Running Man: Q&A With Saucony’s Richie Woodworth

LEXINGTON, Mass. — Richie Woodworth wants to make some serious noise.

The president of Saucony, who led the brand to impressive double-digit growth over the past two years, is forging ahead with an aggressive plan to make the label a dominant athletic player.

Since joining the brand four years ago, Woodworth has worked hard to shed its image of being “a sleepy little company in New England.”

“We’re not quiet at all anymore,” Woodworth said, in an interview at his office here. “We want people to know us.”

The first part of his strategy focuses on continuing to fuel sales growth in the U.S. market, where he is building the executive team, rolling out more technical product at all price points and significantly increasing the marketing spend.

But as far as Woodworth is concerned, that’s just the beginning.

Saucony, a division of Collective Brands Inc., is also eyeing major international growth over the next few years, with the London 2012 games as the cornerstone of that initiative. Saucony has also been beefing up its athlete roster, recently signing sprinters Wallace Spearmon Jr. and Lauryn Williams.

For their part, retailers were bullish on the brand’s prospects.

Michael McGuinn, SVP and GMM for footwear and active apparel for Englewood, Colo.-based Sports Authority, praised Saucony’s broad range of product.

“Saucony has done an excellent job to work with us to find the sweet spot for this brand in our store,” McGuinn said.

Brian Trask, footwear category manager for Boston-based sporting goods chain City Sports, said the label’s sports marketing outreach had the potential to up its profile, and he’s upbeat about the company’s plans to expand apparel and even eventually move into new categories. “They’re a brand that could grab some market share,” Trask said. “They have huge support with City Sports.”

Saucony is key to the growth plans of its parent company, according to Collective chairman, president and CEO Matt Rubel.

“Through running, we can create an innovative, high-quality, high-performance athletic brand,” Rubel said. “We’ll do it through footwear and apparel and accessories, creating a total experience for athletes.”

Rubel also sees potential overseas to use Saucony’s robust European connections. “Saucony gives us an international platform for growth,” he said. “We can use Saucony as the lead horse in Collective Brands’ expansion into Europe.”

For Woodworth, it’s all about letting people know what Saucony has to offer.

“That’s what Saucony is all about. We’re a really competitive company, but we’re also humble in an honest way,” he said.

“We know we’re not as big as Nike. We know we’re not as big as New Balance. But we’re not afraid at all. A runner is a runner. We believe we can make a better shoe product and create a better experience.”

FN: You’ve seen double-digit sales growth in the past two years. What do you attribute the success to?
RW:
Product is what’s been driving us. We have this joke around here that Saucony used to make the most technically advanced shoes around — but you used to like to run at night because you didn’t want to be seen. They weren’t the greatest looking shoes in the world, but I’m really happy to say that we’ve changed that, fairly dramatically. I think from an industry perspective that’s been the biggest change.

FN: The brand has captured an incredible amount of share in the run specialty channel —14 percent, according to Leisure Trends. Was run specialty a priority for you?
RW
: The growth we had in run specialty was significant, but it was right in line with the growth that we had with sporting goods, right in line with the growth we had with the direct channel, right in line with the growth that we had with family.

FN: Did you have to make any changes to hit those markets outside of the running channel?
RW:
We really elongated our ability to hit a broader range of consumers, by bringing to the market great shoes at opening price points, at moderate price points and at better price points. It gave us the ability, for the first time, to be really successful in sporting goods and in family footwear. We believe we make the best technical shoe on the planet, but we also make the best opening price point running shoe on the planet as well, and we’ve gotten a lot of traction out of that.

FN: Are there segments where you think you can improve?
RW:
We can struggle sometimes in a place like the mall. That’s where we see the “I want” consumer versus the “I need” consumer. The “I need” consumer goes into a sporting goods store because they need a running shoe. At the mall the attitude generally is, “Look at that shoe, I want that.”

FN: What do you chalk that up to?
RW:
Brand awareness — and that is probably, from a broader perspective, our biggest negative. We know that, and we’re working on it. There are ways for us to be guerilla about it, but not spending as much money in terms of a media campaign to kind of fix that problem. But we know it exists. We’re not naïve.

FN: In the past, marketing hasn’t been Saucony’s calling card. How are you changing that?
RW:
We’re spending a decent amount of money: We’re not going to spend the kazillions that a company like Nike does, but we’re pretty strategic in how we spend.

FN: What steps are you taking?
RW:
We’re making our media buy much broader. We’re still being prominent in our vertical running publications, but for spring and fall, we’re going to be in ESPN the Magazine and we’re going to be in Rise, which is a high school publication. We’ve also launched our first TV ad in the Boston market, and we’ll be running the ad in two other markets starting May 31. We’re going to be doing a lot of stuff that will get us to break out.

FN: Have you significantly upped your spend?
RW:
If you look at it globally, it’s doubled over two years. Collective Brands has been very supportive of us being able to leverage our business.

FN: Let’s talk more about the sports marketing piece of the business. Mark Bossardet came on board in March as VP of that segment. What has he been charged with?
RW:
One of the things that we noticed from our business and our research is that while we’ve started to do a real good job with the cross-country-running high school age demographic, we can do better with men. We’re missing a kid in the spring, and he probably doesn’t even know us. He plays football in the fall or he’s playing basketball and then he runs spring track. What we found was that this kid is very influenced by athletes and athlete endorsement, very influenced by coaches and by third-party information whether it’s on the Web, TV or social media.

FN: You’ve added sprinters Wallace Spearmon Jr. and Lauryn Williams to your team. Is that part of your outreach?
RW:
[Yes]. That male market in the younger group is part of a tough crowd. They’re very brand focused. They want to be really individual — just like their friends. So sports marketing has become a huge push of ours, and we believe it’s absolutely giving us access to that 18-to-24-year-old kid. All the research shows that he relates to and is inspired by great runners and great athletes. That kid doesn’t look at our beloved skinny, long-distance sponsored runners the same way that he looks at a stud sprinter.

FN: You’ve hinted that the London 2012 Olympics present an important opportunity for Saucony. How so?
RW:
The way we look at 2012 is that it’s kind of the great stake in the ground for us. We have a significant opportunity to really break out with awareness and athletes on the podium. We have a very specific goal in mind for London with the number of medals and the number of athletes we’re going to have on the podium. We view that as a catalyst for us, and a global stage to transform the brand.

FN: How much is Saucony represented internationally?
RW:
International is a little more than 30 percent. But one of our strategic initiatives is to grow our international business. We have a subsidiary in the UK, in Germany, Austria, Poland and Benelux, and they have about 70 percent of our total inner European business. We have a warehouse and office centralized right outside of Amsterdam, and we’re building infrastructure there, including a new, bigger warehouse that will facilitate orders and customer service.

FN: Where else do you see opportunities?
RW:
We have some distributors lined up in other countries like Italy, Spain and the Scandinavian region, all of those businesses are growing. We expect, in the short term, to get most of our growth out of international there. Longer term, we need to re-look at and re-invest ourselves in Asia Pacific and South America. We hope to have partners in place by the end of 2010 and be in business there in 2011.

FN: How much will Saucony’s overseas sales play in the firm’s future?
RW:
I would see no issue at all with us being a 50/50 business. The obstacle is that we have to get outside of the running category.

FN: So adding new categories is part of the overall plan?
RW:
In almost every sport, you run. If you think about it, you could say, what sports require the greatest amount of running? Then it becomes a little easier. Players run, on average, seven miles in a soccer game. Could we build, using what we know about running, a great soccer boot? Probably. Players who want to be great hockey players, those kids are out running. [So the question is] how do we get that athlete involved and how do we build a training shoe for them that makes a lot of sense?

FN: When are we going to see a product that goes outside running from Saucony on the footwear side?
RW:
I can’t tell you.

FN: But it’s something we will definitely see?
RW:
You will, eventually. We’re going to build, in the next year, a human performance lab right at the end of this hall, if we can fit it in, or somewhere else in the building. We’ll move our staff and hire some more people. It’ll be an expanded network — you can’t just have a lab, you have to have actual people in there. And Collective Brands has been generous with us.

FN: Toning has made a huge impact in the athletic world over the past year. Is that a category you’re interested in entering?
RW:
We’ve had a lot of really tough and constructive debate on the [toning] category. [We’ve taken] what we’ve learned about running and came up with a concept that is going to be compelling and authentically designed by Saucony. And we would not do that category if we thought it was in any way gimmicky or not credible. But there are a lot of brands that are sort of rushing in — they saw a lot of money being siphoned from the walking category or this new health and wellness or toning category.

FN: Do you see it as a must-do to stay competitive?
RW:
Fortunately for us, we’re aggressively growing, so I don’t think we needed the toning category to continue to grow. We also know what’s going on in the marketplace, and we do think there are some things there. We have a lot left to do to validate our concept to prove that it works and does the things that we think it’s going to do in our lab. Should all of that work right and things continue in the way they’re going in the marketplace, we’ll probably have something in spring ’11.

FN: How do you reconcile the toning aspect with your running focus?
RW:
[Our technology] is based in running — based really on some simple stuff that longtime runners and athletes who have trained a lot employed.

FN: Does it take the minimalist approach, the way Nike is attacking the category?
RW:
There’s a minimalism kind of thing that’s a route of growth right now, then there’s the toning category, which is also a route of growth. I think they’re different. There are maybe some things that crossover in an upper but not in the bottom unit.

FN: Will Saucony be incorporating minimalism or barefoot-like elements into product elsewhere in the line?
RW:
[Yes.] We have a shoe that we shipped May 1 called the Kinvara. It’s less than 8 ounces, super light, and the way that this shoe has been designed and engineered allows for the things that are appropriate to barefoot running that a shoe company would want to incorporate. The ability to have toes spread, the ability to have support for tendons and ligaments, the ability to get a foot strike in the middle to the forefoot of your shoe — that’s all engineered into this shoe. There’s as much protection and cushioning as we have in our Triumph [cushioning shoe], but it allows the foot to react differently. We absolutely love this shoe, and our lead athletes are running in it.

FN: How’s the response been to the Kinvara?
RW:
Really good. We’ve probably doubled the initial production volume expectation. Not to get carried away, but it’s a significant shoe for us. And it was the fourth most-searched word on our Website [before it launched], when no one was really supposed to know about it.

FN: The Saucony Originals heritage business is only a small percentage of sales for you today. What needs to happen to achieve success in that segment?
RW:
I think you need great stories, you need great product that’s compelling and you need the right kind of people to partner with you on it. What we’re trying to do now is develop the business with a little bit of a broader kind of outlook, and we’re trying to do it with the top-end boutique stores around the world, people like [Boston’s] Bodega, like Patta in Amsterdam, having them tell stories with our Originals.

FN: How much of the business would ideally come from classics?
RW:
We’ve talked about it in terms of around 20 percent to 25 percent of our total. Otherwise, you become more of a fashion company, and we’re never going to be that.

FN: Are there any companies that strike that balance?
RW:
I think Onitsuka Tiger’s done it well. And you know, I happen to think that Nike, frankly, does this as good as anyone. They’ve been able to hold on to their historic performance image, and they probably sell more fashion shoes than they do performance shoes.

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