Brand of the Year: Ugg Australia

Brand of the Year: Ugg Australia
Angel Martinez and Connie Rishwain, photographed at Deckers Outdoor Corp.’s Goleta, Calif.-based headquarters

Angel Martinez follows a simple mantra for making sure Ugg Australia doesn’t simply bask in its past success: “What got us here, won’t get us there,” said the chairman, president and CEO of parent company Deckers Outdoor Corp.

Still, where the brand is now is pretty enviable territory. During its third quarter, ended Sept. 30, Ugg saw sales grow more than 47 percent, to $376.7 million, making it almost a sure thing that the label will pass $1 billion in sales by year’s end.

Yet even as the brand closes in on that major milestone, Martinez is already looking ahead.

“Could we [eventually] double in size or even triple in size? I think so,” said the executive. “The product line has evolved to meet consumer needs in each market [around the world]. So now we have a year-round product line in men’s, women’s and kids.’ We can sell product in warm and cold climates, and we can do it every month of the year.”

That might sound ambitious, but given what the brand team has accomplished so far, the smart money is betting on Ugg.

“Customers simply love Ugg,” said Scott Meden, GMM of shoes at Nordstrom. “The success of the brand lies in its ability to provide relevant fashion that gives its loyal customer a new reason to buy without losing the comfort that is the cornerstone of the brand. She now has fashion choices that cater to more areas of her life.”

Jim Estepa, SVP of Genesco Inc. and president and CEO of its retail group, also lauded Ugg’s growth. “We’ve watched the brand consistently introduce must-have fashion products,” he said. “The disciplined approach to distribution, the continued evolution of the core product and a keen understanding of brand equity will sustain Ugg’s growth and success for years to come.”

This past year, the label aggressively stepped up its efforts to attract male customers beyond its slipper business. In addition to designing a comprehensive line of shoes and boots for men, Ugg signed New England Patriots quarterback Tom Brady as the spokesman for the line. The larger product range, combined with Brady’s appeal, proved a winning combination.

“It has been a resounding success,” said Martinez. “Our men’s business is up very solidly — in the double digits [over last year].”

Connie Rishwain, president of the Ugg brand, said the product and marketing message are just starting to take root, with big things ahead for the coming year.

“We really see the Tom Brady campaign influencing 2012 even more than in 2011,” she said. “In 2011, [Brady] helped sell through, but not sell-in because [the campaign] didn’t launch until fall. We see it being even that much stronger next year.” While Rishwain said sales of men’s product would likely always lag behind women’s, men’s could eventually make up about 25 percent of sales.

For his part, Brady said he’s thrilled to be on Team Ugg. “Long before I partnered with Ugg, I was a huge fan of the brand,” he said. “I wore them and gave them as gifts to family and friends.”

The brand also scored this year with its Ugg Collection, a line of luxury, more fashion-driven product made in Italy. The new range helped Ugg-branded footwear enter the couture departments and shoe salons of top department stores, including Nordstrom and Saks Fifth Avenue. Priced at $500 to $1,200, Ugg Collection marked a turning point for the brand, expanding its audience — and credibility — as a fashion player.

On the retail front, the company bowed 13 locations in the past year, bringing its total to 50 doors worldwide. More could be on the way, though Martinez said the rate of new openings will largely depend on the global economy.

“We’re probably looking at another 25 stores next year, but that’s up in the air,” he said. “We’re very aware of what’s happening with the macroeconomic environment around the world, so it’s a valve we can open or close. We’ll continue to open stores, [but] the rate may slow a little bit.”

Regardless of economic headwinds, Martinez said, the company will continue to build its men’s business in the coming year, refine its fashion-product offerings, add newness to its core classics and open additional retail shops, plus expand the brand in Asia, Europe and Latin America.

“More people are discovering Ugg every year,” the CEO said. “Now the consumer who, for whatever reason, wouldn’t want to wear a classic boot has many other reasons to buy Ugg. It’s an exciting time.”

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