Deer Stags Concepts’ Gold Rush

Deer Stags Concepts Inc. could be the master of reinvention.

Since launching 50 years ago, the New York-based firm has produced everything from Western boots and wingtips to roller skates and slippers.

Now owned by Michael and Rick Muskat, the company has found its sweet spot, catering to consumers in the mid-tier branded market. The brothers, along with other family members, are focused on two winning labels: Deer Stags, a collection of men’s comfort looks, and NoSox, a line of athletic-inspired styles for men, women and children.

“To be successful, you have to take this industry day by day,” Michael Muskat said. “You need to be flexible. The retail climate can change [quickly].”

Few executives understand the shifting speed of trends better than the Muskats. After all, their father, Jack, and uncle, Hy, frequently focused the firm’s efforts on finding the next big thing.

Novelty looks along the way have included the Nature Shoe, a negative-heel style sold through retail stores in three countries; the jazz oxford, a popular club shoe in the late 1970s; and even On Wheels, a line of skates that tapped into the roller-disco craze. And in between, the company snagged licensed properties for kids’ shoes that included “Grease” and “Mork & Mindy.”

But by the 1980s, with Michael and Rick now in charge, the brothers sensed an opportunity in the branded businesses.

Success was quickly found with Deer Stags, a name they acquired from the former Osceola Shoe Co. They also decided to formally change the name of the company to Deer Stags, from Glen Shoe Co.

“We were already making [similar] looks when [Osceola] went out of business. An account in Florida said we ought to buy the name,” said firm President Michael Muskat, noting that 2014 marks the Deer Stags brand’s 75th anniversary.

That purchase proved to be a smart move.

Today, the business is experiencing a 13 percent increase in year-to-date sales. And the Muskats have set an aggressive three-year plan for double-digit growth beginning with 2015.

According to the Muskats, the people leading the firm forward include many longtime employees, as well as family members that include EVP Rick’s children — Danny and Jake Muskat and Jeni Muskat Klein — and Darryl Hall, stepson of Rick and Michael’s brother, Steve, who left the business in 2011.

Here, the Muskats look back on the company’s hits, misses and lessons learned along the way.

Many family businesses have disappeared over the last 50 years. What’s been the secret to your staying power?
MM:
We love what we do, and love doing it together. We’ve been able to maintain the discipline to separate family and business when we’re at [the office]. Each respects the position of the others, so when a decision has to be made, there’s a real chain of command. I consider this entire company a family business — not [just] a Muskat business. We treat our people well, and they’ve been loyal to us. One employee [of 46 years] goes back to my father’s generation.

What’s the most important lesson your father taught you?
RM:
He laid out a few simple rules and principles. One said family was the most important thing. [However], the business supported the family. So if we had to be away for a birthday or anniversary due to business obligations, those came first. Like our father said to us, and we say to our kids, [working here] isn’t a life sentence. If it’s not what you want to do with your life, you’re free to leave. Conversely, if you’re not right for the company, we have to be able to say, find something else to do.

Now that the company is in your hands, what lessons have you passed on to your children?
MM:
Sales are my responsibility, and they’re all in sales. What I’ve tried to explain to them is to listen more [to retailers and buyers] than talking to them. When you make a presentation, instead of trying to sell, sell, sell, listen [to the customer] and analyze what’s said. You will hear things and find openings.

What do you consider the company’s greatest accomplishment?
RM:
The team we’ve built. The majority [of employees] have been with us a long time. We have a group who joined as part-timers while in high school and are now grandmothers. The team is terrific and enables us to do what we do.

Is there a business decision you regret making?
RM:
Not continuing the business we had developed in the children’s licensing area. We had a huge success with “Grease,” “Mork & Mindy,” “Star Trek: The Motion Picture” and superheroes. At one time, we were selling Wal-Mart, Kmart, Payless, Pic ’N Pay, Fayva, everywhere kids’ shoes were sold. While we were doing that, the jazz oxford and roller skates got hot, and we turned all our attention to those. The smarter thing would have been to step that up with a separate division and grow to be Bob Campbell, [BBC International chairman and CEO].

The company has had a range of novelty items. Which ones stand out?
MM:
The jazz oxford was the first huge item. We sold several million pairs from 1977 to 1983. We lived in Manhattan, and Studio 54 was opening. We noticed a change in the way guys were dressing — wearing bowling shirts and Capezio jazz oxfords to the club. Rick went to Crest Shoe in Maine, which made shoes for Capezio, [and asked] to have dance shoes made under our name. While Capezio was making them in black and white, we added purple and Belgian linen. We started making them in New England, then Brooklyn, then Italy, Brazil and Argentina. The next big item was the Deer Stags Times, a plain-toe oxford launched in 2001. We’ve probably sold [nearly] 5 million pairs.

You’ve changed product direction over the years. What have been the challenges that come along with switching gears?
RM:
We always had the core private-label sourcing business that started with cowboy boots and then men’s comfort dress-casuals. Then, we [layered in] the item business. The challenge was in between items — like when roller skates were getting hot and we put so much effort into getting production up and maximizing the opportunity. Then roller disco died in a 30-day period. By Christmas 1982, some of our competition decided there’s no more demand and began dumping inventory. Now, how do you replace that volume?

How has e-commerce changed your business?
RM:
Even with the biggest and best relationships we have, brick-and-mortar stores [can only] carry [so much] of our product. However, since we can drop-ship from our warehouse outside Seattle, our online accounts can show all our products. It’s a great democracy. Now the consumer gets to choose. Those retailers [that operate] both brick-and-mortar and e-commerce sites may see something blow off their websites and then put it in their stores.

Is the industry willing to take risks today?
MM:
It’s very hard to launch an item; nobody wants to try anything new. It takes a lot of money. In the ’70s and ’80s, there were tons of independent retailers who said, “I’ll give that a shot.” Today, there is a very limited amount. They want guarantees and mark-down money.

Since joining the business, what have you observed to be among the industry’s biggest changes?
RM:
The retail landscape has changed dramatically, with the shift to e-commerce changing it even more. There’s also the consolidation of retail. We used to go to any city, find a minimum of three department stores to call on, not to mention the chain operators and independents.

Since you don’t advertise, how do you market your brands?
MM:
We’ve always had entry-price [product]. You go to a store and see our packaging and hangtags — they are right up there. My concept has always been to let those [other brands] advertise and bring [consumers] into the store. Then, we start to compete. Shoppers [see] the shoe they came in for is $100, and our shoe is $90 or $60.

You moved into the women’s fashion business in 2004 with Oh Deer! Why the decision to so quickly abandon it?
RM:
We’re always trying something new and fresh in order to grow. We wanted to get into the women’s business because it’s big volume. Oh Deer! was my daughter Alison’s idea, an offshoot of the Deer Stags name. It was doing extremely well but got killed in 2008 because it was strictly independent-based and the economy tanked, [eliminating many stores].

What initiatives do you have planned going forward?
RM:
Two are on the horizon. Deer Stags is well-penetrated in the moderate sector, but not fully. It’s sold in about 8,000 doors in North America, but there are about 2,200 doors we’re not in, and we believe we should be. If you look at the growth opportunity, going from 8,000 to 10,000 doors, it’s 20 to 25 percent. On top of that, you layer the [new] higher-end Deer Stags Prime, which opens the opportunity for [stores selling] shoes in the $80 to $100 [range]. Then there’s NoSox, which is men’s and women’s at $60 to $80, sold in better retailers. NoSox lends itself to a lifestyle brand that could become global. We’ve begun registering the trademarks for various countries and just opened up distribution in Taiwan. We also have a small but growing business in Canada.

Would you ever consider selling the business?
MM:
Not if we can maintain the [business] the way we have — with our kids and [eventually their kids]. It’s about more than money. From a business standpoint, we wouldn’t be on Broadway and 21st Street. We would have moved years ago to Memphis, Tenn., or to the West Coast where our warehouse is. We chose a lifestyle that we love. The [business] has afforded us the ability to do that.

 

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