Akubra company secretary Roy Wilkinson says one of the issues with the Akubra is that people perceive it to be something worn by older people who live in the country. "But hats are coming back in fashion, especially among the young," he says. "[The singer] Pharrell Williams is known for his hats and we gave him an Akubra when he visited Australia, as we do many celebrities."

Wilkinson says one issue behind a lack of take-up among the non-rural market is that people don't perceive the Akubra to be a fashion hat. "But up until the 1920s we were known for making fashion hats, such as fedoras," he says.

While no one knows for sure, Akubra is apparently an Aboriginal word for head covering. The name was patented in 1912 and now more than 100 styles of Akubras in various colours are sold. About 140,000 to 180,000 Akubras are sold every year, including "bucket loads" in Melbourne around Melbourne Cup time.

According to IBISWorld, the clothing retailing industry has faced several tough years. Over the five years through 2013-14, industry revenue is expected to contract at a compound annual rate of 0.9 per cent. Its Clothing Retailing in Australia report says cautious consumer spending and intense competition are factors. Some of Akubra Hats' competitors include bush-hat manufacturers such as Jacaru and Barmah.

Staying relevant is a constant battle for the fifth-generation, 130-year-old company, says Wilkinson. "We've gone through peaks and troughs," he says. "Business was good in the early days because everyone wore hats, but when you get to the 1970s people became more casual and hats weren't worn as much."

Over the years, many factors have had an impact on the business including drought, interest rates, fashion trends, retail spending and internal tourism. In the 1970s, the company moved from Sydney to Kempsey on the NSW mid-north coast after the government began offering decentralisation packages.

"Apart from regional Australia, sales had dried up and it was touch and go as to whether we would survive," Wilkinson says. "But then in the mid-1980s, golfer Greg Norman came along and we approached him to support our hats, which he agreed to."

Wilkinson says after the agreement with Norman, the company couldn't keep up with demand. "International markets also exploded because of Norman's profile overseas, especially in the US as they are big wearers of hats," he says.

The relationship with Norman lasted around 15 years, then as things began to slow down Wilkinson said the company began channelling its efforts into developing overseas markets, particularly in Asia.

"Our sales in regional areas are always fairly constant," Wilkinson says. "Overseas will be where our growth comes from and Asia is our boom market and growing rapidly. Five years ago our biggest markets were the US or Germany but now China and Tibet have overtaken them."

The export market comprises 15 per cent of total sales (five years ago it was 8 per cent). "There are still a few markets we haven't tapped into, such as Russia and India," Wilkinson says. "And we have no product in South America, so that's also a target."

Akubra employs 90 people and all hats are made in Kempsey, although a line of Akubra belts is manufactured in Brisbane. Wilkinson says as well as targeting overseas markets, diversifying the range was viewed as crucial for survival. The company has since entered into a licensing arrangement with clothing and promotions company DKM Blue for a new range of branded luggage and accessories.

"We realised that people like the Akubra brand and want to support it but not everyone likes wearing hats," Wilkinson says. "So now we can offer them wallets, bags, iPod covers or other goods that carry our name."

Akubra continues to be focused on keeping its hat-manufacturing operations in Australia – an aim that was becoming difficult to do.

"Manufacturing in Australia is very expensive and there is a lot of regulation," Wilkinson says. "It would be cheaper to make all our products overseas but we don't want to. The products made under our new licensing arrangement will be made overseas and the income from this will hopefully ensure we continue to keep making our hats in Australia well into the future."