Q&A With Rockport’s Michael Rupp

CANTON, Mass. — Michael Rupp is a man on a mission.

The Rockport president and CEO, who took over the company in January 2008, is charging ahead with a plan to refresh the brand image, dramatically expand its global presence and reinvigorate the women’s offering.

“We understand that Rockport took on a little bit of dust in the last couple of years, so [we’re looking at] how we can make the brand relevant for today’s consumer, and how we can bring it [to life] in a global, relevant way,” he said.

Rupp’s strategy is to focus on the brand’s comfort heritage while upping the style quotient. “The qualities of the product are clearly comfort, lightweight, flexibility, what we call walkability,” he said. “That’s what we are focusing on. That’s what people expect from Rockport.”

The Adidas veteran was relaxed and excited as he sat down with Footwear News to discuss Rockport’s plans for making a fresh start, and wasn’t interested in reviewing the many makeover attempts the brand has undergone.

“Looking back, there are always some things you maybe would not do again,” he said. “[But] we are really looking at the future, not trying to criticize the past.”

To build the brand, Rupp has already made a number of major changes, including enlisting a new product team.

“With me came a head of marketing [Shari Fabiani] and head of product creation [Daniel Tschuemperlin], and we have category directors — one for men’s [Dave Pompel], one for women’s [Haysun Hahn] — who are both new, and we have a completely new design team working [on women’s],” he said. “If you really want to turn the rudder that drastically, you need a new team to do it.”

The women’s team has been charged with growing and refashioning the collection — and their first efforts will be on display at next week’s FFANY show.

“Spring ’10 will be the first time we show a complete, end-to-end women’s range,” Rupp said. “We have a [collection] now that encompasses high heels to sporty walking-type products to very traditional New England product.”

The new line will get prominent placement in Rockport’s new concept locations, which put the focus on women’s product in the front of the stores.

International growth is at the top of Rupp’s agenda, and to expand the brand globally, he is tapping into Adidas’ vast network of resources. The brand is also taking advantage of the athletic giant on the product side, and is using Adidas technology in much of the collection.

While Rupp is determined to take Rockport to the next level, he understands the importance of cautious growth during a down economy.

“We wouldn’t be ready right now to say, ‘Let’s conquer the world,’” Rupp said. “That is something that will take us another 12 or 18 months to get to, and hopefully by then the crisis will be over and we will be ready.”

FN: What are your major goals for Rockport?
MR: Our long-term target [is to bring] our international business to 70 percent. Today, approximately 44 percent of our business is international. Our estimate is actually that 90 percent of the relevant market in our price segment is outside the U.S., so we think we will still be overrepresented in the U.S.

Our women’s share today is 23 percent of the business, and we want to bring that up to 50. We’ll always be a strong men’s brand — I mean, we will become dual gender, but we won’t lose our strong men’s heritage. And with our full-price retail, in all kinds of shapes and forms, we can do 30 percent of our turnover in the future. It’s 4 percent today.

FN: How does your strategy differ from past attempts to invigorate Rockport?
MR: In the past, there were some attempts to say, “Rockport is old, it’s dusty, so let’s try something new.” We’re not taking that route. We’re looking into the core of the brand, and the core of the brand is very clear: It’s a lightweight shoe with engineered comfort. In the past, words like “comfort” and “walking” were considered bad for the brand. Now we’re saying we think they’re very good for the brand because that’s what people like about Rockport.

FN: Has the current economic crisis changed your timeframe or objectives?
MR: Of course. [The economy] affects a lot in terms of timing, what the rollout possibilities are and how fast it can go. At the same time, what is good for us now is that we are really investing significantly in getting the product right, getting the brand right, getting the marketing expression right, getting the retail right. Honestly, we wouldn’t be ready right now to say, “Let’s conquer the world.” That is something that will take us another 12 or 18 months to get to, and hopefully by then the crisis will be over and we will be ready.

FN: So is the worst behind us?
MR: We will see some more hard times. There will be some surprises ahead, but we will, after the summer and into the fourth quarter, see things stabilizing because everybody runs against lower comps.

FN: Has your distribution strategy changed amid the weak climate?
MR: For many channels that were selling higher-end product, they feel their consumer demands more acceptable price points, and we think with this product we are hitting that [sweet spot], where the $100-to-$120 price point is the new luxury, not the $200-to-$400 [range].

[For example], Nordstrom, as a distribution channel that was really targeting higher prices, is now looking at us, and we are increasing our business with them, which is great. Of course, in other channels we have the same phenomenon.

We are also doing programs like that for the moderate channel, where we build products that fit into those [stores]. We have set up a new structural unit that we call Rockshop, basically a sales team and a design and development team that works with the retail customer in developing products for the moderate channel, for a Famous Footwear or a Shoe Carnival. There, the shoes are around $70 and $80, so it’s the highest price points in those channels.

FN: Do you see the new product getting you into more independents?
MR: Absolutely. It’s clearly our strategy to do so. We think it’s absolutely important for the brand to be with those opinion leaders and to use the profile of their stores to show the consumers the front end of the brand. We are reopening independents that we stopped working with three to five years ago. We are building shop-in-shops and we have a real push toward those independents [that] are looking for value and quality for around $100.

FN: What advantages does a brown shoe brand get from being part of a global athletic company?
MR: We are drawing on a global infrastructure with subsidiaries in every major market in the world. We are drawing on capital, and I’m not only talking about money but also people, know-how, facilities. It’s a huge resource pool that we can draw from, and part of [that] — the most important part — is we have full access to group technologies. This “engineered comfort” idea can be fueled by proven technologies that come from the athletic industry.

FN: You’re incorporating Adidas’ Adiprene cushioning and energy-returning midsole material across the line for spring ’10. How important is it to brand the technology in the shoes to your end customers?
MR: We’re not trying to sell “Adidas shoes by Rockport,” but [the technology] gives us the credibility that we want to achieve by showing the consumer we are building a shoe that has technical competence, and not just design competence.

FN: Will you rely on Adidas and Reebok for future innovations?
MR: We’ve also built Rockport technology, specific technologies that are really Rockport technologies, and we will launch that in fall ’10. The sister brands are doing athletic technologies, so they don’t think about walkability too much. They think about how to run faster or be healthier, and we, of course, look at our own thing.

FN: You opened redesigned concept stores last year in Montreal and McLean, Va., and this year in Hong Kong and Moscow. How has the look of the store changed?
MR: We started with [placing] women’s product in the front of the store and men’s in the back of the store. Most people know we have men’s shoes, so we put that in the back, which created a nice atmosphere. The [biggest] innovation is that there is no separate storage room — the storage is [part of the store]. The idea is that the sales assistant never leaves the customer on his or her own. [Going forward], we are also preparing presentation space for women’s handbags, which will become a women’s accessory line. We will have the first test run in fall ’10.

FN: How did shoppers react to the new format?
MR: We saw an approximately 26 percent better result with this store compared with the other stores in terms of sales. We were immediately able to increase the women’s share in that store — even [without the new women’s] product — by about 15 percentage points. And with the right product, we can do much better than that. So we have taken [what we have learned] and have translated it into a store we will open at the Streets at Southpoint in Durham, N.C., in August.

FN: What global regions are ripe for stores?
MR: Asia is one of our most important areas, especially Japan and Korea, but markets such as Australia and Hong Kong are also very important to us. We see a clear push in that direction. In the end, if you strive for global leadership, you can’t turn your eye off a region. However, we think that any global strategy starts with a successful home market, and so our No. 1 focus is clearly the U.S., in retail and in everything else.

FN: How will you communicate the new focus on women to potential shoppers?
MR: We understand that for women, shoes are a very emotional thing — women get really excited about shoes, which is good for us if we address that properly. It’s about visual and tactile features, it’s about branding, it’s about femininity. So from a visual standpoint in our ads, we call out the Adiprene technology [but] we don’t have to talk about how nice the product is — we show a product with [great] styling.

FN: You launched the “Choose to Walk” campaign in spring ’09. How does that message reflect the changes in the brand?
MR: We talk about [targeting] the metropolitan professional, someone who goes to work every day, who has to run around a lot. Our vision is to enable those people to do more, be more and live more, and we will bring that into “Choose to Walk.”

FN: What is your long-term outlook for the brand?
MR: Adidas really pushes us to become a global leader in the brown shoe industry and the leather shoe industry. It’s about having the right strategy in place, having a brand and having the group resources behind us. That’s why we wake up every morning and come to the office. On the Adidas side, we have learned that it really is not so important how long it takes — what’s important is that you get there.


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