When Skechers USA Inc. signed rock legend Ringo Starr as a brand ambassador in October, it was music to investors’ ears.
The buzzy move was the latest in a string of celebrity endorsements that have helped fuel record sales for the Manhattan Beach, Calif.-based firm.
Indeed, in the most recent quarter, Skechers reported revenues of $674.3 million, the highest in its 22-year history. Sales are on track to hit $2.35 billion this year, according to experts polled by Yahoo Finance — that’s a 27 percent jump from last year’s $1.85 billion.
“The key to [our] growth is [twofold],” said Robert Greenberg, Skechers’ chairman and CEO. “It’s marketing and right-on, relevant product. When you’re relevant, you’re hot. When you’re not, you’re not.”
A combination of savvy marketing and trend-right product certainly has Wall Street impressed. The company’s stock has risen more than 77 percent since the start of the year.
Among Skechers’ biggest successes of late are the girls’ fashion brand Twinkle Toes, which has spawned an array of licensed products, and Relaxed Fit, a line aimed at active consumers. The GoWalk line also has performed very well. So well, in fact, that the company has found itself filing lawsuits against Fila and Reebok for patent breaches of the design.
A steady stream of diverse product innovations is driving the company’s success, execs said. “We have fashion-forward, technical-
athletic and ath-leisure [lines],” said David Weinberg, CFO and COO. “It’s not about one item as it may have been in the past; it’s about covering many categories and demographics.”
Greenberg noted that the Skech-Air athletic line, which launched in 2013 and expanded globally this year, was the biggest surprise of 2014. “The product took off fabulously in the children’s and adult markets,” he said. “When you get something and you experiment with it and it really works, you feel good. We try many things that work nicely, but when they really work, it’s a different story — like GoWalk.”
Beyond merchandise, Skechers has proven to be a powerful marketing force, known for its innovative ad campaigns and star-powered roster of endorsers. This year, the brand signed a number of famous faces, including recording artist Demi Lovato and baseball great Pete Rose.
“[Skechers] deserves the admiration they’ve worked so hard for,” Rose told Footwear News. “It makes me proud to be part of another winning team in such a competitive business as theirs.” (See the sidebar for a full list of Skechers’ new pals.)
This year, the company even showed a knack for turning misses into major hits. Although California Chrome, the thoroughbred it sponsored in the Belmont Stakes, lost the race, nearly 400 TV stations picked up the story, generating priceless publicity for the brand.
Experts said Skechers’ significant investments in marketing have paid off in a big way. “It’s not just about the product, but how they market it,” said Danielle McCoy, VP of equity research at Wunderlich Securities. “They have one of the most powerful multidimensional marketing approaches in the industry. Even when sponsoring California Chrome, it was about having the Skechers name out there. They’re aggressive, and it works.”
McCoy added that while it can be difficult to be all things to all people, Skechers manages to court the entire family with affordably priced footwear that bridges a variety of categories. The brand has carved out an especially strong niche in the casual-comfort segment. “When they [incorporate] comfort, it’s across [all] categories, not just running shoes,” she said.
Ultimately, though, the consumer validates the brand’s relevance. At Famous Footwear, Skechers has been a top seller season after season.
“The company has invested and worked hard to find new technologies and innovations that bring the customer added value from a comfort and function point of view, but always with a great eye on style and fashion,” said Rick Ausick, division president of the family retail chain. “They have energized the sport business with the GoWalk concept, delivering a great customer experience with a strong price-value proposition.”
Finish Line has seen strong sales from the brand at its Macy’s shop-in-shops, especially the Go collection, which got a huge boost when endorser Meb Keflezighi won the Boston Marathon in April. “Skechers’ success starts with having product that’s extremely comfortable, on-trend and priced right,” said Ronnie Jefferson, VP and DMM of Finish Line at Macy’s. “As they continue to sign athletes such as Meb Keflezighi, Skechers has begun to attract a consumer who may not have given them a shot in the past [with] performance product.”
For Skechers, fostering long-lasting relationships with retail partners is a top priority. Last month, the company held three weeks of meetings with some of its largest customers.
“We worked with them to plan the second half of 2015,” said President Michael Greenberg. “[Our partners] are planning for double-digit growth [next year]. Domestic wholesale is an opportunity to continue to take over more shelf space.”
Still, Skechers remains committed to growing its own network of stores, as the locations provide an opportunity to present a complete brand experience. “Opening stores makes the brand truly visible in the consumers’ eyes. It’s a living, breathing catalog,” Greenberg said.
The company’s 1,000th door opened last month, but Greenberg boasted that the brand has only scratched the surface. “We should have 3,000 stores,” he said, pointing to the company’s growing international presence in countries including Zimbabwe, Vietnam, Vietnam , Uruguay, New Guinea, Namibia, Nepal and Malta. “There are amazing places where we have stores. We’re everywhere. It’s the fun part of the story.”
Robert Greenberg said the brand is committed to embracing its globally connected consumer base. “Years ago, when you got off a plane, you could tell where you were by the way people looked,” he said. “Today, you can’t tell at all. [We] just try to make the planet happy with nice shoes.”