Independent specialty retailers are critical to the outdoor space. And Lowa is working to ensure its partners in that channel stay healthy with the coronavirus crisis forcing brick-and-mortar to temporarily shutter.
Speaking with FN, Lowa GM Peter Sachs outlined how the brand is providing relief, which includes allowing them to adjust orders and drop shipping shoes for retailers from the company’s inventory, among other initiatives.
And while the outdoor market has been hit especially hard by the store closures and limits to recreation, Lowa has found success with other areas of its business — specifically duty boot business — which are a necessity for many of the people working on the front lines today.
During this uncertain time, Sachs has been a vocal leader and has shared his thoughts on where the outdoor industry will go post COVID-19. In short, he is confident there will be a silver lining of sorts, with companies growing their customer bases by re-assorting to cater to the every-man or every-woman who simply enjoys nature rather than the aspirational adventurer. Also, he has faith that products will be created for the masses to enjoy rather than the niche consumer.
Below, Sachs explains to FN how he’s leading Lowa during challenging times and the ways his company is helping the outdoor specialty retailers it works with.
Footwear News: What is your strategy for bringing your staff back into the office?
Peter Sachs: “We’re now entering our eighth week. Connecticut [where Lowa’s HQ is located] closed businesses that are non-essential. Warehousing and distribution is considered essential, and because we have some duty boot business for military and law enforcement we’ve been operating our warehouse two to three days a week. Most of our office employees have been working from home, and we expect that we’re going to operate like this until the date Connecticut lifts the stay home shelter in place orders [around] May 20. But even then, I will rotate a half staff for at least two weeks where half will come to work for a week: Half will work from home and then we’ll flip flop. I think an abundance of caution is necessary right now to make sure everybody stays healthy and safe as opposed to rushing back into everything and saying, ‘The doors are open, let’s go.'”
How are you leading and engaging with your staff?
PS: “The biggest thing that we’re doing is having our twice a day Teams video calls. It’s a Microsoft product and you can do video conferencing on it just like Zoom — you can share screens and so on. We put an all-hands-on-deck meeting at 9 a.m. and at 4 p.m. That way everybody knows what’s going on — good, bad or ugly. Those calls generally last about a half an hour, but sometimes they’ve become almost an hour long when there are a lot of questions or things to discuss. There’s nobody on my staff who is not in the loop. And it’s not me speaking, it’s them talking: What did they do? Who did they talk to? Who did we collect money from? Do we have a shipment coming from a factory? It’s honestly very little myself — other than I give them the daily financials. And then with our sales team, about every week and a half, we’re doing a Zoom call with the 20 or so [representatives] scattered across the country. And again, it’s mostly them talking — What do they see and hear in their part of the country? What are their dealers telling them? Now that we can open some doors orders and how is that affecting things?”
Several footwear brands have implemented internal coronavirus task forces. Has Lowa set up a similar group?
PS: “We don’t have a committee because of the size of our business, but we laid out a plan just before this exploded in everybody’s face and had a big company meeting and everybody asked questions then. As things have evolved there have been more questions asked in our group phone calls. I would say that everybody is 99.9% on the same page. One of the things I said to everybody in the beginning was to over communicate, under promise and over deliver. Internally, we’ve been over communicating with each other. That has allowed everybody to know when someone was sick or if somebody else had doctor appointments so that there weren’t any shocks or surprises or anything. We have employees who have kids who are learning from home, so we’ve had discussions on what’s going to be their child care afterwards. We’ve had very open discussions with everybody. That’s the committee, the entire company.”
How are you managing inventory?
PS: “Our inventory obviously is not selling through at the rate we expected. We’ve put together next year’s plan and 90-plus percent of our current inventory, we’re going to carry forward into 2021. Even if a color doesn’t go forward or something, we will carry it on both our consumer and dealer websites and we won’t put it on closeout until the sizes are so broken that there’s not much we can do about it. We’re assuring our dealers that we are going to hold the inventory and not flood the market. We’re a privately held business and we can do these things. The dealers that I’ve spoken to about that, you hear a huge sigh of relief that at least with the Lowa brand they’re not going to find a ton flooding the market. We’ve also allowed dealers to cancel and adjust any order they had on the books — no penalties. We want to be partners and this is when you define partnership. A partnership is not let’s just put it on the websites and mark it down and beat these guys up, go against their own MAP policies. Partnership is saying, ‘We’ll hold some of these things for a long time and let you keep reordering them at the pace that you need to reorder and fill in,’ which may not be the normal pace that we would have expected 60, 70, 80 days ago.”
How are you specifically helping your independent retail partners?
PS: “Eighty-five percent of them that are open are operating on restricted, buy online, pick up in store at the front door [programs] or something similar. The outdoor guys are largely still shut down. We’ve worked with them on how they can pay their bills and and handle their accounts payable. We’ve allowed them to adjust however they see fit. Now is not the time to pull out the rulebook. Now is the time to say, ‘What do you need and how can we help you?’ And if you need five pairs of boots and not the 50 that we’re on your booking order, then here’s the five. And thank you for that business.”
What is your strategy for now and the rest of 2020 to ensure business keeps moving forward?
PS: “For the immediate moment, the business is really our duty boot business in the task force category because that channel has continued to operate more or less unencumbered — mainly soldiers and cops and EMTs, they’re all working. Boots are an essential part of their gear and if their boots wear out they need to go buy a pair. We’re still shipping two to three days a week to fulfill those orders. The other part of the business is the online business, both our website as well as dealer websites, and we’re doing a lot of drop shipping right now for dealers. They may not be able to get into their store or have access to even knowing what they have in inventory but if they send us an email or call us or go on our dealer website to place an order we will fill it and ship it directly to their customer for them. And they make the sale, they make the margin. They can work off of my inventory. That way they keep their relationship with their customers. And we haven’t announced it yet but as doors open up we have a program in place for the rest of the year for our dealers, regardless of what they normally book or don’t book, to try and get them back on their feet, to try and get them back to ordering products and paying bills and servicing customers.”