P448 is having a dramatic growth spurt.
The made-in-Italy luxury sneaker line, led by industry veteran Wayne Kulkin, recently shared with FN that its U.S. sales have doubled year-over-year, and it has also seen success in Asia and Europe, despite COVID-19 challenges.
Like many brands connecting with a more home-bound consumer base during the pandemic, P448 benefited from a surge in its digital business, which has increased six-fold, according to Kulkin.
“In the first quarter [of 2021], we’re still up 150% [digitally] in North America and we’re up 100% in the EU,” said Kulkin. “You have to keep that growing because that’s the only way to build brand identity.”
In October, Kulkin took on full ownership of P448 through his StreetTrend LLC firm in a joint venture partnership with the financial services and brand investment firm Hilco Global, after acquiring a 30% stake in the brand from NoThanks SpA in 2018. Prior to that, Kulkin served as P448’s exclusive distributor and marketing partner for the U.S., as well as Canada, Mexico, China, Hong Kong, Macau and Taiwan.
With the business now under his control, Kulkin is looking to pursue a more-streamlined approach.
“We want to attack each market with the same disciplines, the same kind of digital acumen,” he said. “By controlling all of the shares, it afforded us that ability to invest in that and not take a [separate] European approach, an American approach or an Asian approach. Also, from an aesthetic standpoint, we can create key items that could be similar in all markets.”
P448 specializes in luxury sneakers for men and women, with a $275-to-$325 price point. In Europe, the label’s business leans toward the men’s category, with a 60-40 ratio. In the U.S., meanwhile, P448 is 70% women’s and 30% men’s.
Kulkin said he aims to keep sales on the uptick by controlling markdowns and focusing on full-price selling. To that end, product extension will be key: Children’s shoes, sweatpants and sweatshirts will launch next, to complement P448’s collection of low-top, high-tops and pool slides.
Another important piece of the brand’s full-price strategy is sustainability. Kulkin is looking to expand his eco-friendly offering, with a goal of having it make up 30% of the business. Currently, P448 offers sneakers made from Re:new leather, which reduces environmental impact by 80%; as well as a vegan line; and its Evolo collection featuring recycled suede uppers. Though SKUs are currently limited, Kulkin said about 40 more styles will be added to the assortment by August.
“[Being sustainable] is one way to get the consumer interested in the product,” he said. “We think that’s also how you build a regular-price business.”
Kulkin added that focusing on full-price selling allows brands to be more selective with retail partners.
P448’s current wholesale strategy includes major retailers such as Nordstrom, Bloomingdale’s, ShopBop, Revolve, Printemps, Luisa Via Roma and La Rinascente. Kulkin is also targeting independent retailers as he banks on their resurgence following the pandemic.
“We know right now that in the Southern part of the country, in Texas and Florida, the consumers are coming back out to the stores,” he said. “It’s only a guess, but the trend so far is that the store business is going be the next thing. The independent retailer has a chance to flourish in this new environment because everybody just wants to get out, have the ability to dress up and talk to people.”
Kulkin pointed out that P448 has a robust open-stock program, which proved to be very beneficial to wholesale partners during the peak of COVID-19.
“In our warehouses, both in Italy and in New York, we have a massive amount of stock and we try to be nimble for our partners to have product available to ship. We are taking the traditional seasonality and throwing it out the window,” he explained, adding that new product becomes available on a monthly basis.
And when it comes to old inventory, Kulkin remains disciplined: Instead of flooding the market and selling to off-price channels, he would rather give the product to charities than take on excessive markdowns.
“You need that brand discipline because otherwise markdowns becomes perpetual,” he said. “There’s a time for sales — you can’t deny that — but it shouldn’t be 365 and it shouldn’t be with everybody all the time,” he said. “The biggest dilemma that brands have is [deciding] how low is low and how much inventory can you have. Once you crack that 50% markdown rate, then you take away the value of your product no matter what zone you sit in.”
Looking ahead, P448 remains bullish on brick-and-mortar, despite the fact that its only branded store, in Milan, remains closed and may not reopen. However, in the next year, Kulkin aims to debut seven pop-ups shops as real estate continues to become readily available.
In addition, the brand is focused on creating a streamlined customer experience online by hiring new talent on the digital and marketing front.