in the company?’ I’m sure R.M. Williams was the same sort of person. You think, ‘Shall I go into this new venture? If it fails, what’s it going to mean for the company and its people? Is it still going to be able to carry on? Well, you care for your mother and father. You care for your children if you have any. And I think that’s the way the company operates.”

Hunt’s successor, Roy Wilkinson, agrees, saying Akubra is the most ethical business he has ever worked for. “When I first joined Akubra I knew that this job would be for the rest of my life,” he admits. “I know that I will retire here, just like Terry did. And that stems out from the Keir family. I worked with Stephen Keir III and he was always the most ethical and genuine person I’ve ever met. We always made decisions that were not necessarily in the best interests of the company, but in the best interests of our stakeholders: employees, suppliers, retailer customers and the general public.

“For example, we might have experienced a spike in raw materials costs that would squeeze us dramatically in terms of margins and profitability. I would sit there with Stephen and say ‘We’ve got to put our prices up’, and he would often say things like, “The country is in drought at the moment. We can’t do it and I won’t do it!’ Those were serious conversations that occurred both in my office and at board level where you have independent directors indicating that the company should lift its prices. But Stephen Keir III would day, ‘Yeah, well, I’m not going to and I will take the hit for it’ … Those Australian values of honesty and fairness come through here in the company.”

So what does the future look like for Akubra? “The future? Oh, we’ll be making hats well and truly after I’m dead,” says Hunt as he puts on his own with a jaunty flourish. “Akubra will go on and on. You know why? There will always be a market for a good quality hat.”

The history of Akubra

Akubra originates in Glenorchy, Tasmania. English hatter Benjamin Dunkerley emigrated there in 1874 after the Industrial Revolution put a hole in the hat-making business in his midlands city of Stockport. Dunkerley went bankrupt in 1878 but his fortunes changed in 1892 when he patented a fur-cutting machine that was adopted worldwide. By 1911 Dunkerley Hat Mills Ltd had established itself in Crown Street, Surry Hills, Sydney. The name “Akubra” (believed, but never proved, to be an Aboriginal word for head covering) was trademarked in 1912 by Dunkerley’s sales partner, Arthur P. Stewart. Australian ANZACs wore Dunkerley’s khaki slouch hats in World War I, a contract that proved lucrative for the company. On Dunkerley’s death in 1918 his son-in-law, Stephen Keir, another English emigrant hat-maker, took up as managing director of the firm, now headquartered in Bourke Street, Waterloo. During the Great Depression Keir and all Akubra workers took a 10 per cent cut in wages to avoid sackings, and the firm survived as others folded. Sales boomed in the 1940s and 50s — Akubra even made hats for US icon Stetson — but slumped in the 1960s. In 1974 Stephen Keir III moved the business to Kempsey, NSW. Akubra now employs 85 workers in the production headquarters, where the fur-felt hats are still proudly Made in Australia.

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