Rack Room Shoes CEO Mark Lardie On Growing The Company’s Athletic Business

Rack Room Shoes is thinking bigger.

The 90-plus-year-old family-footwear retailer, which acquired Off Broadway Shoe Warehouse in 2002, has been increasingly focused on expanding its footprint — from going deeper into certain shoe categories to accelerating door openings and fine-tuning omnichannel initiatives.

President and CEO Mark Lardie said when the firm launched its e-commerce site in 2014, ramping up Rack Room’s presence in the athletic space was the next natural step in a plan that has been several years in the making.

“Four years ago, when I started [as CEO of Rack Room], we started really talking about how we were — in our customers’ minds — her athletic authority,” Lardie told Footwear News. “The most logical thing, once we perfected our e-commerce site, was to roll out an athletic shop that allowed us to demonstrate that authority position.”

The Athletic Shop Rack Room Shoes
The Athletic Shop Rack Room Shoes.
CREDIT: Courtesy of Rack Room Shoes.

Lardie’s added emphasis on the athletic market seems to make sense as more and more analysts laud the space and the strength of the athleisure trend in an otherwise challenging retail landscape.

Lardie said six to seven months of planning and a couple of executive changes yielded The Athletic Shop, a shop-in-shop concept launched this spring in all Rack Room Stores and on its e-commerce site.

Here, Lardie talks inspiration, transformation and future plans for the concept.

What executive changes have you made for the launch of The Athletic Shop?

ML: “The key commitment for us is Adam McDermott’s move into the marketing group. Adam was our senior assistant in our athletic buying world, so he had great relationships with our athletic brand partners, he understands the product specifically, and he has a real understanding of our customer and how she relates to our athletic position. So by moving him out of his buying and merchandising role into a marketing role, he brings all of that hands-on knowledge about the product and the customer’s interaction with our product into our marketer’s world. As [the team] is dreaming of the ways to connect that product to the customer, we’ve got Adam on the ground now to connect those dots for them.”

How have you transformed the stores and your website to accommodate this concept?

ML: “We have re-engineered our brick-and-mortar stores so that the athletic product is grouped and merchandised in a more effective manner. The floors are reset, the graphics are in play, and we’ve already made a couple of changeouts, so it’s progressing really nicely. From a digital standpoint, we’re there. We’re communicating consistently, there is a landing page associated with it, there is messaging that goes out with it. But, for sure, [this] is an evolutionary process, and so all through 2016 that will continue to richen and improve.”

Are you adding new athletic brands to your product mix?

The Athletic Shop Rack Room Shoes
The Athletic Shop at Rack Room Shoes.
CREDIT: Courtesy of Rack Room Shoes.

ML: “We’re not adding a bunch of new [brands or people] to the mix. The real issue is to be more consistent in our communication strategy around [The Athletic Shop]; to have a more robust in-store experience around our athletic product; and to more closely link with our athletic brand partners — so that when they’re telling a specific story in the marketplace that it shows up inside our store in a better fashion. It’s all of those 365-degree connectivity points that we’re ensuring we touch all the time with our athletic shop.”

How are you using omnichannel to drive the performance of The Athletic Shop?

ML: “Rack Room Shoes has been an athletic authority for our customer for a long time. But what our omnichannel approach to the business has allowed us to do is really take that connection and authority position with our customer in athletics and expand it. So however [our customer] touches our brand and whenever she wants to shop for athletic shoes or think about athletic shoes, we can direct her into our authority position.”

Are there plans underway for more acquisitions or other expansions?

ML: “We’ve been reasonably open around the fact that we have a shared service retail platform that has a lot of room for expansion. By supposition someone might connect the dots and say it would be logical if [we] bolted on an athletic specialty group at some point. With regards to our chain, we think this is the cornerstone move that we’ve made in terms of enhancing our position in the athletic world.”

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