How Dansko footwear left Maine and landed in China

An overpowering smell of fresh leather and the words printed on stacks of cardboard boxes containing Dansko shoes inside the company’s West Grove, Pa., distribution warehouse are jarring to the senses.
Made in China, most of the boxes say, or Made in Italy. None say Made in U.S.A., but that’s not to say Dansko, the 22-year-old Chester County, Pa., company that made stapled clogs popular across the country, hasn’t tried.
The impressions are all the more striking because just a short stroll away stands a headquarters building that projects a company with a capitalist conscience. Visitors are greeted by an indoor wall of plants hydrated by a waterfall of recycled rainwater and other accouterments of a business driven by more than just low-cost, high-profit mathematics. The Dansko nerve center has LEED Gold certification, a stamp of environmental approval.
Much about Dansko L.L.C. and its founders, Mandy Cabot and husband Peter Kjellerup, reflects a business vision fixed on a broad horizon: Employee stock ownership is part of the privately held company’s mix, as is a “B” corporate structure that rewards decisions that consider more than profit.
Yet like countless footwear companies over the last two decades as the nation hemorrhaged its shoe-manufacturing footprint overseas, Dansko has failed to achieve perhaps the most symbolic goal of a company attuned to its place in the economic ecosystem. It has not found a way to make in America the shoes it sells to Americans.
That may be about to change, with Dansko completing a plan for a new line of shoes to be manufactured from molds in a stateside factory as early as next year.
Currently, 80 percent of Dansko’s bulbous clogs and other ergonomically designed shoes are assembled in China and 20 percent in Italy — an equation the company is eager to recalculate.
If all goes well, Dansko hopes to manufacture a new clog from recyclable material in Arkansas in 2013. A nonrecyclable version called Avalon Pippa debuted this spring in stores. It is made in China.
“We’re making it in China because they’re up to speed and ready to go with it,” Cabot said of the factory churning out the virgin-polymer-based Pippa on sale now in neon bright colors.
Cabot and Kjellerup stumbled upon stapled clogs on a trip to his native Denmark. Thinking they were perfect for the farm, they brought batches to Chester County and sold them one pair at a time.
Word spread, demand grew, and the couple struck a deal with a Danish manufacturer to introduce them to the U.S. market under the brand name Dansko.
Made in Maine

The company was born in 1990. In 1995, despite the cachet and craftsmanship associated with having the clogs and other so-called “Euro comfort” shoes made in Europe, Dansko commissioned a factory in Maine to assemble the clogs. It imported the outsoles from Italy, used U.S. leathers, and employed the technical expertise of Danish technicians, Cabot said.
“Being made in the U.S. was a really great thing, and we would have loved to continue there,” she said. “But after about 18 months of manufacturing in Maine, there was so much attrition in the workers and workforce up there that we simply couldn’t continue.”
Dansko had set up shop in Maine as other shoe manufacturers had pulled up stakes from the Northeast for foreign shores. It was hard to find and keep talent; the industry was vanishing.
“We had two technical people from Denmark over here, and they kept getting really bad results,” Kjellerup said. “Half the shoes, we couldn’t sell because the quality was so bad.”
And then to Poland

The next year, Dansko left Maine, and its Danish manufacturing partner instead expanded production to a small town in Poland. There was enough of a shoemaking industry there that the factory was up to speed in no time.
“They put the machinery in, and within three to six months they were full running, they had worked out all the bugs,” Kjellerup said. “Within six months, we had perfect shoes come out of there, no problem.
“After banging our head for 12 months over here,” he said, “we went to Poland, and it went just like that.”

On to China and Italy
Dansko parted ways with its contract manufacturer several years ago, reengineered its clogs, and began manufacturing them through contracts with factories in Brazil in 2006, Italy in 2007, and China in 2008. (Brazil is no longer in the mix.)
Dansko says its migration to China and its retention of operations in Italy stem from its desire to use high-quality materials and skilled workers so that its clogs, for one, last seven to 10 years. Its shoes also must be durable enough — and constructed at costs efficient enough — to command U.S. prices that are far from bargain-basement: roughly $120 to $135 for clogs; $115 to $140 for sandals; up to $235 for boots.
“We’re not moderately priced; we are expensive,” Cabot said. “We’re best-in-class for what we do. We’re not the most expensive shoes on the planet; surely we’re not that. But we’re not driven by the least expensive prices we can get and trying to squeeze out the highest profit.”
Why start with a molded shoe in the United States? Labor costs are lower than they would be with a 54-component leather shoe.
The Avalon line is a baby step. Even if it proves viable, do not expect Dansko to make leather shoes stateside soon.
Even if the company were to offer U.S. workers wages similar to what it pays in Italy — $18 to $20 an hour — its founders say there would remain the fundamental issue of where to find people with the expertise, or the desire, to take those jobs, given how shoemaking as an industry has been decimated.
“It’s really about there’s no knowledge — no knowledge, no support structure,” Kjellerup said. “Because if you had that, I think America could be competitive in manufacturing.”
Last year, Dansko sold more than 2.5 million pairs of shoes. It continues to grow in what it calls a socially responsible way. And, for now, it remains focused on a biodegradable molded clog that would say “Made in U.S.A.”
“It’s a wonderful thing to have a shoe company with roots here in Pennsylvania … expanded first to the U.S., then to the Far East and South America … and then, with the ultimate goal of coming back,” Cabot said. “We’re not quite there yet.”

© 2012 The Philadelphia Inquirer
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