How to Save an American Factory
One of the few bright spots of 2020 was what happened with Rancourt & Co.
At a very dark moment the Rancourt family resolved to do something drastic to avoid having to make difficult decisions. What happened next was incredible. Mike and Kyle Rancourt decided that they were going to take a chance on something they have never done before. The company didn’t just need sales, they needed the volume of orders that would fill the factory and keep everyone working. So for the first time in Rancourt’s history it offered shoes directly to its customers at wholesale pricing through a crowd funding campaign. It was a big gamble, but the campaign’s success made it possible for Rancourt to remain at full employment all last year.
Rancourt customers did what we are all trying to do right now. They each made a small purchase —a pair of Maine hand-sewn shoes at a significant discount— and collectively helped to prevent disaster. This is a story we should be reading about in the business section of major newspapers. How a small Lewiston, ME manufacturer innovated to save the company and prevent having to lay off a single hard working factory workers. The campaign was so successful that Rancourt was able to fill its factory with work for months.
What happened in Lewiston is an amazing success story, but in 2021 things aren’t back to normal as we all know. Rancourt still needs all the support it can get. This week it launched its second crowdfunding campaign with some new styles that go beyond the classics of the first sale. The Beefroll Penny Loafers are also included in this sale and they are the best shape, construction of any American loafer available — fight me.
Shoemaking at Rancourt is different than other footwear factories. It’s not all automated. It’s much more of a traditional technique that is almost extinct in Maine. Preserving traditional hand-sewing is important and there aren’t many companies like Rancourt still doing it. These techniques of making shoes are distinctly American and it’s meaningful to me that it continues to exist.
I spoke to Kyle Rancourt about what happened in 2020 and what’s happening now. Our Q&A is below.
ACL: As a brand and a manufacturer, what has business been like during the pandemic?
Kyle Rancourt: The best way to describe it is a rollercoaster ride. Q1 2020 looked bleak, potential for significant layoffs and then we did our first ever crowdfunding which was game-changing. The support from our customers old and new was amazing and really kept us going for the next six months. After the crowdfunding business was slower than usual but then picked back up around the holidays and we had our best holiday season ever. So a lot of ups and downs but we came through it safely because of our loyal customers.
Owning a factory adds another layer to the challenges. How does being a manufacturer make things more complicated for Rancourt?
First and foremost you can’t manufacture our footwear from home, so we had to adapt to the situation and make sure everyone was safe and healthy. There’s also the reality that we have 40 people relying on us for their livelihoods. We couldn’t exactly pivot to a new business model, we are finely tuned for one thing which is making shoes so we had to find a way to make it work and keep enough volume flowing through the factory that everyone could work 40 hours a week.
People often don't think that it makes any real difference to a company if they make a purchase. It seems like in this situation all of these individual orders taken together made a huge impact on Rancourt as a company. Can you speak to that?
That’s absolutely right, every order does matter. Each pair we sell is literally hours of work for our shoemakers. The crowdfunding campaign literally saved the jobs of potentially dozens of people. We have a small factory, we’re not talking about hundreds of thousands or even tens of thousands of pairs that make a difference. The first crowdfunding campaign kept our factory busy for almost six months. We value everyone who supports us.
What was the response to the new model? How did you feel? What was your father Mike's reaction? How did the employees respond?
The crowdfunding model was so successful for us because there are economies of scale in shoemaking as with any other type of manufacturing. The more of one thing you can make at a time the more efficiently you can make that thing. In this case, instead of pocketing those additional profits from increased efficiency we are passing the savings along to our customers, it’s a real win-win. We’ve learned that our customers are willing to wait a bit longer for their shoes to be made in order to receive a significant discount. In addition, at the volume of pairs we are able to generate through the crowdfunding model we can be successful even at a discounted price.
I was excited about it and felt like it would work, my father was a bit skeptical. He wasn’t convinced we’d be able to sell enough pairs in one large group to make it work. But to be honest, no one expected the response to be so strong, we were blown away by the support. Our shoemakers were all really grateful for the support, they have friends and family who were being laid off or losing their jobs so they knew how important this was for our company and community.
What did 2020 teach you all as a company and as a family?
As a company we learned that our old ways of doing business needed to change a bit. Online shopping, work from home, communication technology have all changed the way we live, work, and shop. We had to adapt to those changes. The power large groups of consumers have is immense, they can make or break a small company like ours. As a family we have learned that our personal relationships are more important than the business relationship. Ultimately that’s what will endure, the bond our family has, so we’ve spent a lot of time recently nurturing that.
Things are still challenging so Rancourt just released a new crowdfunding campaign. How is this release different and what did you guys learn?
Yes, the reality is that things are still difficult. Orders from all parts of our business are lower than usual so we still really need support. We need the volume of production a crowdfunding campaign can provide to keep our factory running at capacity. Our biggest goal this time around is to get the delivery dates right. We didn’t limit the number of orders we were taking last time and it led to some people waiting a really long time to get their shoes. This time we have analyzed materials and production schedules so we can give more accurate shipping estimates. We have a set number of pairs of each style available and once they are sold out we are closing ordering. I think this is the best way to serve our customers and supporters. On the product side we’ve added some really handsome boots and shoes with more durable outsoles. They will be perfect for Spring-time when they will be delivered.
Any other funny or interesting stories?
Last summer we had a series of outside picnics at our factory to reward our employees for all of the hard work they were putting in to get the crowdfunding orders fulfilled. Just for the hell of it I called this local restaurant to see how much it would cost to buy Lobster rolls for everyone and it was surprisingly affordable. (You can’t underestimate how affordable lobster is in Maine). So we treated everyone to a Lobster and clam chowder lunch (socially distanced and safely served) and it was a hit, they loved it. So when Christmas rolled around and we were planning the annual party the employees made it known they expected lobster again. So basically the shoemakers at Rancourt & Co. only eat lobster now.
You can support Rancourt & Co, the skilled craftspeople who make these great shoes and continue the proud tradition of American hand-sewn shoes here.
It’s unlikely that we will ever see prices like this and your support is greatly appreciated by me. I bought a pair and I encourage you to do the same. If you can’t afford to buy anything, please consider helping to spread the word of the crowdfunding campaign.
Loved seeing the follow up story. The ACL hug of death is rapidly selling out a lot of the options. Unlike last time, I placed an order. "Its a good thing!" - Martha Stewart - Me.
I be picked up a pair of natural loafers and I ordered a pair of the black LH soles this time. The delays for the first round didn’t bother me, it’s not like I had places to go and I figured that my order being delayed meant the factory was busy which was the whole point of the crowdfunding in the first place. Next up are a pair of driving mics, just need to settle on a color.