Heelys is on a roll. Four years after its acquisition by Sequential Brands Group, the once struggling wheeled-shoe brand is back on track and logging impressive sales gains, thanks to fresh styling, expanded retail distribution and a savvy social media strategy. Sequential’s licensing partner, BBC International, which oversees the footwear business globally, has been instrumental in the turnaround efforts.
“What we’ve been able to achieve so far with this brand is amazing,” said Seth Campbell, VP of international sales for the Boca Raton, Fla.-based firm. “I can’t share specific numbers — we’re a privately owned company — but it’s staggering. Just go to any mall around the country and sit on a bench for 15 minutes, and you’ll see a kid in Heelys.”
Still, Bob Campbell, BBC’s chairman and CEO, said it took a tremendous effort to right the ship, considering the brand’s rocky past. After exploding onto the scene in 2000 and riding high with a hot IPO in 2006, Heelys began to falter in the face of safety concerns, sagging sales, inventory issues and falling share prices. By the time BBC took over the license in 2013, the business was in disarray.
“It was just a disaster. We inherited hundreds of thousands of shoes that were sitting in warehouses around the world, so we slowly cleaned up the inventory and put out fresh new product lines for kids,” he said. “Since then, we’ve seen strong gains each year, and our sales projections for the next three years are even more aggressive. Heelys is now one of the top brands in our portfolio.”
Most important, BBC worked to convince retailers to take a second look at a brand that many had been burned by in the past. “Retailers have long memories, and there were some bad feelings out there,” said Keith Rubin, BBC’s SVP of sales. “We had a lot to overcome.”
Chad Wagenheim, EVP of strategic development for Sequential, said BBC’s involvement has brought credibility to the table. “We had to start fresh and repair key retail relationships. BBC has been a terrific partner. We work closely with them on all facets of the business and consistently rely on their expertise in sourcing, product development and sales.”
Today, Heelys is back on the shelves of major chains such as Journeys, Famous Footwear, Shoe Carnival, Macy’s Finish Line, Shoe Show and Big 5 Sporting Goods, as well as online at Nordstrom.com and Zappos, among other sites. The independent segment is also picking up momentum. “It took an extra year to get that channel back on board, but it’s probably the biggest growth driver for us,” Rubin said. “Once those stores start coming back, you know you’re hot.”
Considering the unique nature of the product, BBC believes it has only scratched the surface of new opportunities. “The amazing thing about Heelys is that it can sit in so many different types of stores: sporting goods retailers, toy stores, athletic and outdoor shops, mom-and-pops, department stores,” Seth Campbell noted.
Rubin said one of the biggest factors driving the brand’s resurgence is the bold fashion approach that BBC has brought to the shoes. “You have to understand that Heelys’ previous owner was basically a toy company, making the same handful of styles year after year,” he explained. “We’re a footwear company — this is what we do.”
Heelys now turns out three new collections a year, each featuring as many as 80 different styles, from classic skate shoes to fashion joggers and high-tops. The product — which retails from $50 to $65 — is loaded with trendy design details such as colorful prints and graphics, glitter effects, novelty materials and even lighted technology. In addition, the collection now includes more gender-specific styles, a change that has helped grow the girls’ business by more than 20 percent in the U.S. BBC’s design team also significantly lightened up the once clunky shoes. “We modified the molds, reducing the weight by 40 percent. It’s been a game-changer,” Rubin said.
At Famous Footwear, the revamped product is driving strong sales, particularly on the West Coast, according to SVP of buying Dan Tea. “BBC’s design team is always looking for exciting and innovative ways to evolve the shoes through color and materials. They’re focused on fresh ideas that are trend-right and imaginative,” he said. “They’re also doing a solid job positioning the brand to resonate equally with both genders.”
While Heelys’ U.S. business is rebounding, international markets continue to account for the lion’s share — roughly 65 percent — of sales. The brand is now sold in more than 70 countries, including the U.K., Australia, Mexico and Canada. South Korea — once one of Heelys’ largest markets — rejoined the roster about a year ago, and already the business has grown 500 percent there, according to BBC execs. BBC also has its sights on China and is currently seeking a partner there. “China is our next big opportunity,” Seth Campbell said.
To keep the momentum going, Heelys has stepped up its social media presence to build awareness and connect with consumers. The brand works with more than 100 online influencers who post about the shoes and engage with fans, and it is frequently contacted by celebrities, whether to design custom shoes for their kids or to create special styles for their music tours. “We develop 360-degree marketing campaigns across all platforms, really targeting our core demo,” Wagenheim said. “Right now, we’re looking at several exciting new opportunities, including virtual reality.”
With the shoe business back on solid ground, Sequential is also exploring possible brand extensions. “Footwear will always be the cornerstone of Heelys, but we certainly see opportunities to expand into complementary categories in the active world, such as apparel and accessories,” Wagenheim explained.
Seth Campbell, likewise, is bullish about the brand’s long-term potential. “Heelys is special: It’s one of those innovations, like Velcro and lights, that has shifted the kids’ market. We’re excited about the opportunities ahead.”