We recently announced that we're closing our Ethiopian factory, and I'm ready to answer any questions about the trials and tribulations of the past few years and what this step means for the future of Oliberté. I'll be here answering question from 2pm EST onwards, talk to you then. Proof: https://imgur.com/HTlrJQL

Comments: 54 • Responses: 20  • Date: 

cultofclouds5611 karma

Obviously, a large question I'm sure, but what were the main reasons the factory in Ethiopia didn't work out? The country is actually making pretty concerted efforts to industrialize (tax incentives, industrial parks, etc) and in recent years more fashion players have moved in (J Crew, H&M). It was even recently heralded as one of the more promising countries from a labor cost perspective for manufacturing.

Was the political/economic climate of Ethiopia a driving force, or larger issues with the business model?

OliberteTal7 karma

Great question. From our side, the political/economic climate was not an issue ever. We were very fortunate that within Ethiopia, the policies in place and government was very supportive of our efforts from the beginning. In our case, the real reason was that we couldn't grow sales fast enough to manage the continued expenses in running our own factory.

o20004 karma

Hi Tal, I have about 10 pairs of Olibertes and it's been my favorite shoe brand for the last 3-4 years. Huge respect for what you're trying to do.

Is your plan to keep Oliberte made in Africa?

Regarding marketing, how do you think your strategy will change in order to reach a new audience?

Last question, would you be interested in working with an agency that specializes in working with only Fair Trade and B Corp brands? I am a Creative Director currently exploring whether brands such as yours need a more specialized service from people trying to achieve the same thing.

OliberteTal8 karma

Thanks for the support! I may look at ways to still keep aspects of the brand and the supply chain within Ethiopia or other countries in Africa. That said, for the coming period our focus is on selling our stock, paying our debts, and then revisiting options once and if it makes sense. In terms of marketing, I think the key will be wherever we make it, is knowing what our customers want whether in Ethiopia or New Zealand or Brazil - I think it's about being honest and transparent (even if it's not great news) with those who trust their dollars to you through buying your product.

Momothegreat4 karma

Hey! Love the shoes wondering what the factory closing means as far as shoe sales moving forward? Particularly regarding availability and materials used?

OliberteTal4 karma

Hi. Thanks for the message. In terms of the stock, we still have a good amount of our current stock and so will continue to sell it all until it's sold. If you see something that is currently not in stock, we likely will not be stocking it back unless in rare cases we find stock through our warehouses since we continue to check physical stock, so our website is most accurate.

Momothegreat1 karma

So just to clarify once the stock on the site is gone the company will be closing?

OliberteTal3 karma

My hope is to begin making the shoes somewhere else at some point so the Company and mission maintains, but I don't have a timetable on that currently.

Momothegreat1 karma

Okay! I hope everything works out and you're able to keep stuff going. I really like the company you've built and stand by it wholeheartedly.

OliberteTal1 karma

thank you!

amortensen713 karma

Hi Tal. If you where to start up a new factory today in Ethiopia. What would you do differently. From owner structure to partnerships to some of the new foreign direct investment opportunities (business parks etc?).

OliberteTal5 karma

In our case, I don't think it's what I would do differently. Our legal set up was fine and we had enough capacity. The Government in Ethiopia was very supportive. We did have challenges with leather for a number of years in terms of quality and consistency, so we explored opening our own tannery a few years back, but in our case it's just that the brand wasn't growing fast enough to manage the costs at our factory.

adamlames3 karma

Hi Tal!

What do you think customers didn't "get" about Oliberté?

(I own 5 pairs. Love them all!)

OliberteTal5 karma

Hi Adam. I don't think it's that customers didn't "get" Oliberte - since we began we sold over 200,000 shoes and bags so not a small feat. Our customers, love our styles and mission and how it ties together in an authentic way - not everyone of course, but many do. The challenge was really that we couldn't grow fast enough with the product made in Ethiopia to cover the amount of money I and my investors were putting in over the last 10 years. Reflecting back if I was to look at other reasons for those that don't 'get it,' it could have been part design, part price, part quality.

jon_eaux3 karma

Hi Tal, I love your brand and own a pair!

What were some of the unsustainable parts of the business at your scale? Do you think you actually found your product-market fit (could you have become sustainable by becoming an ultra-luxury brand?)?

OliberteTal4 karma

I think there were times we spent too much on marketing where the return wasn't what we expected or we didn't have enough "good" stock to support those marketing efforts for the products we made in Ethiopia. At times, it could be argued we had too many styles which made it difficult from a factory, marketing, inventory and cash perspective. I do think we have a product market fit and really know our customers well, just it's niche - which isn't a bad thing (ie to be niche), but when you bring on investors you promise them big results and niche isn't big or usually doesn't give you a great financial return.

greengoldred3 karma

Hi Tal, What was the most difficult part of setting up a manufacturing plant in Ethiopia?

OliberteTal5 karma

I think we were very lucky to have amazing people on the ground from our GM to our factory workers to help us navigate through most difficult situations we faced. Owning your own factory is financially difficult so at a high level managing our cash flow was a huge challenge, but that's not related to just Ethiopia - that's any business, especially one that tries to own more of a it's supply chain.

MotorbikePantywaste2 karma

Hi Tal! Are you going to be moving the production elsewhere or do I need to buy my last pair of Oliberté shoes now?

OliberteTal6 karma

As of now, our current stock on hand is the last of our shoes and bags that were made in Ethiopia and Fair Trade Certified. I am exploring some other options to continue the ethos of the brand (outside of Ethiopia) but those details are still in the works.

djeucalyptus2 karma

Hey there. Thanks for doing this! A big fan of Oliberté, both because of the style of the boots, and the ideals behind the brand.

Do you still envision potential for Fair Trade certification moving forward? Or was that unique to the circumstances surrounding the Ethiopia factory? And along those lines, do you envision the posibility of Oliberté continuing in some form without Fair Trade certification? Or do you view that as a USP that defined Oliberté?

OliberteTal3 karma

Great questions. Quite honestly I believe in the reason behind being Fair Trade Certified. We had on site audits and that was really important for me in terms of transparency. That said, many of our competitors promote their brands as "fair" or "fairly made" and I struggled to see that they were getting the same marketing benefit as us with no audits. That said, I still believe in the process of Fair Trade certification, but I'm not 100% I would recommend it for all companies - some should for sure get it, depending on their industry; but there are costs to it which I didn't mind as it allowed our workers income they deserved but we could have also provided that without being certified.

djeucalyptus2 karma

Thank you for the thoughtful reply! Part of the reason I was drawn to your brand was the certification, but as a consumer, I do struggle with how much importance I put on FT certification. Knowing a brand cares (and can prove it in some fashion) is almost more important to me. Thank you for giving a glimpse into your take on it.

OliberteTal1 karma

My pleasure. Please stay in touch.

Mushambo2 karma

I'm a big fan of the company and was quite saddened to read your closing email. Do you think this says something about the overall chances of success for sustainable/FT-based businesses (i.e., production costs are inherently disadvantageous), or do you attribute this setback specific to Oliberte? Were there any strategic stumbles you can see in hindsight, were customer acquisition costs unexpectedly high, etc.?

OliberteTal2 karma

Thanks! I don't think this stumble has to do with our sustainable model. That was never our crutch nor our reason for success - it help tell part of our story, but people bought our shoes for the style first, but the story helped. This really came down to it being very difficult to run our own factory without continued investments by myself and our investors. I believe that would have happened if we were sustainable or not.

douglasroest1 karma

Hi there

What is it about the factory in Ethiopia that is challenging to maintain financially? Is it cost of utilities (electricity, etc)? Is it cost of labor?

On that note, as an ethical brand, can you disclose what about Ethiopia policies and law was beneficial for the labor pool? Were the employees in the factory paid well? What are they going to do once the factory closes?

OliberteTal2 karma

The challenge is not related to Ethiopia, but really related to inventory management in our case. We were always buying paying expenses whether utilities or labour or raw materials sometimes 6-7 months in advance before we ever sold a shoe and that cycle of cash out, no cash, eventually cash in become a challenge too big for us to keep running operations in Ethiopia.

In terms of our workers, I do feel they were paid fairly. Well is all relative to what their needs were. Some were single, some had families, some took care of many families. I do know that with our pay and our additional fair trade premiums we provided income and opportunity that we felt gave our workers a step forward in their daily lives.

Gamblor291 karma

Hi Tal,

Which style of Oliberte would have looked best at Rocky Mountain High on a Wednesday night?

OliberteTal1 karma

I'd say the Ngola!

raven00x1 karma

I have a pair of oliberte chukkas and I like 'em well enough, but I'm not a huge fan of the flat sole look. Any chance of a heeled design in the future? (I think that's the right term - shoe with a slightly elevated heel). Thanks!

OliberteTal2 karma

right now we're exploring next steps since we just closed the factory, but appreciate the design idea and something to consider for sure. thanks!

kayamagan1 karma

One more,

were sales good in ET? did you accept birr?

also I held you as such a monument of industry in ET were there crazy thoughts about financing from someone african tycoon like Al amoudi? Or someone like Akon seems as though would have been supportive?

OliberteTal2 karma

We didn't do much sales in Ethiopia aside from what we sold in Debre Marcos. That was a very small part but I do know for many local shoe factories, there is a good amount of business. Looking to sell in the local markets especially outside of Addis has lots of potential.

o20001 karma

Would you ever expand into clothing?

OliberteTal1 karma

Something I have thought about in the past, but not at this time.

kayamagan1 karma

Another customer with the highest respect for you, Ethiopia and the company...

I remember immediately after buying my 1st pair 2/3 years ago I bought my sister a pair. The day she received her gift from me, she was gifted a separate unconnected pair of Olibertes! Suffice it to say in Denver, CO I saw sooo many people rocking your boots! Here on the east coast US I get love (and envious hate hehe) every time I step out with em!

Question is: with your styles, craftsmanship, marketing, integrity, all around 🔥 generally speaking not enough could be produced in ET or... not enough be sold? Seemed like the organic growth was great..

Thanks again for everything blessings for the future

OliberteTal2 karma

Thanks for the question. And support! I would say it's a bit of both. We couldn't sell enough, but we also couldn't make enough due to some supply issues. That's not all on the factory. If we had enough capital we could have pre-bought more raw materials but we then we would have needed more cash. Some companies are fortunate to have that sort of capital but we didn't.

JeReddit291 karma

Hello Tal, hope you know your brand has been an inspiration for a lot of other fairly produced brands. What is the next step in terms of the machinery, accesories and raw materials in your Ethiopian Factory? Will anyone of them be available for sell?

OliberteTal1 karma

Hi, thanks for the question. We are exploring options right now to sell our assets including the machinery and raw material. There are a few local regulations we need to clear first to get the approval to sell our machinery but that should be completed in a few months.