Bob the Builder: Q&A With Bob Campbell

Nothing seems to slow down Bob Campbell.

After more than 50 years in the shoe business, the charismatic founder and chairman of BBC International is still busy growing the company with the energy and enthusiasm of someone just starting out.

“Sometimes my team has to rein me in,” Campbell said recently. “I get very ambitious and want to jump on every opportunity, but that’s not always possible.”

The executive, 74, has spent the last year tapping into fresh opportunities, including adding new brands and bolstering international growth.

In November, he pulled off a major deal with Brown Shoe Co. to take over the St. Louis-based firm’s children’s wholesale business, including the Sam Edelman, Buster Brown and Avia brands.

Earlier in 2011, Campbell moved BBC into new markets with the purchase of a 50 percent stake in men’s firm Robert Wayne International and a licensing deal with outdoor brand Bushnell. He also landed one of the kids’ entertainment industry’s most prized licenses: Sesame Street.

Seeking new frontiers for growth, BBC — which sold 40 million pairs of shoes last year —is also expanding its international business. “Overseas is where we’re seeing the biggest growth,” Campbell said. Latin America is an emerging opportunity, he added, and the Asian market remains a hot spot.

Indeed, the company chose China as the location for its latest move: a foray into retail. In the past five months, BBC has opened a string of kids’ stores in the country under the Luxe Brands banner. Operated in partnership with one of BBC’s Hong Kong-based suppliers, the stores carry the company’s Guess, DKNY and Polo Ralph Lauren lines.

“We’re excited about doing retail there,” Campbell said of the venture. “The stores are very high end and a great showcase for our brands.”

Here, Campbell talks about his blueprint for the newly acquired Brown businesses and navigating a changing industry.

How has the transition been with Brown?
BC:
It’s been very smooth, especially considering we’re transferring businesses from a public company to a private company. We feel fortunate to have been chosen as their partner. Kids’ footwear was only a small percentage of [Brown’s] business, so it was a wise move for them to exit the category to focus on their women’s business. We’re very excited about working with Sam Edelman, in particular. He is an enormous talent, and his brand is expanding quite rapidly. The children’s shoe business is very limited within the fashion branded area, so there is a huge opportunity for a brand like this. And we like that Sam is taking his brand global, and we plan to go with him.

Buster Brown is a brand with a long history in the kids’ industry. What are your plans for it?
BC:
We’re excited about rebuilding Buster Brown. It’s a name everybody knows. We’re starting with a big program with Famous Footwear for fall, and by [spring ’13] we’ll move forward with a strong line for the mid-tier channel. We will play up that heritage angle — that will be a key piece of it — but we also will have more updated-looking shoes that are right for the brand. You have to remember this is a brand [targeted to] younger kids, so we need to stay age-appropriate and appeal to moms.

What opportunity do you see for Avia?
BC:
The Avia adult brand is in transition right now as [Brown] determines what direction it will take. They’ve hired some great people from the top brands, and they’re trying to clean it up and reposition it. They had been very focused on that whole rocker-bottom category. So we are waiting for more details, and we will follow their lead. We’ve been testing some product in the market and getting good vibes, but the first real line won’t be out until spring ’13.

What’s new in your company’s character-licensing division?
BC:
We negotiated with Brown to take over the remainder of their Marvel license — we had already signed the license for 2013 and 2014. We feel very [bullish] about Marvel, especially with the [“The Avengers”] movie coming out [in May]. It will be another [merchandising] bonanza. We just re-signed with Sesame Street, and we’ve also added Hot Wheels for spring ’13. But one thing we feel we’re missing is a strong girls’-driven character license. There is one we’re looking into seriously right now, and we are hoping to be able to announce that soon.

Are you seeking to make any additions to your branded portfolio?
BC:
We’re looking at two brands right now that would fit well under BBC. Other than that, we’re just focused on building the brands we have. Polo continues to be our strongest line. Internationally, we’re now in 60-some countries with it.

So the rocky global economy hasn’t impeded your business?
BC:
Not really. Our international business has been very strong. We’ve had great numbers out of Europe and southeast Asia, and we see a lot of growth opportunity in Latin America, particularly in Brazil. The Brazilian economy is booming. It’s an amazing market. They focus on quality when it comes to kids’ footwear — they don’t want cheap shoes. So we’re going down there and setting up a full program for all our brands. We’re even looking at sourcing there.

Speaking of sourcing, how is the situation in China right now?
BC:
I have nightmares about it every night [laughs]. It’s a challenging situation and one that is constantly changing. Every day, there is a new issue. It’s getting increasingly expensive to produce there, especially children’s shoes. We have a lot of advantages being a large company with such a vast sourcing network, but it still doesn’t make it easy.

How are you managing the situation?
BC:
We’re just trying to stay ahead of the changes. We have to know what’s happening and understand that the situation is constantly in flux. It’s critical you work to build relationships with the factories and keep an open dialogue about the problems facing [both sides]. You can’t just say, “What are your prices?” You have to know your product, know your costs and be constantly negotiating. We also are diversifying and looking into other sourcing spots, such as Indonesia, Vietnam, Sri Lanka and Bangladesh. We’ve done some testing in Africa, but it is still in the embryo stage of doing business with footwear companies.

With all the rising production costs, how are you keeping prices in check?
BC:
It’s tough. We have all these costs we’ve never dealt with before. And the retailers have a problem understanding these constant price increases. But they are real; we’re not just trying to make more money. People aren’t making their margins, so it’s a difficult situation. Retailers are now looking for [their vendors] to take on more of the burden of these cost increases. So we really have to look carefully at the detailing of the product and make adjustments if it gets too costly. If we know the retailer’s markups, we know what price we need to get — that’s the goal.

There’s a lot of speculation that Collective Brands Inc. could be close to a sale. Does the Stride Rite piece interest you?
BC:
I would definitely love to have Stride Rite. It’s an incredible name. We do a lot of business with them [and] know the company very well. We can’t be one of the bidders in the situation — we’re not that big — but I’ve put out my phone calls to let people know that if they have an interest in taking on that big giant and breaking it up, we’re here and we’d like to talk.

Does BBC still harbor plans to launch its own brand?
BC:
Yes, we’re still hoping to do it. And if we do, it would be a kids’ brand, and we’d look to do it internationally, in countries such as China.

Consolidation continues in the industry, particularly in kids’. Does this hurt the market?
BC:
Look, it’s going to happen whether we like it or not. The strong are going to get stronger and the weak weaker. It’s usually an issue with management. If you have weak management, the company won’t succeed.

With the market becoming dominated by a handful of big players, can smaller brands survive and thrive?
BC:
It’s incredibly difficult to be a small independent kids’ brand today — getting pairs made, convincing people to buy your line — unless it’s a very unique, niche item. Crocs is a good example. We have people call us every week saying, “I’ve got an idea. What do you think about this?” And we look at every one of them. But unless the product’s really special and fills a niche, it’s tough for a small brand to make it.

Which retailers are doing a good job with kids’ footwear today?
BC:
Kohl’s, Journeys, Target, Kids Foot Locker, Nordstrom and Finish Line all do an incredible job. These retailers understand it, they spend the time on it. It’s a matter of focus. If you’re going to be in the kids’ business, be in it 100 percent. Otherwise, stay out. It’s a difficult business. Look at the department stores: They don’t even want to be in it.

Can you tell us more about your new retail venture in China?
BC:
We’re excited about doing retail there. They’re beautiful, modern stores in shopping malls and in shop-in-shops within department stores. We have 10 locations right now, and by late spring we’ll have 25. We’re studying every single mall that fits our brands. We have great partners who are very well financed. It’s definitely an interesting growth avenue for us.

Would you ever consider selling the company?
BC:
We have had people approach us. And considering my age, I can’t not entertain these offers. If the right buyer comes along, we’ll listen. But we’re very proud of the company we’ve built, so it would take a lot. My biggest [consideration] is what’s best for the company’s younger [management and employees]. I have to think of them, since they are BBC’s future.

And you still have no plans to retire?
BC:
Absolutely not. I always say retirement is death. I’ve still got a lot I want to accomplish.

 

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