A pirate flag flaps alongside those of the United States and Argentina. Three yellow camping tents provide outdoor meeting space for conference-room claustrophobes. The building's interior, designed by the firm that did J. Abrams's office, is a warm, wooden confabulation of playfulness and inspiration. Near the entrance, a barista serves beverages by Toms Roasting Co. The Toms story is everywhere, from a small museum that resembles a barn and holds company memorabilia to the immense photos from giving trips.
Toms' initial success, and much of its growth, derives from storytelling , of which Mycoskie is a master. And Toms has a damn fine story to tell. In , Mycoskie, a serial entrepreneur who was running an online driver's-ed business, travels to Argentina for a little polo, a little tango, and a little vino. Shaken by what he sees, Mycoskie wants to supply shoes himself, and to fund those donations through commerce rather than charity.
His solution is elegance incarnate: Sell a shoe, give a shoe. Cue the montage. Mycoskie fabricates his first shoes--an Americanized version of Argentina's soft, slip-on alpargatas--in tiny artisanal shops. Back in the States, Mycoskie wakes up an overnight sensation, thanks to a prominent article in the Los Angeles Times. Interns hide from Mycoskie's landlady in the bedroom of the Venice, California, apartment from which Toms will sell 10, pairs of shoes in one summer. On his first shoe "drop" in Argentina, Mycoskie cries while slipping shoes onto children's feet.
Today, Toms has employees and five product lines, each with an associated give. The logistics of the gives differ in each country, as do the target consumers for some of the products, like handbags and backpacks. The inviolable core of Toms is a promise to the consumer that each purchase translates into a better life for someone halfway around the globe.
Because the company sold so much, "we had to give so much," says Mycoskie. Of course, Mycoskie didn't start an NGO. But accomplishing Toms' charitable goals requires collaborating with over NGOs and other nonprofit "giving partners" in more than 70 countries. Much of its experimentation involves how it works with those partners. Shira Shafir, a UCLA epidemiologist brought in to run part of Toms' giving department, has a plaque on her desk with a quote often attributed to Einstein: "If we knew what we were doing, it wouldn't be called research.
Toms is always seeking better ways to give. In particular, it seems to be addressing one criticism that has dogged it for years: that it offers humanitarian aid rather than economic development. In , Widmer, who was then running a social venture fund, gave Toms an innovation award. But he later grew skeptical. Being a giver of fish rather than a teacher of fishing "is not the way to deal with poverty," says Widmer.
A concern related to sustainability is dependency. In , Bruce Wydick, an economics professor at the University of San Francisco, and two colleagues conducted randomized trials at Toms' behest on the effect of the shoe giveaways in El Salvador. Their research showed, among other things, that children receiving shoes were 10 percent more likely than nonrecipients to say that others should provide for their families.
That increased reliance was "probably the most negative effect we found," says Wydick. The paper ignited a backlash, led by a particularly scathing Vox article. But that article "rather dramatically misses the larger story about Toms--and that is that poverty work is very difficult," says Wydick. We have to test those things to find out.
Among those adjustments is Toms' pivot toward gives that promote things, like health, that enable self-sufficiency. For example, Toms sells sunglasses and glasses frames, but in poor regions, instead of distributing those products, the company provides eye exams and medical care. Mycoskie "saw the importance of a program's being able to offer a much more full spectrum of the eye care people need. Such gives make up less than 10 percent of Toms' business.
The rest is still shoes. Toms says both independent and its own research demonstrate that shoe distribution prevents diseases, like hookworm. But the company also works with its partners to apply the shoes to broader goals. To cite one example, giving partners are testing the shoes as an incentive for women to bring children to clinics for vaccinations, and to participate in microfinance programs aimed at encouraging entrepreneurship.
It is not yet clear whether Mycoskie will continue to have a role with the company given that he will no longer be an owner. Toms was founded in by Mycoskie, a former contestant on U. Since then it has gifted close to million pairs of shoes to children, according to a statement the company issued last month.
Toms has expanded its gifting model beyond its casual footwear, known as alpargatas , to other retail categories. Visit the TOMS Privacy Policy for details regarding the categories of personal information collected through this website and the business and commercial purpose s for which the information will be used.
California Consumer Privacy Act Notice Visit the TOMS Privacy Policy for details regarding the categories of personal information collected through this website and the business and commercial purpose s for which the information will be used. NEW festive flamingo print. Shop Cozy styles. Brighten up the holidays! Shop here. Toms responded by expanding its charitable enterprises and other moves.
Reuters reported that the company has suffered amid heavy discounting and competition in footwear and as the "novelty" of its giving model "wears off among consumers.
In that respect, Toms' story is very similar to that of scores of apparel and footwear sellers in recent years. Leveraged companies fighting fierce competition on pricing and convenience, especially against ascendant online and off-pricers, are forced into bankruptcy or debt restructuring deals, if not liquidation.
Toms managed to avoid the worst-case scenario. It made a deal for its lenders to take over, which often happens in bankruptcy restructurings, and it did so without an expensive court process that could have done lasting damage to its brand. But the hard work of turning around sluggish sales remains ahead. To that end, Alling told Toms employees that the new capital into the company " will enable TOMS to further invest in our promising growth areas and continue our commitment to giving.
Follow Ben Unglesbee on Twitter. Bottlenecks from factories to cargo ships mean less inventory and fewer discounts for the season. The pandemic upended some trends and dramatically accelerated others to further disrupt the flow of goods from manufacturers to retailers to consumers.
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