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FORECAST 2013
INSIDE THE
HEARTS,
MINDS &
WALLETS
OF TODAY’S
RUNNERS
Jul/Aug
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• Comfort
• Insoles
store, True Runner, to target the running consumer. Finish Line
I
By Jim Dion
has formed a joint venture with Gart Capital Partners and has
already rolled up 25 run specialty stores, including the highly
regarded Run On! in Dallas. And Internet sellers love targeting
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Consumers ages 45-plus
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some of my customer encounters
runners make of all this attention and craven desire for theirover the years. But I do have to
admit, my son, with a degree in
Criminology, now a buyer for
wallets? We asked them. In a survey of about 1000 dedicated
Target, may have trumped my
background choice!
runners nationwide, conducted exclusively for Formula4 Media
I would like to spend the next
few pages with you by giving you
by Leisure Trends Group, we learned plenty. For this study, we
some insights into the consumer
that we see everyday in our
wanted real runners, so The Competitor Group, publishers of
stores, hear in our call centers
and observe on our main and
Competitor magazine and owners of the Rock’N Roll Marathon
mobile web sites. Sigmund Freud
asked over 85 years ago, “What
series of races, supplied us with a list that allowed us to obtain
does a woman want”? And he
went to his grave with no answer!
967 responses nationwide from individuals who run at leastI 10
am not sure that I will give you
a complete answer to what the
miles or three times a week. Respondents also had to haveconsumer in 2012 wants, but I am
confident that I will come a lot
purchased shoes, apparel and accessories in the last year and
closer than Freud.
First, I want to discuss
consumer wants and expectations
most recently at a run specialty store.
which, as everyone in the world
of retail already knows, are very
different than they were even ten
years ago, and in many cases very
different from even 12 months
This study breaks runners into three groups:
ago. Then, I want to touch on
High Frequency: 25-plus miles a week
the dangerous and brave new
world of deals that are destroying
Medium Frequency: 16-24 miles a week
retail, as we know it. This, along
Low Frequency: 1-15 miles a week
with some insights that I want
to share into a very interesting
psychological phenomenon know
as habituation that may both
enlighten and frighten you at the
are particularly likely to belong to a running club/group.
same time and then close with a
tip on merchandise presentation
and the human brain.
November/December 2012 ~ Footwear Insight • 29
Let me begin with some
observations about the changes
we have seen in the past four very
difficult years.
You have to realize that less
money in the consumer’s pockets
does not mean that they have
fewer needs, desires or lower
expectations. In fact, consumer
expectations and desires have
Jim Dion
been growing steadily over
the past 50 years and even the
recession has not lowered them.
Our customers want greater
service, bigger cars, bigger
homes as well as new toys and
technology every year more and
more whether they can afford
these or not.
As well you need to understand
that in America today, there is no
rising tide, no growing economy,
no great influx of immigrants or
even tourists to fuel huge sales
increases. This means that for
every winning store there will
be a loser. Smart companies are
thinking share of the consumer’s
wallet, not share of their own
market. Consumers are trading
one product or service for another
today and in some cases making
some difficult choices. In many
markets we are likely competing
for that consumer dollar against
a romantic dinner, a Caribbean
vacation or a new iPad.
Our customers are also
increasingly noticing the
deterioration of the Brick & Mortar
experience and they are not happy
about it. As I like to point out, 15
years ago we were obsessed with
making our web sites look like
real stores. Now, I believe we had
better be even more obsessed with
making our stores work as well as
our web sites.
What If I asked you to buy a
kitchen broom on the web, how
long would it take you? About 60
seconds or less if you are using
Amazon.com one click function.
Now, if I dropped you off in
front of Home Depot or Lowes
and asked you to buy the same
kitchen broom, how long would
it take you? 10 minutes to find it,
then 15 minutes waiting in line
behind a contractor to pay for it.
The answer speaks volumes for
the work ahead of us.
You see, the bar keeps getting
raised by excellent companies.
Think Amazon, Ritz-Carlton,
Apple, Costco and quite a few
others. What earned you a 10 out
of 10 in the consumer’s mind last
year may only earn you a 7 this
year. Competition is relentless
and remember, as we will see in a
moment, competition is everyone
that is offering any product
or service to your customer
(remember the share of wallet
idea that I spoke of just a few
minutes ago?).
Increasingly, the customer is in
the driver’s seat and empowered
by mobile and social media and
they are not afraid to flex their
newfound power. They will scan
items right in the store and then
put the phone screen right in the
sales associate’s face with a lower
price showing and demanding that
the price be met. I am sure you
have seen quite a few customers
come in, get fitted or examine
a product, and then not even
wait to leave the store before
they were purchasing it on their
phones. We all know that this is
called ‘showrooming’ and many
retailers are fighting back by
enlisting the help of the supplier
community to stop discounting
24 • Footwear Insight ~ July/August 2012
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AS GOOD AS THE BEAVERTON BULLS HAVE BEEN AT SELLING
Nike CEO Mark Parker, after the company’s most recent earnings beat
Wall Street estimates.
“In North America, we created great momentum. This is somewhat
counterintuitive to some, given this market size and assumed maturity.
But I see tremendous growth potential in North America,” Parker said in a
call with analysts. That is akin to the admiral of the British Navy in 1588
saying “We did well against the Spanish Armada, but the next time we’re
in battle, we’re really going to kick some ass.”
Yes, Nike is doing great, but will do even better in 2013. Their product
development is well ahead of their major competitors and their marketing
and sales strategies are precise and focused. Nike is in a rare form of
overdrive and is playing a game of three dimensional chess, while most
other big companies are playing checkers. What is largely unspoken is
how good Nike is at creating and selling product at $80 and under. That
puts incredible pressure on every brand that makes athletic footwear,
including skate shoe companies and bounce-back brands like Fila that can
do a lot of business at those price points if given half a chance.
Execs at the big mall retailers say they want to see another brand rise
up and become meaningful, but when Nike is rolling like this they roll
their eyes and keep sending the orders to Beaverton. While footwear is
driving Nike’s success, the brand is leading the way in other categories,
as well. Nike’s FuelBand is one of the best uses of digital technology the
industry has ever seen and for 2013 Nike will introduce a women’s apparel
initiative designed to help sports retailers compete with Lululemon. l
athletic footwear, they were almost that bad selling comfort, casual
and dress shoes with Cole Haan. That will no longer be a problem
for them as early this year Apax Partners will close on the purchase
of Cole Haan from Nike for $570 million.
In the fiscal year ended May 31, 2012, Cole Haan increased
revenue 2.7 percent to $535 million. That made up 2.2 percent
of Nike’s $24.1 billion in total sales. The unit has 178 stores,
including 109 in the U.S.
The sales of Cole Haan and Umbro (which sold to Iconix last fall
for $225 million) come after the units had a combined loss of $43
million before interest and taxes in fiscal 2012 and were projected
to lose as much as $75 million for fiscal 2013, Nike executives said.
Nike made some great product under the Cole Haan label,
especially in men’s, but never figured out a distribution strategy
that could include major stores like Nordstrom, its own branded
stores, the Internet and key independents. Under Nike, much of
Cole Haan’s line was priced at $250 and above, which is pricy for
a brand whose sweet spot is comfort casual. With Apax and former
Converse exec Jack Boys running things, Cole Haan will do a better
job with retail segmentation than Nike and also get the bulk of the
line into healthy but affordable prices. Apax has a solid track record
with fashion brands such as Tommy Hilfiger and Tommy Bahama,
so the bet here is not if the investment group can manage Cole
Haan to brighter days, but how long it will take. l
Crowdfunding
to the Rescue
What if you could
get free money for
your business?
By Emma Johnson
That is exactly what hundreds of thousands of companies are doing through the growing popularity of
crowdfunding sites like KickStarter and IndieGogo — social media portals where virtually anyone can
plug in info about their project or organization and raise any sum of money. “These can be a great way
to launch a new product by marrying the powers of social media with the traditional ways of launching
new products,” says Michael Harrington, a partner at Fox Rothschild, where he serves as an advisor to
entrepreneurs and speaks frequently on the value and risk of crowdfunding. “But this is a developing
world, and in my experience the true successes are few and far between.”
January/February 2013 ~ Footwear Insight • 35
These sites work like this:
reate an account and
campaign, ideally
featuring a story
line about your
organization, yourself and your
product. Establish a dollarspecific goal. For most sites,
donation sums are attached
C
to reward gifts. For example,
donate $200 to an independent
film project and receive a poster
of the movie signed by the
cast. Then the business owner
promotes the campaign with
the aim of meeting or exceeding
the set goal. If the goal is met,
the business gets 100 percent
of donations. If they’re shy
of even $1, they get zip. The
sites typically charge about five
percent of funds raised.
Andy Krasfur’s 10-year-old
running shoe line, Spira, got
a boost from a crowdfunding
campaign on the site RocketHub.
Between July and October of
2012 raised $35,000 to launch
a line of his spring-technology
shoes. While it may seem that
donors are altruistically giving
away money in support of a
cool business, they are really
preordering a pair of shoes
in exchange for $70, Krasfur
explains. “I really just sold 600
20 • Footwear Insight ~ November/December 2012
footwearinsight.com
footwearinsight.com
By Emma Johnson
serving a broader market. “Run
DMC was being sponsored by
Adidas, Air Jordans were becoming
iconic and MTV videos were
changing everything,” Bowden
says. “There was a lot of cash
being spent, but there was a lack of
distribution outside inner city kids.”
So Downtown Locker Room was
born in a storefront in the popular
shopping and nightlife district of
Lexington Market, Baltimore. “We
changed the name to DTLR because
it is more of a lifestyle brand
now, but we still serve the same
demographic,” Bowden says. “But
we also serve the fashion movers
and shakers in the Latino, suburban
white, sneaker head demographics.”
Indeed, in its 30 years, DTLR has
exploded to 85 stores in markets
D
TLR was hip-hop
before hip-hop
was for white
suburban kids.
The first store
was opened in
downtown Baltimore in 1983 by
two local businessmen, one who
owned a liquor store and another
who ran a drycleaners. Rick Levin
and Tony Trantas collaborated on
a suburban running shoe store,
but soon noticed the music and
entertainment industries were
starting to dominate fashion. The
inner city urban male population
was being well served, says Jeff
Bowden, head of marketing for
DTLR, but the pair saw an opening
that include Chicago, St. Louis,
Washington, D.C., Virginia, North
Carolina and South Carolina,
Atlanta and Florida. It aims to open
15 new stores each year for the
next five years. “We target different
demographics with different
properties,” Bowden says. “Our
expansion plan is to go where the
customers are.” DTLR aims to keep
a 50-50 split between mall and
street front stores.
Customer service is key
DTLR customers are loyal,
frequenting stores between three
and four times monthly on average,
Bowden says. The company
recognizes that the bulk of its
product mix is not what drives foot
traffic, as most of their key brands
RETAIL | GLOBE SHOES
One year after
undergoing a
management
buyout,
Fleet Feet, Inc.
is running hard
after growth.
DTLR: A True Original
Explosive National Growth by Being Truly Local
Story by Mark Sullivan / When Manhattan’s Harrys Shoes planned its
expansion a little more than a year ago, Robert Goldberg and his sister Randi
wanted to do more than make the store bigger. They wanted to create a 21st
Century footwear store: one that combined the caring service of the store in
which they grew up. But also a store that would offer a compelling selection of
merchandise, purchased and displayed around the taste
level of a demanding and sophisticated consumer base.
Six months after the grand re-opening, industry pundits
would say they’ve succeeded on all fronts. “This store
is fantastic,” says Bruce Munro, the president of Munro
Shoes and one of more than 100 vendors to Harrys.
“I can see consumers driving hours to get here and shop.”
Harrys has always drawn consumers from the tri-state
area, but in the complex social geography of Manhattan
– where longtime residents don’t leave their neighborhoods except to go to work – it was important to the Goldbergs that they offer
a store that would appeal to residents of the Upper West Side, where Robert
lives (and where the store is located) and the East Side where sister Randi
lives. The goal was to “get younger” and in the process “more elegant and
ophisticated,” according to Robert, who said before the re-model the average
age of the shopper was about 50. “The average age in the country is 51, so
we weren’t far off from that,” Robert explains, “but the store felt stodgy to us.”
footwearinsight.com
Fleet Afoot and Still Growing
RETAIL
Around the
Globe in
60 Years
are readily found at neighboring
chain and big-box stores.
These include Nike, Converse,
Timberland, Trukfit, Levi’s, UGG,
Sorel, Tommy Hilfiger, Mitchell &
Ness, A.K.O.O. and Rocawear.
Instead, DTLR aims to
differentiate itself through customer
service, unique marketing, and
staying ahead of the fashion curve.
“The customer that walks into
our stores doesn’t get treated well
in other stores a lot of times,”
Bowden says. “We need to make
sure that they feel comfortable in
our stores. We want our stores to
be where they can hang out and
form relationships. We want to be
Cheers, where everybody knows
your name — but also your shoe
size, and to tell you what new
By David Chmiel
R
By Mark Sullivan
I
t’s a rainy Spring day outside the
headquarters of Fleet Feet, Inc. in
Carrboro, NC, but inside CEO Jeff
Phillips has a sunny disposition. And
why shouldn’t he? Fleet Feet has just
opened its 100th store (in Mount
Pleasant, SC) and is celebrating the oneyear anniversary of its management buyout
in conjunction with Investors Management
Corp., the privately owned parent company of
the Golden Corral restaurants and Biologics,
an oncology management company.
For Phillips, the buyout of long-time friend
and former Fleet Feet CEO Tom Raynor
capped two years of meetings with lawyers,
bankers, trusts and valuation experts. But
The Harrys Team:
Sister and brother
Randi and Robert
Goldberg.
with that behind him, he says he’s ready to
concentrate on growing Fleet Feet in a market
that he says is flush with opportunities.
“For two years, I was bolted to my desk,”
says Phillips, 51, of the negotiations that
closed on May 31, 2012. “I didn’t really like
that. I enjoy working with franchisees and
supporting them to grow their businesses.”
While Phillips spent most of the past two
years with lawyers and accountants, the run
specialty market was undergoing dramatic
changes. The joint venture between Gart
Capital and Finish Line had gobbled up more
than 20 running specialty stores, including
the highly regarded Run On! group of five
stores in Texas. Other smaller groups, such
as Peak Performance in Nebraska and Sure
Foot in Utah, also bought stores. And Dick’s
14 • Footwear Insight ~ May/June 2013
Sporting Goods and Foot Locker opened their
own running stores. Internet players such
as Amazon and Runner’s Warehouse have
become much stronger players. And catalog
giant Road Runner Sports now has more than
20 stores of its own.
The modern run specialty business that
Phillips and Raynor had played major roles
in shaping during their time together at Fleet
Feet has become mighty crowded. But if
Phillips is sweating, he’s not showing it.
“I tell every candidate I meet who’s
interested in opening a Fleet Feet store that if
we open them as a franchisee that they will
face incredible competition,” Phillips says.
“Within a 10-mile radius of their store, the
consumer will be able to buy everything they
carry somewhere else.”
footwearinsight.com
March/April
arch/April 2013 ~ Footwear Insight • 23
oute 17 South in
Paramus, NJ, is a
little slice of mayhem.
Too many cars, too
many malls, too
few turn signals, all speeding by
in a 21st-century video game of
consumerism.
From behind the wheel,
the Garden State Plaza – a
2,118,718-square-foot beacon of bigbox-and-boutique retail hope – rises
like a small city in the distance,
ready to cost you more than a lost
weekend in Vegas.
Meanwhile, in a non-descript lowslung building just north of the mall,
an achy UPS man pops a couple of
Aleve after dropping off a massive
shipment of boxes to Globe Shoes.
“Yeah, that was about 1000 pairs,”
says Bobby Adler, general manager
and men’s buyer at Globe. “We
make a living on what walks out
of the malls. They are dissatisfied
with that experience. We size their
feet, we ask them what they want
and what they need. We sit down
in front of customers, put the shoes
on their feet. Customers are stunned.
Now we’ve given them a reason to
come back. We deliver.”
Globe Shoes has given consumers
a reason to come back for 60 years,
delivering old-school service and feel
in a location that boasts its standing
as “Home of America’s Favorite
Comfort Shoes.”
A Family Tradition
The store remains owned by
the second generation of the Sude
footwearinsight.com
92 • Footwear Insight ~ May/June 2013
family. In 1953, Irwin and Shirley
Sude opened the store — on 17
North, directly across from its
present location. Shirley’s parents
owned a store, also called Globe,
in Jersey City. It was more of a
department store and even sold kids’
shoes, which the Paramus store,
originally called Globe Western
Boots, has never even dabbled in.
The young couple decided to branch
out to the burbs and opened the
store the same year that their oldest
son, Gary, was born.
As Adler discusses the past,
present and future of Globe and its
customers, Frankie Valli and the
Four Seasons, Diana Ross, Sam
Cooke and Fabian provide the
soundtrack for a clientele and sales
staff that has grown up together.
If the ever-present soundtrack
could be updated by a few decades,
U2’s “I Still Haven’t Found What I’m
Looking For” should earn a spot in
the regular rotation.
“We’re a destination store,” says
manager Anthony Torre. “We have
people who moved away and will
make us their first stop right out
of the airport. They can’t find the
sizes and styles that they need
wherever they live, so they plan
their trip around buying shoes. We
know them by name, have exactly
what they need and treat them like
family. They bring their kids and
say, ‘I came with my mom when she
bought shoes and now I bring you
here to get what I need.’”
Consumers get what they need
because Globe’s selling floor is
about 4500-square feet. Its stock
room, however, takes up most of
the 14,000-square feet of backroom
space. The store stocks more than
75,000 pairs of shoes — sturdy,
comfortable shoes in brands, old
and new, dedicated more to fit than
flash. Johnston & Murphy, Rockport,
Hush Puppies, New Balance, Sperry,
Ecco and Clark are among the men’s
brands, with Ara, Munro, Trotters,
Ros Hommerson, Walking Cradles,
SAS, Propet, Orthaheel, Aravon and
UGGs, for women.
“Except for the seasonal styles,
where we hope we order correctly,
we sell a pair and fill a pair,” Adler
says. “Get ’em in and get ’em
out.” Simple premise for a fairly
challenging demographic: Men’s
sizes from 6 to 20 — and widths of
A to 6E. Globe stocks women’s sizes
4 to 13, 2A to EE.
Torre has worked at Globe
for 20 years. The store manager
is not even close to being the
longest-tenured employee. Office
manager and women’s buyer
Lauren Silvestri has been a Globe
employee for 32 years, starting by
working the cash register before
growing into her new positions.
Adler, Torre and Silvestri make
up the team that carries on the
traditions started by the Sude family.
Adler, who’s been in the shoe
business for 41 years, has only
been at Globe for six years. He
credits the pair with providing the
institutional knowledge that helps
drive the store to embrace its core
business while also taking chances
on newer styles and trends.
“Yeah, he’s a newbie,” Silvestri
and Torre joke. But they all are
serious about what the Sude family
Store manager Anthony Torre (top)
has worked at Globe Shoes for
20 years. Customer service is a
priority at the store, helping to make
Globe what Torre describes as “a
destination store” for many of its
long-standing customers.
September/October 2013 ~ Footwear Insight • 33
footwearinsight.com
NS GH S
JULY/AUGUST 2013 • A FORMULA4 MEDIA PUBLICATION
SELLING TIPS
THECOMFORT
ZONE
Sleek styles, from the
runway and the running
track, bring in the fashion,
bright colors bring on the
fun while footbeds and other
high-tech techniques and
materials bring out the best in
overarching comfort.
“Comfort is the best
category to be in in this
economic climate,” says Evan
Schwartz, president of Aetrex
Worldwide. “People want
more than only athletic shoes;
they want to put on a heel
that feels like a running shoe.”
The idea of an all-around
shoe, says Steve Lax,
president of Yaleet Inc./
Naot Footwear, which has
introduced a knee-high boot
that wearers can run in, is
breaking barriers both ways,
with “comfort companies
becoming more fashionable
and fashionable companies
going more for comfort.”
Terry Stillman, CEO of
Novascarpa Group/Joya
USA, says that consumers
are “looking for affordable
comfortable lifestyle footwear,
something that doesn’t look
orthopedic but still offers
incredible comfort.”
And they don’t have to look
far to find footwear that fuses
fashion and function because
virtually every brand of
comfort shoe is breaking out
of the orthopedic-shoe box
to create footwear that can
be worn everywhere from the
beach to the ballroom.
Naot’s Luma, a basic black
madras leather dress-up/
dress-down pump accented
with black crinkle patent
leather, features an anatomic,
removable footbed that lives
harmoniously with a 2 ¾-high
polyurethane sole designed a
specific angle to give the look
of a heel without the feel. “It
doesn’t put any stress on your
back,” Lax says. “Nobody else
has been able to do this.”
And Mephisto’ Basilia and
Waldlaufer USA’s Hadya
Ballet, Roman Holiday
Audrey Hepburn-style flats
with removable footbeds,
are fashionably comfortable
in their own high-tech
skins. Mephisto’s has
Soft-Air technology while
Waldlaufer’s features a full
leather lining and a flexible,
lightweight outsole.
“Customers have learned
that a shoe doesn’t need
to be heavy or bulky to be
supportive,” says Waldlaufer
President Holden Nagelberg.
“Having the ability to
be nimble in terms of
updating products with new
components and styling is
critical in today’s market.”
This new, daring breed
of comfort shoes that
goes everything and does
everything comes in smart
new colors. “Consumers want
easy, fun, colorful styles that
are easy to match with the
clothes in their closets,” says
Dansko Creative Director
Ann Dittrich, adding that
the Sedona Elise in blue is a
prime example of the brand’s
“easy, clean and sporty styles
that can be worn with pants,
shorts or even a sundress.”
Alegria’s Violet sandal
takes the color story to the
wildflower side with a pretty
print that is representative
of what Leon Hill, West Coast
sales rep, says is the brand’s
commitment to “fun custom
colors and prints to suit
every customer and mood.”
And Birki’s new outdoor
trekking collection for men,
women and children features
lightweight neoprene mesh
uppers in casual, beachgoing colors that include
orange and green.
Birkenstock’s Granada Soft
Footbed collection offers a
variety of colors, including
turquoise, to appeal to a wide
footwearinsight.com
AGIANT
STEP
ENGAGE, SERVE
AND EVOLVE.
3 SALES KEYS.
THE TECHNOLOGY
TRENDS ARE
SHIFTING.
WHAT IS NEXT?
The Retailers’ Guide to
Selling Running Shoes
JULY/AUGUST 2012 • A SPECIAL REPORT TO FOOTWEAR INSIGHT
THE BOOT BOOK
By Cregg Weinmann The running shoe world has been on a roller coaster ride for the past three years. Much of the conventional thinking was
challenged and the result was a coalescing of new brands, new products and a new paradigm that released some ideas about materials and design
that have literally reshaped the modern running shoe. Scientists continue to study the nuances of how we run and how better shoes can be made to
enhance the experience of running. However it all starts with selling shoes and that requires an understanding of the shoes and the fitting methods.
SPECIAL
SECTION
JOB DONE
GUARANTEED
Women’s
Comfort
InStyle
By Nancy A. Ruhling
If the latest lines are any
indication, women’s comfort
shoes are getting much more
comfortable in style. It’s not just
that their heels are getting higher
and they’ve stopped looking like
ladies of a certain age. They are
pushing the design envelope
with luxurious materials and
high-tech features in response
to women’s demands – and
desires – for shoes that feel as
good as they look 24/7. Indeed,
as the following collections show,
the brands are pairing good
looks and feel-good features so
effortlessly that unless someone
puts the “comfort” label on them,
you can’t tell the difference until
you try them on and try them out.
WORK
ORK
ETY
SAFETY
UTY
DUTY
THE
NAL
FINAL
WORD
ORD
ALSO
O INSIDE:
WESTERN
TERN
MOTORCYCLE
CYCLE
COLLEGIATE
GIATE
TARY
MILITARY
STYLE
YLE
Aetrex’s Essence Heeled Sandals,
Angelina style, MSRP $129.95
July/August 2012 ~ Footwear Insight • 55
Alli Marie’s Kelly, MSRP $450.
Wolverine’s Gear and Bates’ Tahoe
BRAND S RA EG ES
VOICES
VOICES
n David Kahan / CEO, Birkenstock
n Nancy Richardson / SAS
A New Emphasis
From a Traditional
Shoemaker
T
raditionally, the
SAS brand conjures
up an image of a
classic white athletic
style with Velcro
closures worn by
senior citizens as they showed
up at a restaurant for the early
bird special. Nancy Richardson is
shattering that stereotype.
Richardson, an accountant by
training who ran the SAS finance
and accounting departments in the
late 1980s before departing the firm
for 20 years, returned in March 2012
as CEO and since that time has led
the charge to re-make the brand. In
the past 18 months, she has worked
to introduce more contemporary
designs and rolled out the brand’s
first national ad campaign.
“When I returned many of the
things that made the company
great were still there,” Richardson
says. “We had a great dedication to
quality production and took
great care with our customer
relationships, but our line had
become stagnant.”
Richardson says SAS had become
very dependent on an older
consumer and that was reflected
in the product design. “That was
not the case in the late 1980s and
even into the early 1990s,” she says,
noting that tastes and preferences
had also changed dramatically.
“Today, the 70-year-old customer
wants what the 50-year-old
customer wanted 20 years ago and
we needed to adapt.”
The design and development
team at SAS responded quickly
to the directive to create more
contemporary product. “People
here were hungry for a new path,”
Richardson says. “They respected
that the market had changed and
that gave them permission to try
some new things.”
28 • Footwear Insight ~ September/October 2013
Ema ad es o Ma y McGann
mmcgann@ o mu a4med a com
Cole Haan Comeback?
PERHAPS THE SCARIEST WORDS UTTERED IN 2012 WERE SPOKEN BY
DTLR stores always aim to carry new items
and are not shy about trying new products.
Fashionable + fun + feels good = comfort shoes. From open toes
to high heels, this is the winning formula that brands in this expanding and
evolving footwear category are using to define their 2013 collections.
footwearinsightmag.com
The Bulls from Beaverton
footwearinsight.com
Manhattan’s iconic shoe
store offers its take on
21st Century retailing
• PFA
*Occupational; Hospitality;
Healthcare
Problem!
RETAIL
WILD
ABOUT
HARRYS
• ORSM
• Platform
• FFANY
• Atlanta
• FFANY
• The Running Event
No
Credit?
ES
• FFANY
• The Running & Fitness
Event For Women
MARKE
Nov/Dec
have been a retailer most of
my life as well as a clinical
and industrial psychologist
and I can assure you, the
abnormal psych classes
FUNDING
No
the affluent run consumer with choices and bargains. What do have been very helpful in
Photo Frank James
Sep/Oct
Musings of a Retail Psychologist
accessories. Retailers, of course, are clamoring for this alpha
consumer. Dick’s Sporting Goods has opened a run specialty
Exploring the need, desire and erratic behavior of consumers and what it means to retailers
The 10 Topics
That Will
Dominate
Conversation
in the Shoe
Business
in 2013
Photo Jason Arthurs
• Boot Book
• Outdoor Lifestyle
• Trail
run through the recession and continue to buy
the latest and greatest shoes, apparel and
More than half of consumers sampled have an income of $80,000 or more.
RE A
May/Jun
The business has grown by almost 40 percent
ANALYSIS
since 2006 and runners have shown they will
So many choices and so much money to spend. Our exclusive consumer research study reveals
what runners think about the burning issues of the day: the specialty shopping experience, why
they buy online and what they really think of the minimal footwear movement. The answers on
the following pages offer up great insight, a few surprises and a road map to their spending.
28 • Footwear Insight ~ November/December 2012
BIG COMPANIES
ARE GETTING
STRONGER AND
RETAILERS WILL HAVE
TO GET SMARTER
TO DEAL WITH A
RAPIDLY CHANGING
LANDSCAPE
The running market remains the hottest
category in the footwear business.
Photos by Steve Leoanard
• Men’s Style
• Casual
• Shoecare
• Accessories
MATERIALS
DUE
MAKING SENSE
Jan/Feb
FEATURES
AD
CLOSE
OF RUNNING
ISSUE
CATEGORY
COVERAGE
For men, the company
introduced the Diplomat, which
shipped earlier this year, and the
Ambassador, which shipped for
Fall. For women, the company
introduced its first pump, which
it had produced in a small
family owned factory outside
of Tuscany in Italy. Richardson
says 75 percent of SAS’ business
is in the women’s market and it
was important for the company
to bring that consumer more
contemporary product. The
company is now manufacturing
the pump in its own factories in
Texas, as well, and Richardson
says SAS remains very committed
to domestic manufacturing.
“Manufacturing here gives us
a quality control that we could
not achieve elsewhere,” she tells
Footwear Insight. “Certain things
have changed at the company,
but our commitment to quality
production in the United States is
not one of them. We’re testing our
limits with product development
and the beauty of having our own
factories is that we can do it.”
This fall, SAS kicked off its firstever national ad campaign with
a full page ad in the September
issue of More magazine and a
radio campaign in select markets.
The company is also looking
at some online marketing, but
has no immediate plans to sell
shoes online. SAS is strictly
committed to the brick-and-mortar
shopping experience, through
its independent retail accounts,
its 100 corporate stores and
about 100 SAS stores owned by
individuals. “Our fit and sizing are
a competitive advantage for us so
we believe the best experience is
for customers to come into a store
and try the shoes on right there.”
Richardson was brought in after
the passing of SAS’ last surviving
founder, Lew Hayden, and admits
all the change at the company
has not been easy. “People like
progress, but change is hard. We
believe in what we’re doing and
see more great steps ahead.” l
Uniting the
Family of Brands
n Juan De La Pena / El Naturalista
An American Approach
for a Spanish Brand
Updated styling in both its men’s and
women’s line is helping SAS attract
a younger consumer, as is a highly
targeted print advertising campaign in
the likes of More magazine.
cross country reunion
two plane changes
spaghetti dinner with the gang
dance party in the living room
keeping the beat in my SAS ®
COCO
available in Graphite, Bronze or Black
MADE IN
THE USA
SASshoes.com\coco
footwearinsight.com
footwearinsight.com
T
to take something that is special,
and has already been successful,
and write the next chapter in the
brand’s history. I view myself as
a brand steward and if you look
up steward in the dictionary, the
words “careful” and “responsible”
are used, and yes I feel I have a
tremendous responsibility to not
only grow our business but also to
do it in a manner that is consistent
with who we are as a brand.
T
he El Naturalista
brand will be
making a major
push into the
American market,
with an approach
tthat
hat combines the company’s
old world craftsmanship and
shoemaking expertise with a
modern approach to customer
service and technology. Effective
next year, the Spanish company
will establish El Naturalista USA
with longtime distributor The
Ralph Libonati Company serving
as its operational arm.
Juan de La Pena, one of the
sons of the founding family of El
Naturalista, has already relocated
to the United States and is working
with the Libonati team to implement
a number of changes that will
involve product, pricing and
inventory management.
Most relevant to retailers is the
fact that El Naturalista shoes will
pernow be available for about 30 per
cent less than they were in the past.
El Nat was always highly regarded
for its style and quality, but its aver
average retail prices in the $275 to $300
range made it difficult for the brand
to compete in the fashion comfort
category. De La Pena says that will
change. “Sandals that were $180 to
$190 will now be $120 to $130.”
The company has eliminated a
layer of distribution and cut back
operating margins in Spain, which
translates to lower wholesale
pricing, he said. “It’s the best
strategy to get back placement
and reinforce brand visibility and
awareness in the United States.”
Pricing is not the only thing that
is lighter with the shoes. De La
Pena says the shoes themselves had
gotten a little heavy. “Physically,
they were a little heavy, but they
looked heavy and that was even
more of an issue. Now our shoes are
lighter and less expensive and that
should go a long way in making us
more relevant in the U.S. market.”
The company will also invest in
customer service systems. “Having
the best customer service is my
Birkenstock has brought in talented
execs before and promised retailers
“things will be different and better for
you” before. What is different now
will make that true?
obsession now,” De La Pena tells
Footwear Insight. “That doesn’t
just mean when a retailer calls,
the people are friendly. To deliver
premium service you must address
all areas of the business and
align them with the needs of the
customer.”
De La Pena has ambitious goals
that include heavy investments
in software and technology that
will allow the company to better
manage inventory and increase
at-once delivery capabilities. He says
he’d like the at-once business to be
between 25-35 percent of the overall
total in the next few years.
To help facilitate that, El Nat will
also provide software for its sales
reps that will allow them to get a
real-time look at product availability
for their accounts. For retailers, De
La Pena has a plan for them to sell
the full El Nat collection off tablets
in their stores and then have the
shoes shipped to the location for
pick up or directly to the customer.
De La Pena says independent
brick and mortar stores will play a
critical role in the brand’s future in
the United States and he wants to
commit the necessary resources to
“stand behind them.” The brand
currently sells about 600 accounts in
the United States, he says.
“Placement at these retail stores
is important because it turns into
brand recognition,” he says. “And
we like that first experience to be in
Juan De La Pena believes the time
is right for El Nat to make a move
into the U.S. market with lighter, less
expensive shoes.
a retail store because it’s so tactile
and emotional.”
El Naturalista got its start about
10 years ago when the De La Pena
family began making shoes in
Spain. The brand began to resonate
with consumers for its use of color,
its design point of view and its
ecological sensibilities. The company
was among the first in the shoe
business to focus on using recycled
leathers and materials, vegan dyes
and green manufacturing processes
in its three plants in Quel, Spain
and in the free zone in Tangiers,
Morocco. Juan, who is 32, is the
youngest brother involved in the
business. Pablo, the oldest, and Jose
Maria, who is 36, remain based in
Spain.
De La Pena says the company also
tries to bring an artistic approach
to shoemaking. Each year, he says,
El Nat devotes 70 percent of its
resources to core product; 20 percent
to new product and 10 percent to
“crazy pure innovation.”
However, De La Pena does not
view the move to America as falling
into the latter category. “The time
is right. We’re ready to make the
commitment and the investment.” l
D
epending on
how you look at
it, David Kahan
has one of the
best jobs in the
industry or is
currently occupying one of the
currently
hottest seats in the shoe business.
Kahan was appointed CEO of
Birkenstock in early June and
quickly embarked on a fast ride.
The Birkenstock brand is on fire,
featured as “hot” in both men’s
and women’s fashion magazines,
and Kahan is attempting to ride
that wave while implementing
a new structure in the U.S. that
will make the company easier to
work with for retailers and more
responsive to the marketplace.
“We were un-retail centric,”
Kahan said while bouncing between
meetings at the recent FN/Platform
Show. “Our goal is to change that
and put into place a more attractive
structure.”
Kahan says the issues among
German ownership that caused
problems in the past are gone and
that the company now has the
freedom and authority to “do what
needs to be done.”
Kahan has spent time at Fila,
Russell Athletic, Rockport and the
WSA/ENK trade show.
After the trade show season,
Kahan answered the questions that
all retailers are asking.
You had other opportunities, so what
was compelling to you about this one
that made you pick up and move to
California?
Birkenstock is one of the most iconic
brands in the history of the industry.
While numerous compelling
opportunities came to me, the
opportunity to manage a brand
with the history and the emotional
relevance of Birkenstock is just
impossible to replicate. Honestly,
it’s a once in a lifetime chance
30 • Footwear Insight ~ September/October 2013
Unfortunately while the brand has
always maintained tremendous
relevance with consumers, in
the past, based on our business
practices, we lost relevance with
the retailers. We became known
as “difficult to do business with”
and frankly a bit “stuck in our own
ways” and as the world moved
around us we were left a bit behind
and other vendors grew in what
was previously our space. First off,
I wouldn’t be here if I didn’t think
that Birkenstock, as a brand, has
every right to claim this space, and
we do — we are the real deal. So
all we are doing now is re-claiming
what is rightfully ours. That’s
the first step, and most retailers
agree, 100 percent. Many shared
with me a belief that Birkenstock
would be an even bigger brand
“if only…” And the “if only” was
usually followed by, “they listen to
us” or “they become more focused
on U.S. needs.” It’s just simply a
matter of now we are. We have
built a great team here in the U.S.
and now have resources focused on
meeting the needs of this particular
market. Sure we are part of a larger
global organization, and there is
nothing we will do strategically
that opposes the brand integrity,
however, we will aggressively
implement actions that are tailored
to the U.S. retail marketplace. I have
a seat on the Birkenstock board and
I have excellent support from the
David Kahan is leading Birkenstock on
a more retail-focused path in the U.S.
market. The brand is hot in fashion
circles right now and is working to
reclaim its place as an iconic brand.
global team. The first sign of this is
that we are combining what were
previously separate U.S. operating
units for each brand into one
cohesive company. This alone is a
dramatic shift in how we operate
now versus past management. As
a further sign of this willingness to
allow us to do what we know is
right for our market, we now have
a U.S.-based product designer. This
has never happened in our past.
Now, we have someone with “feet
on the ground” who will “get” the
U.S. market and have the ability
to design and develop product
that meets our needs, again, while
maintaining the DNA of the brand
on a global basis.
What does the end game of success
look like for Birkenstock and its
retailers?
I don’t see any “end game.” I see
this as a developmental process
where in the near future Birkenstock
defines sandals, defines “comfort”
footwear in the marketplace and
where we take all the elements
that make ours a sandal people
love and expand that into more
closed toe offerings so as to capture
T
footwearinsight.com
September/October 2013 ~ Footwear Insight • 29
30 •
CIRCULATION: 14,179
Title
Channel
Manufacturers
Others Allied to the Industry
Pedorthic Stores
Department Stores
and Mass Merchants
4%
8%
Store Manager
9%
8%
13%
Buyer
54%
22%
65%
18%
Sports Specialty Stores
(Outdoor, Running and
Sporting Goods Stores)
Owner/President
Independent
Footwear Stores,
Boutiques
and Chains
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