Shoe brand Keen is opening a new US factory while still holding prices steady
Keen, a footwear brand known for its work boots, is stepping up its commitment to manufacturing in the U.S. amid the ongoing trade war.
The Oregon-based brand will be opening a new factory in Kentucky in June that will replace its current factory in Portland. Keen started planning the move last year, long before current tariffs were in place. But the timing couldn’t have been better. Keen’s new U.S. facility will be larger than its old one, allowing it to meet heightened demand for local manufacturing and avoid the burden of some additional tariffs.
Keen, which was founded in 2003, manufactures all over the world. Since last month, it’s been paying a universal 10% tariff to bring in non-U.S. goods. But, in a silver lining for the brand, Keen owns 33% of its production; one out of every three pairs of its shoes comes from its factories in the U.S., the Dominican Republic and Thailand. “[That] gives us this rare level of control,” Keen’s COO, Hari Perumal, told Modern Retail. The rest of Keen’s shoes — the other 66% — are manufactured through partners in Cambodia, Vietnam and India.
Right now, approximately 5% of Keen’s production output comes from the U.S., specifically. It aims to bring this up to 9% with the opening of the larger Kentucky factory. Even with these changes, Keen will maintain its headquarters in Portland, and it will keep prices the same. On May 6, it sent an email to its customers and vendors committing to no price increases for the rest of 2025. “By holding our prices steady, we aim to help you maintain strong consumer relationships and continue delivering the value and quality people expect from Keen,” the letter reads.
Keen’s Perumal spoke with Modern Retail about opening a new factory, navigating global tariffs and catering to customers’ concerns at this time. This interview has been edited for length and clarity.
Why are you opening a new factory now, and how did you settle on Kentucky?
“We are expanding our U.S. manufacturing footprint, not as a reaction to market pressures, but as part of our strategy we began more than 10 years ago. We opened our first factory in Portland, Oregon in 2010, and that early move wasn’t about volume. It was about values, proximity, quality and accountability. Today, we’re building on that foundation with a new facility in Shepherdsville, Kentucky.
Around 5% of our production comes from the U.S., and it’s primarily work boots, what we call utility products. We are expanding [production in the U.S.] to outdoor products and, possibly, the running category. … Once operational, the Kentucky facility will be capable of producing up to 9% of our U.S. sales. More importantly, it will allow us to be faster, more responsive and closer to the market, reaching 80% of American consumers within two days by ground shipping.
This is a major win, not only for logistics, but also for reducing our carbon footprint and increasing our operational agility. The factory is right next to our distribution center [in Kentucky], and we’ll also be closer to our vendors and suppliers for polyurethane. … And, we can find a good workforce in Kentucky. It’s not that we couldn’t find one here in Portland, but there’s a manufacturing base there, and there’s a ton of warehouse space [in Kentucky]. There are a ton of production workers available. All of this makes it a little bit better for us.”
What made you confident that you could say, ‘We won’t raise prices for the rest of 2025?’
“It’s our values. … More than 20 years ago, when the Asian tsunami hit, Keen took our entire marketing budget of $1 million and donated it to the recovery efforts. … When Covid started, we sent a letter to our retailers, telling them to pay us last if that would help them. After that, when container prices went through the roof and then normalized and came down, most of the brands and retailers — not only in footwear, but across all other products, as well — were holding onto the prices and inflation was crazy. But we went out and told the retailers that we were lowering the prices. So, this is nothing new, and we’re doing it again. We are a privately-held, values-led company, and that enables us to make decisions differently.”
How have you been able to afford this, when you are still dealing with tariffs outside of the U.S.?
“At this point, we have zero exposure in China. That helps, for sure, but there is a 10% tariff that we have pretty much across all countries where we are manufacturing. So, the way we absorb this is through upstream value chain efficiency. What does that mean? The footwear-producing factory will share some of those burdens. And then the tier-one vendor that supplies to the footwear factory will share some of those in their material costs. A tier-two vendor that supplies to tier-one will absorb some of those costs. We have these long-term partnerships that we have developed over a very long time that enable us to share this cost upstream, so we don’t have to pass this onto our fans. … It comes down to preparation, partnership and control. Because we have built a very highly-diversified supply chain, it gives us more options and more leverage.”
How have customers reacted to you saying you’ll keep prices steady? Have you seen your sales go up since the announcement?
“If you look at some of the social accounts for Keen, you will get a sense of what kind of joy it brings our partners and fans. … There has been a lot of anxiety, to be fair. People were going ahead and purchasing a lot of these things ahead of time, before the tariffs went up. We saw a surge in retail sales in March. But at Keen, we’re holding the line. The business is pretty steady for us, while other brands are pulling back. … This is definitely not a play for us to go and increase our sales or market share. But I do believe [our performance] may be a byproduct of, ‘Wow, Keen shows up,’ which is welcome news.”
What has customer sentiment been like, more broadly, this year?
“Consumers are becoming much more thoughtful and value-driven in their purchasing decisions, with this uncertainty around tariffs. … There is a study by Alix Partners which found that nearly eight in 10 consumers [78%] walked away from a footwear purchase [in 2025] because of the price, and almost half of them are prioritizing essentials over discretionary items. At Keen, we are feeling that shift directly. Our fans are gravitating toward essential, full-price products, including the ones made here in the U.S. Because we made the decision to diversify our supply chain, we have been able to manage these costs better and avoid passing them on.”