Inspiring Stories of Our Owners

New Owners Brought a New Era to This Hawaiian Footwear Company

July 20, 2021
6 min read

For three decades, Kiani Wong watched as family friends Mich and Dorothy Aach built and ran their own footwear company. So when the Aachs started to contemplate retirement a few years ago, the former retail buyer had an idea: Why not purchase the business and run it herself?

Today Wong is the proud owner of that business, Kaka’ako Kasuals. Based in Honolulu, the company creates and sells sandals reflective of the community identity on the islands.

Hello Alice chatted with Wong about everything it takes to purchase a business, what the post-pandemic tourism boom has been like, and how embracing authenticity has set her brand apart. The following conversation has been lightly edited for length and clarity.

We love the backstory of you buying the business from family friends. What do you think someone should know when they’re thinking about purchasing an existing business?

There are so many things. With our situation, it was more, ‘Do we have the pieces to kind of make this little puzzle work for us?’ I had a lot of experience in retail buying and wholesale purchasing. Then we had other family members who were very skilled in marketing, operations, and accounting. So we had the foundations, and having that going in is super helpful. If you don’t, it can be really hard to find those things to make it all work.

Also, we saw a lot of promise in the future of this business. This is a tourism-oriented space right now, but we saw so much potential to where we could grow the business into things that were more culturally relevant and exciting for different generations. Obviously evaluating the financial aspects of it and doing your due diligence is really important, but there’s a lot to be said about seeing that trajectory of your business over the next five, 10, or 20 years.

What did you learn during that period of due diligence before purchasing the business?

So much. For me, I was lucky enough to spend an entire year with the previous owners shadowing them. And so during that due diligence process, we were looking at finances, looking at whether they had enough working capital, looking if they have a good turnover ratio — these things were really important to know. But due diligence doesn’t just include financial aspects and things like that. It also includes a lot of intangibles that you can’t see from the balance sheet or a profit and loss statement. That shadowing experience really solidified that we were making the right decision.

Were you ever afraid of upsetting the previous owners by going in a different direction?

There was a little bit of that at first, but that stopped once I started talking to them about the awesome ideas that my family and I had come up with. I really tried to pick their brain and say, ‘Okay, if you had the opportunity to reinvent your business or do things that you’ve always wanted to do but never had the time to do, what would you have done?’ They were really forthcoming with me. They told me that they would have used this technology, they would have introduced this product, or they would have looked at this one revenue stream. At that point, it was really easy for me to start thinking out loud and having these open discussions about what my visions were for the company and where we were interested in taking it. The previous owner is actually one of our sales reps, so he still comes in all the time, and we have a great relationship. If it wasn’t a supportive situation, it would have been a little more difficult to change the trajectory of our business.

You’ve spoken elsewhere about your choice to use a dedicated accounting partner to help you with your business financials. Why did you go that direction instead of relying solely on an off-the-shelf software solution?

We needed something that was going to be able to help us really track our inventory and expenses in a more granular way. When we took over the business, it was still in a good place, but it was on a more of a downward trajectory. We wanted to turn that around. We needed somebody in our corner to be able to consistently give us guidance and feedback about the things that we needed to do to really fine-tune the business for long-term growth. If you find the right partner, it can be a really good relationship that can help your business turn around.

We could have just gone and found a QuickBooks adviser, and that would have been fine. But that person isn’t necessarily somebody that can help us with long-term growth; it’s more of a quick planning session. We were figuring out how to position our business so that we’re cutting certain costs and then incrementally shift things around so we can change course. That kind of planning was what we were looking for, which is why we wanted an ongoing relationship.

Kiani Wong

Hawai’i is experiencing a huge, huge tourism boom after the pandemic drought. How are you making the most of that?

That transition from zero to 1,000% has been amazing but absolutely insane at the same time. Last year, we pretty much shut down tourism during the pandemic. Locally, we understood why, but it really hurt the tourism segment of our business. It’s a little bit jarring because we went from nothing to selling so quickly that we can’t keep some of our top sellers in stock. Right now, it’s really trying to manage our existing inventory levels and our access to capital so that we can fund ways where we can grow again. To put it another way, it feels like the paddles were on our heart — a total jumpstart. That’s been fun but kind of crazy.

Going forward, are you targeting more of an e-commerce presence, or are your retail partners still going to be your bread and butter?

Moving into this year, we’re trying to shift a bit more of a balance between e-commerce and our B2B. You know, B2B was our bread and butter for over 30 years, but there’s a huge opportunity, especially for a local Hawaiian company, to come in and really pursue this as a direct-to-consumer brand. During the pandemic, our sales shot up direct to consumers through e-commerce because they weren’t able to buy us in the stores.

This year we’re actually launching a crowdfunding campaign to create a product that we’ve already been testing. It’s really cool — we’re using algae in our soles to replace petroleum. Going forward, we’re trying to shift away from the low-cost provider that we traditionally were and embrace sustainability.

You’ve been working with different artists for different designs. How do you develop new colorways and those partnerships?

I’m not sure if you’re too familiar with areas of Oʻahu, but Kaka’ako is actually a small section of the island. This area is has been known for a long time as very industrial, and within the last 10 to 15 years, it’s kind of changed. There are huge murals all over the buildings around Kaka’ako so that pretty much if you walk on any street, you’re gonna see amazing art from local and international artists. We wanted to reflect that feeling in our slippers. So far, we have partnered with two artists who have done murals in the area to create unique artwork for our footwear. It’s really exciting because these people have given us different perspectives. While we understand color trends and things like that, they get to do amazing things with their art.

As a Native Hawaiian, how are you trying to integrate your identity into the brand?

Everything we’ve done from the very start of our business has been trying to integrate that aspect of ourselves. We’ve been trying to align the outward face of our brand with our internal values as a family, as Native Hawaiians, as a woman-owned, queer-owned business. We’re trying to bring a lot of these things that are generally in the background of a lot of brands to the forefront. The sustainability aspect, for instance — that’s a personal value that we have. Naming our company Kaka’ako Kasuals is giving it a location in Hawaii, as opposed to just any other footwear brand. We’ve used primarily Native Hawaiian artists in our products. Also, renaming styles to the street names of Kaka’ako was really important to us because that gave us even more value here to say that we are from here, we’re local.

Do you see yourself growing the business over the long term, or is the business something you hope to sell to another person one day?

In my family, there’s a long history of running family businesses. I would hope that eventually, somebody in our family would want to continue it, but sometimes the kids in the next generation don’t want to buy the business, or they don’t want to work in it anymore. If Nike comes calling, I wouldn’t necessarily say no! But for now, we plan to build and grow the business and hopefully pass it down to somebody who cares. Whether that’s family or not is yet to be determined.

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