Akubra hats date back to 1874 when an experienced hatter by the name of Benjamin Dunkerley arrived in Tasmania from England and started a hat making business in Hobart. Shortly after his arrival, the 34-year old invented a machine for cutting rabbit fur. Benjamin began to focus his business on cutting and supplying rabbit fur and machinery to hat makers throughout Australia. Business grew substantially into the 1880s and he moved his business to Crown Street Surry Hills, the inner suburbs in Sydney. An advantageous partnership with Arthur Pringle Stewart a wholesaler of hats and caps in Sydney provided an outlet for the factory’s production.
Enter the Keirs
The business grew further in 1902 when Stephen Keir, who had hat making experience from England joined the company. The 23 year-old was also welcomed into the family business when he married Dunkerley’s daughter Ada in 1905. He later ran the company as General Manager. Since that time, the business has been in the hands of succeeding generations of the Keir family.
Each generation has had to spend considerable time learning the craft. According to Company Secretary Roy Wilkinson, “It is important to understand that the manufacture of a fur felt hat is a craft, hence each generation of Keir family has had to work at each point in the manufacturing process. This can take up to two years before they are then moved to the office to understand all aspects of management.” It goes without saying that the success of Akubra is in part due to the commitment of the Keir family to quality and to the family business.
In 1911, the business started trading as Dunkerley Hats Mills Ltd. It had a total of 19 employees, whose total output was sold by Stewart in his merchant trader business.
Upon the death of Benjamin Dunkerley in 1918, the control of the company was handed to Stephen Keir. Under Keir’s leadership, the company underwent a period of rapid expansion and soon outgrew its Crown Street premises. Stephen then moved the company into a new building in Bourke Street, Waterloo in Sydney to give greater scope for growth.
The company continued to prosper even during World War I as there was a big demand for slouch hats used by soldiers. The trade name Akubra came into use in 1912 at the suggestion of Stewart, strengthening the partnership. However on Stewart’s death in 1925, there was a shift in management which strained relations between Stewart’s successors and the company. But it was the Keir family that kept control.
When Stephen Keir retired in 1952, Herbert his eldest son succeeded as Managing Director and his second son, Stephen Keir II served as General Manager. He later took over as Managing Director in 1980. The fourth generation of the Keir family continued succession and Stephen Keir IV, son of Stephen Keir III is now the General Manager. Family is what has held the business together. Says Roy, “Family is everything. Our board of Directors comprises three family members out of a board of five, with two more family members to be introduced shortly. The company is 100% family owned and the Managing Director is keen for this tradition to remain.”
Despite the strong family bond and rich heritage, there have been problems over the years. To seek resolution of simmering discontent on the board, all the shares in Dunkerley Hat Mills were sold to a building developer Mainline Corporation in 1972. Since they weren’t in the business of making hats, they sold the factory back to Herbert and Stephen II for $500,000 which presented them the opportunity to gain full control of the business. They also bought back for one dollar the trade name Akubra which had been in use since 1912.
The company then changed its name to what is now known, Akubra Hats Pty Ltd and moved to Kempsey on New South Wales North Coast to take advantage of decentralisation incentives and cheaper land prices. The NSW government not only loaned the company $585,000 to decentralise and build the factory, but also granted them $100,000 to cover 75 per cent of the cost of moving the plant. The construction of the new plant lowered production costs as it offered the opportunity to plan for maximum efficiency.
Wars, droughts, depressions, booms and fashion changes have all affected the demand for hats over the years. During down times, the company maintains a policy of a stable workforce. Instead of laying people off, the company simply rostered staff to work shorter hours and settled for a 10 per cent wage cut for everyone in the company.
Conservative financing helped Akubra survive that crisis which caused all manufacturers but three to go broke. During this time, they simply focused on taking care of their strongest customers such as the countryside market who continued to wear hats despite fashion changes. They also became vigilant in looking for ways to counter the downward pressure and embarked on a new initiative in 1950 by approaching John B. Stetson company in the USA with regard to producing Stetsons under license in Australia. A licensing agreement was signed in 1951. The company’s ability to cope with upswings and downswings in the economy, fashion changes and other factors affecting demand has therefore proved a major factor in its success and survival.
Not only has Akubra become synonymous with hat in Australia, Akubra has turned its expertise and production capacity to advantage by becoming a world player in the hat making industry and has developed a substantial export business. Akubras are now on sale in 19 countries and 10 per cent of production is exported.
Akubra’s success in riding out the ups and downs of business activity has undoubtedly been due in part to its discipline in following some prudent operating practices such as careful financial management and profit retention. The company’s good record in financial management has enabled it to obtain bank overdraft finance as required. Likewise, loyalty to suppliers has been beneficial, even to the extent of supplier-credit being extended in tight times. Careful planning, cost and inventory control enabled the plant to meet fluctuating demands and their responsiveness to changes in fashions and styles helped them to hold out.
Their core values have been passed on from family leaders from generation to generation. Values such as family work culture, long tradition of giving priority to quality, establishing and maintaining good relations with customers and suppliers as well as providing good customer service. These core values have clearly been the basis of Akubra’s success in becoming the dominant hat producer in Australia as others have failed to survive.
Roy reiterates the point. “The various members of the Keir family have maintained the legacy by adhering to the core values of the family business.”
And the legacy will continue well into the future with the Keir family set to expand its export markets.
“We will continue to manufacture in Australia and continue to keep our brand strong,” says Roy. “We will increase our market share and expand our export markets and generally maintain a strong business for the benefit of all our stakeholders.”
This is a strong vision, but it is backed by a strong foundation and 132 years of history, 104 of those years under the guidance of a Keir family member.
The Akubra story is one of the great Australian stories and it is no wonder than many of Australia’s music, sports and political icons have been seen wearing the hat.