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Olly Shoes - A Perfect Fit
Katherine Chapman, president of Olly Shoes, was born in the United Kingdom, moved with her family to Australia and Chicago, IL before finally settling in Toronto, Canada. Early on she found that she liked to shop, and that took money. Since money was tight, working was required and Chapman babysat extensively before going into retail sales for extra cash.
At age 19, while in college at the University of Toronto, she and a classmate started a business making oversize, erasable student calendars in university colors. They started out with one or two local schools and by the time she graduated with a degree in French in 1991, they were making calendars for 300 schools. After graduation, her partner went on to law school and Chapman expanded the business into kitchen calendars selling into the gift market and eventually, into the office products market, providing planning and presentation products.
At that time, pre-blackberry and wireless communications, the company’s future looked bright. She wanted to learn more about finance and accounting so she went back for her MBA while still running the business. Over time, the office products area of the business expanded steadily and she became one of the first suppliers to Staples in Canada. After 12 years, she was approached by Day Runner, a well-known office products company, to whom she sold the business. Chapman worked for Day Runner for two years as part of the purchase agreement and ended up with both entrepreneurial and corporate experience as well as a nest egg to help finance her next venture.
While all this was happening in her professional life, Chapman was also braving motherhood and she now has four children. Just after her second child was born, she met Tom Stemberg (the founder of U.S. Staples and her current partner) while she was working for Day Runner. He was aware of her product line in the Staples stores, and asked her what she planned on doing when she left Day Runner. She talked about the possibility of a children’s department store and he mentioned the difficulty in buying proper fitting shoes for his own children.
As parents, they discussed the frustration they felt when shopping with children, how stores were needed to meet children’s needs, and an idea of how a computer program might be used to fit children for shoes. After researching the idea and working with programmers to create a scanning method and program, Chapman came up with the concept for Olly Shoes. At Olly’s, the child’s foot is scanned and a computer program measures the foot-beds of all the shoes in the store’s inventory and directs parent to the best style for the child’s foot.
Chapman’s biggest challenge was to convince others to share in her dream. She managed to find 20 investors and her first store opened just two weeks before the 9/11 tragedy. At first, times were very hard and there were days when there were no customers at all; keeping the investors on an even keel was very difficult. Now, four years later, the company is doing well with two stores in Toronto, nine more in Philadelphia and Washington, DC and plans for more up and down the east coast.
The Small Business Professors' Words of Wisdom
Finding and managing private equity investors is time consuming and difficult when you are trying to get a business off the ground. First, you must prepare both a written and an oral plan including pictures of your business location. It takes time and effort to identify and cold-call potential investors, but getting face-to-face meetings is the number one priority.
Katherine Chapman uses a subtle approach, sharing her vision by painting a verbal picture and then backing off to let the potential investor think about it. Later, on a follow-up visit, she comes out and specifically asks if they are interested in investing. In order to expand, she has had to approach the investor pool every year, starting with those who have already invested to see if they wish to maintain their ownership stake, and identifying new potential investors as well. She uses the stores’ track record to bolster her case and is sure to provide a payoff or exit strategy for potential investors. Putting key investors on her board of directors also helps keep the shareholders’ perspective close.
- Case History: Olly Shoes www.ollyshoes.com
- Entrepreneur’s Strategy: Use technology to solve purchasing problems that effect many potential customers.
- Could This Work For Me? What could make your purchasing experiences more enjoyable? Can you identify a way that technology can help? A new business venture may be just one shopping trip away.
Chapman’s biggest challenge was to convince others to share in her dream.