Trimfoot Milestone: Lessons From CEO Larry Skaggs

Trimfoot Milestone: Lessons From CEO Larry
Larry Skaggs

For Larry Skaggs, the success of Trimfoot is a lesson in diversity.

From proprietary brands and licenses to private-label programs, sales and distribution partnerships and even third-party logistics, Skaggs has led the Farmington, Mo.-based children’s firm as it has moved into new areas of the footwear business.

According to Skaggs, that versatility and willingness to chase new opportunities outside its core business has been key to the 100-year-old company’s growth in a fast-changing marketplace.

“Trimfoot is historically a baby shoe maker, but as the industry has evolved over the years, we’ve continued to adapt and adjust our business,” said Skaggs, who joined Trimfoot in 1968 and worked his way up the ranks to CEO in 1999, when he and business partner Joe Scott Jr. purchased the firm from previous owner EJ Footwear Corp. “Some of the things we’re doing today are things we never would have considered even 10 or 15 years ago. But the one constant in this industry is change, and recognizing that has been critical to our success.”

To extend its business beyond the baby category, Trimfoot in 2002 launched Dance Class, a specialty line of ballet, tap and jazz shoes, followed in 2004 by School Issue, offering school uniform footwear. In 2005, the company debuted Natural Steps, a fashion-forward collection of infant and toddler shoes.

“Being an infants’ company, you’re really only significant to your [end] customer until about 24 months of age. So developing a business in those larger sizes has been a major focus as we’ve sought new ways to grow,” Skaggs said.

Trimfoot’s 10-year alliance with industry giant BBC International has been instrumental to those efforts. Under the partnership, Trimfoot manages the sales and distribution for a number of BBC’s brands and character licenses, among them Sam Edelman, DKNY, Polo Ralph Lauren, Bushnell, Disney, Sesame Street and Marvel. “Working with BBC has provided tremendous opportunities, allowing us to significantly expand our presence in the market and open new points of distribution,” Skaggs said. “It also has had a halo effect on the rest of our business, affording us the resources to do more internally and pushing us to be more courageous in terms of developing our own brands.”

Trimfoot also has served as a sales and distribution agent for the Mia Kids line since 2007. In 2010, it signed a license with Eastland to develop comfort-driven children’s footwear, and later this year it will roll out a series of children’s overboots under a deal with Butler Boot.

Tapping a new growth avenue, the firm recently began capitalizing on its more than 700,000 square feet of warehouse space in Farmington to provide logistics services to other footwear firms. “It’s another example of how we’re trying to step out and find new ways of expanding our business,” Skaggs said. “You can’t get stuck in a rut — you have to constantly evolve.”

Here, the CEO talks about new opportunities, the changing kids’ industry and leading Trimfoot into its next century.

What have been the biggest factors in Trimfoot’s success and longevity?
LS:
Above all, it’s being flexible — identifying and [jumping on] new opportunities in the market, even if they don’t necessarily align with our traditional business [model]. You can’t expect to survive without changing.

How important has the partnership with BBC been to your business?
LS:
Working with BBC has obviously been extremely positive for us. We entered into a distribution agreement with BBC for its Disney program about 10 years ago, and the partnership has grown to include many other brands. There is no other company in the children’s market as significant as BBC. Bob [Campbell, BBC’s chairman and founder,] has a very talented team, and he has kept our stable full with great fashion brands and licenses.

Why did you choose to extend into these other areas with BBC rather than develop and license your own brands?
LS:
BBC has a lot more expertise. And, quite frankly, courage. Bob has tremendous courage in seeking out and launching new brands. It’s been better for us to leave that expertise to his team and be partners. We’ve been able to benefit from BBC’s strengths.

What new initiatives are you working on right now?
LS:
We have a new licensing agreement with Butler Boot, a Canadian company, for over-the-shoe boots done in a range of hot colors. It’s a U.S.-made program, which is interesting. The reception from the retail community has been pretty extraordinary, so we’re very bullish about that business. We’re also excited about our new line with Wendy Bellissimo, which we’re rolling out [in July] with [retailers like] JCPenney and Babies ’R’ Us. [Wendy] is a well-known name in the baby world.

What prompted the move into third-party logistics?
LS:
It’s just another opportunity for growing our business and, again, one that we wouldn’t have considered 20 years ago. We have the infrastructure and real estate, and it’s something we can utilize. In other parts of the country, real estate and labor costs are much higher. We also have the advantage of being centrally located here in the Midwest. We receive other companies’ product into our warehouse, inspect it according to their standards, process orders and make shipments. We even handle invoicing and collection in some cases.

What are some of the biggest changes you’ve seen in the kids’ industry?
LS:
The stricter product safety regulations have been a significant change, especially for a company like us [that makes a lot of baby product]. We’re much more limited in terms of the trims, embellishments and materials we can use. Also, there are certain costs that come with complying to these regulations. And you have companies that don’t always play by the rules, allowing them to come to market a bit cheaper. Another big change is how much everything has accelerated. The kids’ business is much more driven by trends and impulse items.

How has your consumer changed?
LS:
People are buying more shoes for their kids than they used to, which is obviously a good thing for the industry. And it’s interesting to see at what an early age kids begin to have opinions on what they want to wear. That’s a major shift.

Does the sourcing situation in China concern you?
LS:
Obviously, a lot is changing in China, and we’re going to continue to see price increases there. But we’re not looking elsewhere for our production. We have manufacturing plants in China that we’ve worked with for a long time. They’re good partners and we rely on them. The positives outweigh the negatives.

Trimfoot had a significant U.S. manufacturing operation until 1999. With the renewed interest in American-made goods, would you consider bringing back some production?
LS:
Definitely. We’re working on some plans, looking into things, though it probably wouldn’t be in our own manufacturing facility.

How has the shrinking of the independent retail channel impacted your business?
LS:
Our direct marketing team is in constant communication with these retailers, and we’ve certainly seen a lot of store closings. The decline is becoming very significant, and there is no question it’s having a huge impact on all of us in the children’s business. As a vendor, for your survival and continued health, you have to look at new retail avenues. I’m old enough that I would have argued online retailing would never have worked for kids’ shoes. But in fact, parents are very open to shopping online. We’re having tremendous success with our e-tailers.

Can the independent segment bounce back?
LS:
Certainly, and innovation is the key for this group. Consumers know their local boutique will offer edgier, more unique product than the department stores and chains. Independents need to play up [that strength] more than ever. They need to continue to take risks and do innovative things.

Considering the challenging climate, are there still opportunities for new children’s brands to break in and find success?
LS:
There is no question the environment is extremely challenging for new companies. It would be very difficult today to start a brand, gain momentum and capture shelf space. There are just so many obstacles. You have to have a certain amount of volume to effectively navigate the sourcing market. You need to be large enough for manufacturers to want to work with you. Still, if you have a really unique product idea or you are filling a niche, there are opportunities for newcomers.

What does Trimfoot’s 100-year milestone mean to you?
LS:
You can’t look back on such a long history and not be humbled by the fact that you’ve [had a hand in] stewarding a company that has been vital to an industry as well as to the local economy and community in Farmington. We’re very much a family organization. We have third-generation employees and people with 25-plus years of service at Trimfoot. My own daughter and grandson work here. There is such an onus to keep the company alive and thriving for the sake of your workforce, so we feel a great sense of pride [in this milestone].

What’s next for the company?
LS:
There are still a lot of growth opportunities for us to explore, and that will happen with new licenses and brands. And as I said, we’re very open to things that perhaps don’t fit our historical core business. The most important thing [for us] is making sure we remain significant in our marketplace and that we continue to adapt. We’d like to know there is another 100 years ahead for Trimfoot.