Companies that make things people wear have been finding it hard to make ends meet, with increasingly picky consumers who demand deep discounts before buying.
Rocky Brands, however, is finding one source of revenue — government contracts — to be a steadying factor.
The Nelsonville-based footwear and apparel company this week announced it will produce $38.4 million worth of combat boots for the U.S. military under two new contracts.
Rocky Brands beat one other bidder to win the the right to supply hot-weather boots to the U.S. Army. The contract is for one year and is worth about $8.4 million.
The company beat three other bidders to supply temperate-weather boots to the U.S. Army and the Afghanistan army. The contract is for three years and is worth about $30 million.
The company expects to begin fulfilling both orders in the first half of this year.
The contracts follow previous military contracts for hot-weather boots, awarded in February 2013 and October 2016, and temperate-weather boots, announced in February 2016.
The military contracts are “a key component of our diversified growth strategy,” said Mike Brooks, CEO and chairman of the board, in a statement.
In the face of weak store traffic and increased discounting among the retailers the company serves, Rocky Brands last year began looking for ways to boost profits. The company reduced its U.S. workforce by about 20 employees and invested in its Puerto Rico manufacturing facility to support an increase in military footwear production.
In the past, the military part of Rocky Brands’ business was “kind of hit or miss,” said David Dixon, senior vice president of manufacturing operations.
“But the commercial side of our business is volatile and seasonal,” he said. “The nice thing about military is it allows us to have very consistent production throughout the year, and we get paid very quickly, believe it or not. It’s not high margin, but it pays overhead.
“For 2017, we’ve got a very aggressive cost-reduction schedule,” Dixon said, “and we’re really focusing on productivity and reducing costs, so we think we’ll see a lot better margins. It’s good news all around.”
From The Columbus Dispatch | January 14, 2017