Playing The Sock Market

This article, written by Deborah Birkett, appears in the January issue of REX OUTLOOK 2008.

 

A million pairs of socks a year, even your dryer can’t eat that many. But Cambridge based Simcan Enterprises Inc. sells that many to a specialized market that is proving very lucrative.

 

Simcan makes socks for people who have medical issues affecting their lower leg, such as diabetes, edema, vascular disorders and arthritis. The high expansion socks are designed to sit passively on the leg and not restrict the blood flow to the lower limb.

 

Husband and wife team Jim and Marsha Simmons attribute their success to their professional partnership. As president, Jim handles sales and marketing. Marsha, the firm’s vice-president, is primarily responsible for financials and production forecasting.

 

They’ve worked together since 1991, when the market downturn inspired Jim to leave a position in real estate to start a business with Marsha, who was working as a controller for a Guelph hosiery manufacturer. Marsha recognized niches her employer wasn’t filling, so the couple started Simcan to fill the gap.

 

The company did lots of private label manufacturing for major retailers, but Jim calls that a dollars and cents game. If the retailer can get a 10 cent advantage elsewhere, they go there. You’re continually under the gun to sharpen your pricing and lower your margins.

 

Six years ago Simcan made a risky move, eliminating many product lines even the profitable ones in order to focus on socks for the medical market. It turned out to be one of its best decisions. Since 2003, the company has experienced 650 per cent growth in its corporate brands. Private label orders now account for less than 15 per cent of its sales.

 

In early 2007, Simcan branded socks passed a stringent review process , earning the Canadian Podiatric Medical Association’s seal of approval. The company, which has 19 full-time employees, expects this third – party endorsement to further enhance sales.

 

Rex asked Marsha and Jim for their top tips on how to run a business:

 

1. Build your own brand.There’s no equity in private label, says Jim. There’s equity in your own brand. I don’t care what product you make or what service you’re offering, everything you do should be branded, recognized and identifiable.

 

2. Keep evolving. We started off as retailers, became job lot wholesalers, then fashion producers, says Jim. As the market evolved, our company’s had to change and really wear a different face to be current and survive. That’s probably the biggest challenge;reading the landscape and knowing where to go in order to survive the next change.

 

3.Give employees full ownership of projects and problems.Give them control to run the project, to do their utmost with it; says Marsha. It’s very important to give employees that power. If you won’t, they can’t do the job properly.Adds Jim: And they can’t grow as individuals. If an employee takes on a problem and succeeds at it, they’ve grown, and you’ve grown as a corporation because you’ve got a stronger base of employees.”

 

4. Listen carefully to customers. We’ve learned an awful lot from our customers over the years,says Marsha.You get a lot of good ideas. Customers want to engage with you, if they believe in your product .You can really learn a lot from them. They’ve got eyes out there all over the place.

 

5. Be passionate. That’s critical,Jim insists.It resonates all the way through the company. If your employees recognize the passion behind your product, they pick up on that, and if they’re passionate about what they’re producing, you’re going to have a better product. It’s easy to become blase and lose a bit of that passion, and sometimes you have to work on it, but it’s critical to how you sell your product.