Sperry’s brand chief is on a mission to bring preppy back.
Since taking over as president in February 2017, retail veteran Thomas Kennedy has been working to steer Sperry’s product and marketing strategy into more positive sales territory by stepping beyond the boat shoe — and those efforts appear to be paying off.
In parent company Wolverine World Wide Inc.’s first-quarter results, released May 9, Sperry surprised market watchers by delivering close to 1 percent growth after several quarters in the red. Wolverine had predicted this turnaround for some time, but it came earlier than expected.
“Sperry has implemented our new brand growth model, which helped to drive better-than-expected revenue performance in Q1,” said Wolverine Chairman, CEO and President Blake Krueger, pointing to demand for a diverse range of products. “The brand saw continued strength in women’s boots, accelerated growth in the vulcanized category and very good performance in the women’s casual business.”
For Kennedy, category expansion has been a key focus. A former executive with Gap, PacSun and Fossil, he initially joined Wolverine to help shape the firm’s approach to apparel during its Way Forward transformation initiative.
At Sperry, he continues to drive change. “It’s about: How do we celebrate our heritage but expand our audience and the categories we can play in?” he said. “Five years ago, we were north of 65 percent boat shoes. We’d like to end 2020 with a third boat shoes, a third sneakers and a third seasonal footwear.”
Analyst Sam Poser of Susquehanna Financial Group applauded the brand’s diversification efforts but questioned its expansion strategy. “They own the boat shoe business, the CVO business is steady and has had some good pops, and they’ve done a good job with boots. But beyond that, it’s hard for me to see where Sperry can hang its hat and stand alone in other categories,” he said.
In recent seasons, the company has struggled against the dominant athleisure trend. Kennedy said the brand won’t fight the headwinds but will learn from them. “There are attributes the customer expects from sneakers now,” he said.
Vulcanized sneakers have been part of the Sperry line since 1935. But for spring 2018, Adam Meek, senior vice president of global product, tweaked the collection to improve comfort by softening the heel construction and adding removable insoles.
Kennedy said the athletic industry has also “taught us about the wonders of product launches. You need a new story almost every month. You have to think every month: What does the consumer want to buy today?”
To create a framework for those communications — and drive consumer attention to the updated product line — Sperry launched a global brand campaign in spring 2018 called Prep for All. Developed by advertising firm Droga5, it introduces a youthful and all-inclusive narrative for the brand, illustrated in a series of cheeky short videos showing the rules of Sperry’s Guide to Preppy. For instance, the video of Rule No. 2 (“Acquire a prizewinning horse”) cuts to a woman riding down a country road on a motorcycle.
“We have [customers’] affection and fondness, but we’ve got to create a better call to action,” said Kennedy.
The campaign is appearing in retail stores and in brand advertising but, most important, online and in social media. Kennedy noted that the Sperry customer is digitally savvy and that a third of the company’s wholesale shipments go through a digital portal, including pure-play online retailers such as Zappos as well as Nordstrom.com, Macys.com and others. The brand’s own e-commerce site presents a strong growth opportunity: In the first quarter, sales on Sperry.com were up 35 percent.
However, Kennedy remains committed to the full range of the brand’s retail partners, from department stores and family retailers to specialty shops. “You have to engage with everybody, but you have to put your arms around the accounts that have a strategy that aligns with yours and that understand your consumer,” he said.
Heading into the second half of the year, Sperry’s parent company is upbeat. “We expect growth to accelerate over the balance of the year, including strong performance from the women’s category,” said Krueger. “We now believe that the brand will deliver low single-digit growth for the full year.”
As for Kennedy, he has a more philosophical outlook. “My job is to write a chapter in the history of this brand, and the best way I can do that is to listen to my constituency, which is my consumer, my wholesale partners and my employees,” he said.
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