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And as the Australia economy booms, one small company is trying to demonstrate that shoes could be made ethically, the profits sent to a worthy cause, and still look cool.

Gideon Shoes makes sneakers; inspired, designed, and marketed by young people in a tough suburb of Sydney. The company is struggling as its idealism collides with the economics of global production.

As part of our series on social entrepreneurs, NPR's John Burnett reports on the upstart in the shoe industry.

JOHN BURNETT, BYLINE: Meet the executive steering committee at Gideon Shoes. I didn't go through the vice president for corporate communications to get these interviews. I walked through a basketball court with walls covered in graffiti, and into a sound studio where the directors are warming up their talking points.

SUHKDEEP BHOGAL: (Rapping) The streets are darker than the chalkboard you're writing on. There's no excuses in this life, so I'm fighting on. They say there's a little bit of light inside a soul but the flame inside my heart is more like a firestorm...

ALLAN: (Rapping) Exposed to the truth, choices that you've chosen to do. Trying to live a life without fight.

THANE POLOAI: (Rapping) I'm from S-Y-D-N-E-Y, where we hang. Home of the mullet boys drop it with the Ts, where the fellas stay fresh...

BURNETT: They are, in order, Suhkdeep Bhogal, from India, Allan, from New Zealand, who didn't want to give his last name and Thane Poloai from Samoa. All are in their early 20s. All are regulars at the Street University, a youth center in the immigrant, working-class Liverpool suburb of Sydney. Young people come here to play basketball, rap, break dance, do their homework, get counseling and try to stay out of trouble.

POLOAI: (Rapping) ...drop in the opera house...

(SOUNDBITE OF LAUGHTER)

POLOAI: Uh. Yeah. Yeah.

(SOUNDBITE OF LAUGHTER)

BURNETT: This is where Gideon Shoes was born. Bhogal, whose rap name is L Fresh, is program coordinator at the Street University.

BHOGAL: For me it's bigger than just being a shoe. I love it because of the story behind it.

BURNETT: The story begins with Matt Noffs, the bearded, impassioned 32-year-old co-founder of Street University, and the grandson of Ted Noffs, a pioneering humanitarian who worked with troubled Australian youth.

MATT NOFFS: I wanted to produce a shoe that the world hadn't seen. And that's what we've done.

BURNETT: Gideon's main product is sneakers - high-tops and low-tops - white with colorful uppers, some are made of kangaroo leather and even cane toad, a pestilential amphibian whose skin looks surprisingly spiffy when dyed pink and gold.

The 16-month-old company has a larger social purpose: it plows its so-far-meager profits back into the Street University for which the shoe line is an ongoing empowerment project.

Yannick Mbadazi, is a 17-year-old Rwandan who helped out with promotional events, and is a walking advertisement.

YANNICK MBADAZI: It's an awesome shoe, very trendy. So when you wear it and compare yourself to other people, you can stand out from the crowd. So, oh, yeah.

(SOUNDBITE OF LAUGHTER)

BURNETT: Gideon shoes have gotten lots of free press from fashion blogs. Still, they only sell about 60 pairs a month, mainly over the Internet. The main obstacle, Noffs admits, is pricing. His leather shoes cost from $190 to $320 a pair, significantly higher than their competitors at Nike, Puma and Adidas. The reason? He chose to have them made in Australia, not China.

NOFFS: I thought I'm going to go and find an ethical factory in China.

BURNETT: On an exploratory visit to Chinese shoe factories, Matt and his brother, Rupert, saw workers with no masks using strong-smelling glue. They saw workers who looked like teenagers. And they saw grim worker housing inside factory walls.

NOFFS: At the end of the trip to China, when we got back to Sydney and we decided we would definitely under no circumstances going to produce shoes in China.

BURNETT: Which put Gideon Shoes at a competitive disadvantage. Noffs estimates that a pair of sneakers that costs $5 to make in China costs him $100 in Australia.

NOFFS: It's made it a lot tougher, it's made the road a lot harder, it's made it more expensive. And every time it looks really hard I remind myself that we made it that difficult for ourselves from the beginning and I'm proud of that.

(SOUNDBITE OF MACHINERY)

BURNETT: The shoes are produced here at J. Robbins Manufacturing in Sydney, a company that does small-batch work. On the air-conditioned production floor, Asian immigrant workers wearing face masks and gloves stand at machines stitching and gluing shoes together.

(SOUNDBITE OF MACHINERY)

BURNETT: Tony Butler is manager.

TONY BUTLER: It's more expensive to make them here because the wages in Australia, like America and most of the other developed countries, are a lot greater than third-world countries, China. Just makes it makes it very difficult to compete with overseas.

BURNETT: Noff's dilemma is not uncommon among social entrepreneurs. A business can do all the right things: fair trade, low carbon footprint, organic, biodegradable, etcetera, and it drives the price of the product up. Should the business, then, compromise on its green principles in the name of affordability to generate more profit to do more good?

Toms is probably the best known shoe company with a social purpose. When you buy a pair of Toms Shoes, they give a pair to a child in need - so far, they've donated more than two million pairs in 40 countries. Toms, based in California, has had to reconcile ends and means. A company spokesman said the factories they use in Ethiopia, Argentina and China are not certified fair trade, and that's just the reality of the cutthroat global shoe business.

Gideon is the exception. All their sneakers are made in Australia, and they make a $70 slip-on canvas shoe at a fair trade-accredited factory in Pakistan.

Is your idealism going to drive your company into the gutter?

NOFFS: Possible, and does that matter?

BURNETT: Well, yes, because it won't be a company and then it won't help anybody.

NOFFS: That's not true. Like, no matter what, Street Universities are growing, with or without Gideon. If a company dies in the pursuit of doing something good, then so be it.

(SOUNDBITE OF MUSIC AND BASKETBALL)

BURNETT: There are currently two Street Universities in Australia and two more on the way. On this afternoon, kids are listening to music and shooting baskets. During a follow-up interview, Matt Noffs sounds less like a purist and more like a businessman who's open to doing what it takes to keep his company alive.

NOFFS: Gideon Shoes is a product of Street University and it's something that is a work in progress. And one of the things that we're facing is that if we can make the shoes more affordable, get more kids wearing them and get the story out there beyond Liverpool. And I think that's where we're at right now.

BURNETT: There's a "Bad News Bears" quality to the people behind Gideon Shoes. You kind of wonder how they got this far. But they're committed to showing the world that non-corporate, nonconformists who love hip-hop and basketball can sell shoes. They just didn't realize it would be this hard.

John Burnett, NPR News.

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