The trouble with giving your child the same name as you when you have a family business, which is also the same name as your father and your grandfather and your great-grandfather, is that a certain sense of obligation descends upon him, as it did on you.
Stephen Keir V is 16 years old. His father, Stephen Keir IV, is chairman, managing director and controlling shareholder of Akubra Hats, as was Stephen Keir III, Stephen Keir II and Stephen Keir I.
Most, if not all, family business owners that I speak to for this series say they don’t want to place an obligation on their children to join the business. It’s got to be up to them, and what’s more they need to have right combination of skills. Stephen IV says the same thing about Stephen V, as well as his two other children, Laura (12) and Jessica (9).
But come on, he’s the fifth Stephen Keir! What’s he going to do? Become a journalist and work for Business Spectator? Or worse, join another hat company? I don’t think so.
But Stephen IV is taking it seriously and has signed up for a Family Business Australia course on succession planning. After all, he admits to having felt a real burden of obligation when he was his son’s age, and throughout his life: “It’s taken its toll I must say. It’s always on your mind, the obligation to keep Akubra Aussie owned.” That is, Keir family owned.
Stephen III passed away last year, leaving his son in full control, even though he, like his grandson, Stephen V, had two sisters. He didn’t do an FBA course to plan his succession, but he nevertheless managed to wrap it up pretty tightly.
Akubra Hats is owned by Skire Pty Ltd as trustee for the Keir Family Trust. Stephen III left 34 shares each in the company (that is, one-third ownership each) to his three children, Stephen, Stacey McIntyre and Nicola McLeod. These are called “A”, “B” and “C” shares, and they each have identical rights.
In addition to that he created 30 “Management Shares” to be held by his son Stephen IV. The company’s constitution specifically refers to him as the owner of those shares.
The constitution says: “the holder of Management Shares has total and unfettered right to determine all matters arising in relation to the ordinary business of such company and its day-to-day management and business operations in the normal course of business.” And then there are some exclusions or restrictions listed.
The idea was to make sure Stephen the Younger was able to manage the business without interference from his sisters and also to make sure Stacey and Nicola couldn’t sell control of the business from under him. Company secretary Roy Wilkinson told me: “Steve Snr was conscious that he could not rule from the grave but was particularly passionate that the business would retain its operation in Australia and hopefully be retained in the ownership of the Keir family.”
Steve Snr had many offers to buy the business over the years – including one from Kerry Packer – but all were turned down flat.
The question Steve IV has to work out now is whether he leaves all of his assets equally to his three children, or does he leave the Management Shares to the child he named Stephen? Interesting problem, and hopefully our friends at the FBA will able to help him sort it out.
But there’s plenty of time. Steve IV is 43 and his son is 16. Also the business has just emerged from several years of relative paralysis while the patriarch, Steve III, battled emphysema before passing away at the age of 74 in May last year, so there’s plenty of work to do with business itself.
The firm was started in 1874 in Hobart, by a young English hat maker named Benjamin Dunkerley, who was also an inventor. He invented a machine that would remove the hair-tips from rabbit fur so the under-fur could be used to make hats, a task that previously had to be done by hand.
With cheap, efficiently made hats, the business went well, and after about 30 years Dunkerley moved it to Surry Hills in Sydney. It was called Dunkerley Hat Mills and had 19 employees converting rabbits into hats.
In 1905, another young hat maker from England named Stephen Keir showed up, got a job at the factory and managed to snare Benjamin’s daughter Ada. They were married. Stephen became general manager. When Benjamin died in 1925, Stephen and Ada Keir became the owners.
The brand “Akubra”, which apparently is Aboriginal for head covering, had started to be used in 1912. Soon all the hats carried that brand and so did the company.
Stephen and Ada had two sons, Herbert and Stephen (strangely, their second son was the one called Stephen, not the first). Stephen I retired in 1952 and Herbert became managing director with Stephen II as general manager. The second Stephen eventually took over as the boss in 1972.
Herbert and Stephen each inherited 50 per cent of the business, and when it moved to Kempsey under Stephen II’s leadership in 1974, he also bought out Herbert’s two children, Ian and Helen.
So Stephen Keir once again owned 100 per cent of Akubra Hats. And once again, there were two children – Graham and Stephen III. But when Stephen II died, this time the inheritance was not equal: Graham, who had left the business and worked somewhere else for 15 years, got 15 per cent; Stephen III got 85 per cent.
And when Graham died prematurely at the age of 47 in 1987 (he was then national sales manager for Akubra) Stephen III bought his 15 per cent from his widow, Erica. Once again, Stephen Keir owned 100 per cent of the business.
Stephen IV went to boarding school in Sydney for six years then stayed in the city for a while before returning to Kempsey and joining the family firm. He had a choice, but let’s face it, not much of one. He put in seven years on the factory floor making hats, then three years cutting fur and became managing director four years ago at the age of 39, when his father became ill.
These days Akubra Hats goes through 30,000 rabbits per week. I’ll just repeat that: 30,000 rabbits per week! Makes you wonder how come there are still rabbits running around, but there are – plenty of the little buggers. The Keirs are doing their bit for the environment.
From those 1.5 million rabbits a year, Akubra makes about 150,000 hats. The company has just won an increase in its Defence Department contract from 30 to 70 per cent of the Army’s slouch hats – 12,000 hats a year for five years.
Now Steve IV is thinking about where to take the company next. Should he make other kinds of hats apart from the standard, iconic, Akubra hat? Perhaps the Akubra beret, beanie or boater? Or maybe the Akubra fedora, fez or flat cap?
Hmmm. Hard to imagine that. Steve IV says he needs to be very careful with the brand and not stuff things up.
After all, his name is Stephen Keir.
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