An Interview with Bruce Katz, CEO of Samuel Hubbard
This week we are thrilled to sit down with the founder of Samuel Hubbard, Bruce Katz. Inspired by a long history of making quality shoes with his family and the Rockport brand, Bruce founded Samuel Hubbard in 2014 to honor the shoes he loved wearing and selling during his years in the business. Read below his story and why he feels so passionately about continuing his family legacy.
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Founder Stories → Bruce Katz, Founder & CEO at Samuel Hubbard
For Assembled Brands, the ability to work with a founder so committed to his craft and his customer was an opportunity like none other and one that continues to inspire us each day.
What was the driving force behind launching Samuel Hubbard?
One morning, my daughter came to breakfast with a drawing of a shoe she had made in school and asked me if we could design shoes together. I was deeply touched by her innocent request and said I would think about it. Six months later I found myself at a shoe show in Las Vegas revisiting an industry I had left long ago.
When Samuel Hubbard got started I went back to the shoes I loved In my Rockport days. I returned to Portugal where we had made many fine shoes and I re-connected with a Swiss shoemaker who I had worked with many years before. The two of us got excited to work together again and for 18 months we built prototype after prototype trying to create a shoe that fit perfectly and that we loved. From these efforts was born a new shoe company dedicated to making the finest shoes possible and with unmatched comfort and fit. We made a commitment to build a following of happy and satisfied customers and we created a company culture that conveyed in every action that they, our customers, had a friend in the business. We made a conscious decision to listen to our customers, to trust them, and to be generous in our dealings with them. Our motto was ‘making friends, one pair at a time.’
How has the challenge of working capital affected your business? How has partnering with Assembled Brands changed that?
During the first years of our business we were self-funded. As the company grew to over $20 million in sales we realized that we needed additional financing for working capital and we found that most of the banks were unwilling to extend credit lines to companies that were not yet profitable. With Assembled Brands we found a partner that understood the challenges of building an online audience and branded line of products.
What should a future founder be most aware of before launching a brand?
When presented with a new brand, consumers today want to know the story behind that brand. What is the reason for its existence and are the founders passionate about what they are setting out to do? Creating a brand is extremely difficult and can only be achieved if the product or service fulfills a real need for the target audience. Brands have to be created out of the satisfaction of the customers. In the shoe and apparel business, in particular, you need to convey that there are real people putting their hearts and minds into the creation of the products. The reputation that becomes the foundation of a brand, has to be based on real product distinction and making every effort to build a long-term relationship with the customers.
How have you managed to handle Covid-19 and the impact to wholesale channels?
Up until the spring of 2020 we were continuing to make capital expenditures to build our audience. We had started looking for our first outside investors to help fund our growth. That was when the pandemic struck and by February we realized that the whole world was about to change. We realized that we could not continue with the size of the staff and the overhead we were carrying and within 6 weeks we had to cut our staff back from 37 people to 15. We had (and still have) a wonderful company culture and thankfully people understood that we were not going to be sustainable if we continued on with the company as it was then configured.
By April it became clear that our retailers were going to be in big trouble and the wholesale business (which was 25% of our revenues) came to a halt. We had been selling in 500 doors in the U.S. and we realized that for the foreseeable future the wholesale business was not going to recover.
We are just beginning to map out a wholesale strategy going forward but it will take some time before the stores have the appetite and the credit line to begin buying again. The fact that we have inventory for at-once shipping does help as many of our competitors do not have goods available.
What’s next for Samuel Hubbard?
The silver lining for Samuel Hubbard is that we have become much more analytical and efficient since the spring of 2020 and since June we have turned both cash flow positive and EBITDA positive. The business in e-commerce is only half of what it was before the pandemic began, but we are adding new customers every day and our existing audience continues to return to add new shoes to their wardrobes.
We have pivoted in our product offerings from Go to Work (think offices) to Work from Home and these new shoes are doing very well indeed. We have one new sporty offering (Hubbard Flight) that is the fastest selling new shoe we have ever launched. Our web traffic is up over last year in spite of our marketing budget running at only 15% of its previous level.
Going forward we are now in a good position to expand our digital marketing campaign on a much more cost-effective basis and we are going to be returning to more print and mail-order catalogs for 2021. Our team works closely without an office and we are beginning to add new talent to our digital marketing efforts for the coming year. We expect to see the wholesale business regrow and that will help us as well.
We are optimistic about 2021 and are grateful for having survived this most difficult time. In the end we believe we are coming out as a healthier company and are well positioned to grow the business based on the goodwill of the brand and the new products we are introducing.