Teva Naot: the rise of Israel's largest shoe manufacturer
The company traces its roots back 70 years, evolving from a group of shoe makers on a kibbutz to a multinational company with 600 employees, and 80 locations spanning from Canada to Papua New Guinea..
The shoe chains history began back in 1942, when a number of Czech and Austrian Jews who were studying shoemaking decided to make aliyah. The group slowly left the world of shoe mending, and began manufacturing footwear. They started making shoes for themselves, and by November of 1946 they had already set up a factory in Kibbutz Neot Mordechai in the upper Galilee. The company's production facilities are still located on the kibbutz.
In the 1990s the plant encountered a crisis, against the backdrop of a larger crisis within the shoe industry in Israel. Naot CEO Michael Illouz, who came to the factory in 1998, recalls in an interview with Ynet, how the cost of living in Israel skyrocketed in the 1990s, leading to a decision to lower tariffs on shoe imports by 40%. The reduction in import prices severely affected shoe manufacturers in the country, and even led to the collapse of some big shoe companies.
Illouz recalled the heavy losses encountered by the plant when he began working there. There were only 90 employees at the time.
He said that after a new strategy was formulated, and thanks to the commitment and strong motivation of the employees, the plant went from loss to profit within three months.
The company currently has about 600 employees, and about 80 branches in Israel and abroad, including - Australia, Canada, USA, Europe, Korea, Papua New Guinea and more recently in Japan
The bulk of Teva Naot's profits comes from exports abroad, which make up about 70% of it's total revenue. "We built a strong Israeli brand, with the slogan: 'you're most beautiful when you're comfortable', which provides a solution for those seeking a combination of comfort and fashion," says Illouz. He adds that "In the international market Teva Naot is marketed as Naot, as a shoe company specializing in comfort."
In March 2014 Teva Naot was sold to businessman Steve Lax for about NIS 260 million. Lax says his initial relationship with Teva Naot was formed in 1974, after he arrived in Israel with the founders of Kibbutz Gezer, where he met his wife, Sandy, served in the army, and lived on the kibbutz for 15 years. Ultimately, he had to return to the US for health reasons.
In the 1980s Lax started selling and distributing Teva Naot footwear in the US, and after five years he became the plant's main distributor in the country. "That was one of the most successful decisions in my career," says Lax, "I'm happy to be the owner of the company today, as I strongly believe in the product and I expect to increase the global exposure of the company and increase sales in Israel and abroad. "
Today, the US market accounts for about 60% of its total sales. Lax notes that even though he works in the United States, production of the footwear chain will continue to be located at the kibbutz factory.
A recent innovation within the brand is the painting of the shoes by hand, called "Teva Naot Art". Illouz says that the "hand painting gives the customer a personal feeling. Each shoe has a personal touch. The technology allows for varied color combinations with unique effects on natural raw skin."
So what is the best way to buy shoes? Illouz concludes with some recommendations, and as expected, gives top priority to comfort: "When you walk with uncomfortable shoes the overall feeling is less pleasant. It is very important not to buy shoes in the morning, as the foot expands during the day. It is important to try the shoes on both feet, because sometimes there is a difference in size. Of course one must walk around the store for a few minutes to make sure the shoes fit and are comfortable."
