How Does The Parent Company Of Ugg Transform The Ugly Shoes Into A Trend Product?

As one of the hottest footwear brands, Ugg has become one of the most negative effects of the fashion products. Hoka One One, the parent company's Deckers, has been very popular recently, and is likely to be a new growth point. But how can they maintain their unique advantages?

New York Gwyneth Paltrow and Kanye West are very different in their brand styles, but their tastes on shoes are very consistent. They have been photographed wearing Kanye One One thick shoes this year.

In May this year, paparazzi did not wear his Yeezy sports shoes. The new shoes had a mix of mountaineering boots and sports shoes. In October, Paltrow released a photo at the Tracy Anderson gymnasium, with Hoka Logo on her black sneakers and a brand - eyed thick sole design. Britney and Reese Witherspoon also shifted from the aesthetic imbalance of fashion brands to the first pursuit of comfort.

In 2009, French Jean-Luc Diard and Nicolas Mermoud jointly founded Hoka One One (pronounced "roc CA Ou Nei"). The brand name comes from Maori language, meaning "One One" (Hoka). Two people worked in outdoor sports brand Salomon (Salomon) before. When they received endurance training in the French Alps, they finally chose a large but light weight running shoes. They say these shoes are better suited for cross-country running, especially downhill.

Hoka One One was born in the age of popular minimalism, but brand made entirely different products - shoes like clowns. Bulging, but it promises the most comfortable riding experience to athletes. Although the fashion industry finally accepted the old man's shoes, Hoka's striking Logo color matching looks like the color wheel's random rotation, which is hard to be accepted by casual fashion consumers.

But in recent years, thanks to good reputation, the rise of sports and leisure styles and the timing of cooperation, Hoka One One has won a lot of new fans.

"At first, I thought," these shoes look strange. " Tyler Haney, founder of fitness brand Outdoor Voices, said she had tried sneakers a few years ago. Outdoor Voices has been working with Hoka One One since April 2018, and she has replenishment 7 times.

In the fiscal year ending May, sales of Hoka One One surged 45% to $223 million. The brand increased by 50% in the last quarter, which is in sharp contrast to the decline of professional running shoes on the market.

"Hoka is one of the hottest brands in the market," Matt Powell, NPD sports industry consultant, commented. "They launched a product that really solves people's problems. People who have problems with knees, hips or ankle problems have to stop running. (they) found running in these shoes without feeling pain.

The excellent performance of Hoka One One is not surprising - after all, Deckers bought it in 2013. Deckers has a scientific theory that makes ugly shoes cause a viral sensation.

In early 70s, Doug Otto and Karl Lopker met in Santa Barbara, when they were producing flip flops and sandals and sold in coastal areas. The company was established in 1975 and entered the public view until 1993. Deckers is headquartered in gorata, California, and owns Ugg and Teva brands. According to the company's earnings report, sales in 2019 have set a record of over $2 billion. The company's share price has almost doubled since 2017, and the transaction price is close to the highest level in history.

Success owes much to Ugg, which has contributed about 3/4 of sales to the entire company. In many ways, it is precisely because of the ups and downs of plush boots that it has accumulated experience for the bright expression of Hoka One One.

Ugg reached its peak in early twenty-first Century, the favorite of Beyonce, Kate Moss and countless other superstars.

Wendy Yang, President of Hoka One One, said Deckers now controls the distribution channels of its brands strictly. Warehouse, Fleet Feet and REI are the largest retail partners of Hoka One One, but they are slowly expanding to more fashionable stores, such as several Nordstrom stores.

She said: "first and foremost, we are very strict and do not plan to fully open up."

DTC is another important point, although its current business is still less than 50%. In the weekend of November 2018, Hoka One One built its first flash store on the New York marathon. Yang said that although brand online sales, especially in the US market, are "growing rapidly", there is no plan to set up brand entity stores.

Brands also attract more female consumers. Four years ago, customers of Hoka One One 65% were men. According to Yang, the two sides are now almost equal. Hoka One One also released new models two times a year, changing to more stable styles including soft color matching, attracting consumers who had been scared away by the brand's "publicity and pride" aesthetic style.

In addition to Outdoor Voices, Hoka also collaborate with street clothing brand Engineered Garments, and recently collaborate with Opening Ceremony. Yang mentioned that she often refuses requests for cooperation, giving priority to partners who can bring new customers without violating the core value of the brand. The way of cooperation is limited to color matching and material, and shoes still keep the same technical specifications.

Priorities include new products. Although the brand has introduced basic clothing, the series will be larger this spring, including functional clothing and fitness jackets and sweaters. And as Kanye West discovered, they will pay more attention to hiking style, and sister brand Teva will also expand this category.

"I think the definition of" outdoor "has changed," Yang said. "It's no longer a climping peak or camping under extreme conditions. It's time to go out.

Teva is famous for sandals. Since the autumn of 2020, it has provided closed mountaineering shoes. The brand tries to sell products all the year round. After many years of brand licensing, Deckers acquired this brand in 2002. It is the most profitable brand of Deckers before Ugg. In the fiscal year ending May, Teva sales increased by 3% to $137 million.

A recent New York Times report even claimed: "Wow, Teva has become cute", responding to the brand's more fashionable color matching and cooperation with Outdoor Voices.

"Teva has just thrown a lot of stuff on the wall for years. Now they are concerned about their traditional classic bandage. Susquehanna International Group analyst Sam Poser said: "it is still very small, but it has begun to improve."

Even though Ugg has experienced many years of decline in sales, its performance is picking up. Sales in the 2019 fiscal year increased by 2% to $1 billion 500 million. Deckers shut down a lot of wholesale accounts to protect the image of the classic shoes, but at the same time, it found that the new style mixed with sandals and slippers was successful. The new style has a great advantage over boots, and they do not need to rely on cold weather to boost sales.

Andrea O 'Donnell has been in charge of Ugg and low price footwear brand Koolaburra since 2016. She said that brand transformation is clearly necessary.

"We notice that Urban Dictionary is often associated with some negative words." O Donnell worked for a long time in the luxury industry including lac Crawford before joining Deckers. She said, "we are aging very fast. We define ourselves in a very unique way, classic shoes suitable for cold weather.

O'Donnell brings new design teams. Their task is to add some fashion to the brand. So with the birth of the Fluff Yeah series, rainbow coloured toes are dragging, and elastic straps are attached to the heels. It is popular among teenagers and young 00, O'Donnell said.

"I think they did a good job in abandoning the snow boots." Powell said.

Ugg also reduced partners and chose to collaborate with some popular street fashion brands such as Bape, Heron Preston and Eckhaus Latta. They helped boost the sales of male product lines, and they never worked with them even at the height of their brands.

Deckers's smaller brand is still unknown. Koolaburra is a low-cost substitute brand for Ugg, and the price of retailers such as Kohl's is half as low as that of Ugg (Ugg has prosecuted the trademark on the grounds of trademark infringement in 2005, and Koolaburra in Deckers2016). Brand sales in fiscal year 2019 amounted to US $44 million. Sanuk sells mainly rustic sandals, and sales fell by 9% last year.

The common feature of Deckers's brand is the limited distribution channel -- the consequences of Ugg's ups and downs. "Tell others that they can't own it, but they want more." O 'Donnell said.

Translation: Jing Wang