A Million Ways to Sell a Comfort Shoe—Take a Page Out of Kanye’s Book

Jesse, how are you doing?

Hi. This Chris?

It is.

How's it going?

It's amazing. Tell me about your business and your question.

Okay, you know what? It's. It's actually not my business. I just took the role as head of brand and design for a footwear company.

For what kind of company?

Perplexity. For a footwear company.

So, like shoes?

Yep. Okay, so my. I have about 15 years in footwear and this is a total stump to me because it's 100% manufactured and sold in the USA.

This company started back in the 70s. It's family owned and they've. Chris, I've never seen brand loyalty like this in my life with from Coke to nothing. People come in, they sit down, they say, I want this. The same thing they have on their foot, and they buy the same one. My job as that customer is kind of, let's just say, went into the grave, literally, is to revamp, rebrand, and, you know, start this over again. Either come up with a new brand or refresh this one. The problem is we're packed to the guilds with inventory and they've never had a sale, refused to have a sale, and don't want to sell internationally. And our prices are through the roof. So it's a little bit of a stump.

What is the price point?

A sneaker, let's say, like just a sneaker, starts at about 180 because it's, you know, all US leather, US made. It's really tough. And they've set a challenge to me to get them into.

The running market and things like that. Man. It's.

Not only is USA made, I'll be honest, it's a little trickier. We don't have all the tools at our fingertips, but it's also an uphill battle with marketing here. I'm just not sure people care if it's made in the US or not. If it comes to price and performance.

Well, that's okay. So it's sneakers. What other kind of shoes are you selling?

Casual comfort, dress sandals, pretty much everything but rain boots or military boots.

What's your number one selling shoe?

Number one is comfort category comfort. But for now, it's become more of an elderly shoe. I mean, we're talking like twin Velcro to bungee lace up. I mean, these have really supported that older customer.

Like, is it covered under Medicare?

Some are, yeah. And we've. We've sort of tapped that market. We've expanded into doing some military projects and things like that, which are helping because, you know, another job is keeping these people employed in these factories. So we're doing a great job bringing in other brands, but it's not as lucrative as it once was.

We have just over 100 stores. We sold over 200 stores.

So your, your revenue is declining.

Revenues in the last five years is 50%. And probably over the last 20 years it's 10% of that. And we're just under the $200 million mark.

Okay.

Okay, so you're selling sneakers, you're selling dress shoes, and you're selling comfort shoes. So why does Nike not sell comfort shoes and dress shoes, do you think?

Well, they, they know. Yeah, I definitely see what you're getting. They know, they know their role. And they, they didn't start with their own stores. Right. I guess we all know the story of Phil Knight, where this, this company.

Let's just talk about the Internet, the psychology of a buyer. Right? So you don't just psychologically, you want tennis shoes that are performance based. They're going to make you faster, you know, support your foot in a basketball game or, you know, whatever it is. But tennis shoes are for performance, right. Then you go to dress shoes. Those are for looks. And they're not so much for performance. They're actually less comfortable, but they're for a look. And then you have the comfort, but you have, you're serving three different demographics and they're all very well is comfort.

We hope that the same demographic comes in and we give them something that.

We'Re much wider. There's a lot more toe box space. It's a total comfort brand. I mean, we're definitely not performance. We wouldn't compete with anyone else. And Chris, if I was to show you our dress shoes, you know, they're not walking down a Runway anytime soon. They're much roomier, let's say, for, you know, potential foot issues, things like that. So they've stayed in their lane somewhat in the comfort area. But I do see what you're saying, that they have branched out in different know, categories of footwear.

Okay, so let me, let me ask you another question. How is Adidas catching Nike right now? What are they doing strategically?

I would say faster than market. And they're implementing some very, very, very. I mean, their marketing stories are beyond. I mean, I, I just think they're doing a phenomenal job and their product has always been better. I just think they're doing a better story or a better job at the story.

But isn't it driven by celebrities? Like, isn't it Kanye Yoshimoto Rick. Rick Owens, like.

Yep. Yeah. I think they're doing a great job with that.

Could they have done it without that?

How would they have done it?

No. Could they? Because I don't think they could have.

No, I don't. You're right. And I think companies like Nike, you know, having worked at a few of these big brands.

We always watched the Under Armours and things like that and looked at some of the research done behind the scenes by the bigger brands and they sort of sat back and watched and said, let them get one Tiger woods mishap or, you know, celebrities go off the rails and their brand is over. So, you know, harnessing somebody like Kanye, I wouldn't say it was a loss by Nike to loosen, although it looks like it. You never know what he's going to do next. That could just fail. So it's a little bit tricky with those kinds of things.

Wait, do they have to give back the billions of dollars they've made off of Yeezys? If Yeezy ends tomorrow, do they have to give back the billions that they've made in the last four or five years?

No, no, it's more of what was. Would be future projection. I mean, the Tiger thing was pretty tough and I think that's what put a bad taste in Nike's mouth. I'm all for it.

Jordan didn't go down. They had Jordan.

He was reasonably well behaved prior to.

No, but Jordan, transparency, Air Jordan sold, sold very well during all that. So.

Right.

Not, you know, Tiger. Yeah, but that wasn't, that wasn't their sales. That was just a part of it. And so what? That hurt their golf division more than anything. Right. Because they stopped making clubs and all that. Which, which was that to my point more too was I don't know that they needed to get into golf. I didn't. I don't know that they needed to get into golf clubs. I didn't, I didn't think that that was a natural extension of shoes. Like, you're always better. So then back, back to your. Your question. So who would be if we took the comfort part of the business and we were going to have a celebrity endorse it.

Who would the celebrity be that's the, the perfect.

Model for that older clientele? Who would the celebrity be?

Well, so the older clientele, I'll be honest, is 70 plus. And they're simply just not. I mean, that's why they're. The company's bringing in guys like me and I'm on the phone with you. I mean, These are the kind of opportunities we look at, right?

So Tom Jones.

Tom Jones, Betty White.

Okay, so what's wrong with that?

Things like that, that speak, I mean, we've reached out. These are things that we're going down the path. It's, I guess it's the duality of keeping what's left of the business moving right and selling without doing something too fresh. Cause I would love to come in and say gut the stores, revamp, rebrand, start over, but that's not exactly. I don't know, I was just trying to get your thoughts on a couple things you said have really sparked some interest. I mean, I do like where your head's at.

The second thing I'm gonna say is it's a design driven industry right now. Everything is high design. Like, it's unbelievable. Some of these sneakers, like I was in a Y3 and I'm a huge Yoshi Yakimoto fan. I buy his clothes. I'm a huge Y3 fan, which is his collaboration with Adidas. And I'm in the new Y3 store here in LA and I, I'm looking at these shoes and I tell the, the manager in the store who, you know, they, I used to go to the Y3 in Miami all the time, so they know me and they, they would send me like, hey, here's a new catalog. Tell us what you want. Because I buy that much of it. And he, he says to me, here in the store here. He moved out from Miami. Kind of knew who I was. I said, hey, these look like I could run really fast in these. Like I'd, you know, add some speed to me. And he goes, those aren't sneakers. And I'm like, no, they are sneakers. And he goes into something that, no, they're not for running. They're, they're something sneakers, which means something of there for looks. But there's no, they're all show, no go, basically. I forget what, what he said, but it's, it's so over. It's so, so over designed right now. Why don't you, why don't you get yourself some hot shot designer out of NYU Fashion.

Institute and.

Let him revamp some stuff and, and get that younger demographic. It's designer driven and it's press releases about who your new designer is and it's their lifestyle and.

You know, that sort of thing. But what about getting, you know, have you read the thing, how Kanye finds his designers? Like, like there's one school that he goes to and yeah, that's my college.

That's where I went.

So, yeah, if you're an alumni, why don't you go back and find yourself the top of the class and pay him to come in and revamp it, reimagine it.

I love it. This kind of invigorates me. I mean, this definitely invigorates me a little bit to jump back into this. I worry a little bit that when grandpa comes in and tries to buy his old shoes, we're going to scare him away. But I think we got to find a different sales channel altogether.

I think you just go after it. You roll that off as another company.

I think so.

I mean, there's. There's a. There's a reason why.

There. There's. Yeah, I just. I think there's a reason why Nike's so successful. And your, Your sneaker, whatever the performance side is, the younger demographic is a different brand. You got to name it something else, but you have the infrastructure to launch it. And it doesn't mean you can sell them in that store. You can cut the stores in half.

Right. You know, we just hired the. He starts the first of November, the head engineer for Y3. So I'm on the. We're on the right path.

Why are you doing that now? Now the Y3 stuff's gonna be.

No, I'm joking.

No, no, no.

Yeah. So the head. The head engineer of Y3.

Yeah. Developer material. Developer engineer for Y3. Yeah.

Well, I. I don't know if you're a fan of Y3, but they're definitely. Whatever he was doing, he was pushing the envelope, like clothes and shoes and. Why don't you go into. Why don't you go into clothes for the comfort crowd.

You know, And I. I wrap my head around what is comfort today. You know, comfort's Netflix and Chip. What are the terms of what's comfortable? Right? Like, what does that even mean? And this company did such a great job in the 70s of saying, hey, you know, there's no Internet. We're the only store in town. They invested their money having a place where you come in and get a shoe for the wedding or whatever. You were cutting the grass, whatever you had, and they carried Chris. It's insane. I'm telling you. I've never seen anything like this in my life where the customer just comes in, sits down, wants the same damn thing. If we could catch that same kind of thing the same way, you know, I was at Converse when the purchase. And I watched that process all over again. They're going to carry that truck person right into the grave.

But that's not scalable. Trying to do that's not scalable. No. And it's the Cadillac. That's what killed Cadillac is their customers were killed today. Right. And so you got to go young and then go wide. Go wide with the comfort and niche it and then go start another brand and go young and literally cut the stores in half if that's what you have to do. There's no reason you can't do that if you already have a couple of leases. Just literally cut them in half. But when you said the, the head engineer from Y3, I mean he's making clothes and their clothes match the shoes and so there's an automatic. He would probably understand that more than I. Oh yeah. Oh God, I'd love to have lunch with him and pick his brain because it's genius what they did. And it's, you know, it's Geni is how Adidas gives them the leeway to do what they want. Like Rick Owens too. Like the Rick Owens stuff. Like I'm wearing these Rick Owens boots right now that are just insane. Like it's just insane. What, what? How Adidas lets Kanye and, and Yoshi do what they want to do, but still controls it enough that they can mass, you know, mass produce it.

Yeah. On average, if you're going to open a full size, run a tooling. I'm not sure the numbers on the Rick owens or the y3 if it's, if it's a break even or whatnot. But Adidas sees it as, hey, you know what, as long as our name is attached to this Y3 or this Rick Owens, we're going to sell a lot more barbecue shoes to dad. If we're cooler, you know, they'll push a lot more Stan Smith to push a lot more basic.

Oh, just the traffic they get to their website for Yeezy and all that.

Totally.

I mean if you go to it, they'll have a little easy stuff on there, but not really only enough to get you there and then they're trying to sell you the other stuff. It's just traffic. Like it's a great traffic builder and it's, you know, it's one thing we don't have. No, it's what I'd go hire that designer that can, can do that street wear thing. So much money in that. But that I would love, I'd love to hear, you know what, what you come up with and how you engineer this sounds like fun. This is the kind of stuff that I live for. I wish I could trade places with you.

Yeah, I get. You know what?

I get addicted to the fix.

Well, I'll be happy to share any of this with you offline. I'll send you what we're doing, or if you ever want to check it out, backstory tours, the whole thing. There's a couple hurdles I'm looking at with Made in America, but.

Not quite as easy. I think our Y3 friend that's joining is going to find out. Not quite as easy to separate across all of Chinese and Vietnam. And, you know.

You'Re handcuffing him a lot. But get Trump to wear a pair of those old ones. Whatever the brand is Made in America. Because I don't think Made in America matters that much either.

I don't. I'm with you. I'm with you. You know, I'm looking. I'm looking forward to revamping this brand. I think it's a great opportunity. It's something I just wanted, you know, the feather in my hat.

And hey, would the owners. I got another idea. Would the owners be upset if the other brand you start wasn't Made in America?

They originally, you know, I'm three months in, so I'm kind of like sitting back figuring out what all the machinery we have, our capacity is. I'm still, you know, working out all operations, figuring out design budgets, all that, but I'm looking at the history. And they dabbled before with the current brand in different countries. Now I know we make some shoes in Italy because they. I'm not. I think it's just a pet project for them. They have a friend there.

Trip to Mexico this weekend to check out some factories in Leon. That's sort of my backyard, you know, my. My past and the new brand. I mean, they have a couple in the store that they've tried at the lower end with sandals. They weren't very successful. So I don't know if it's a.

I would say this entire company, and I'm sure your friends like this. This is a hobby for this family. So as much as it means to me, it may mean.

Significantly less to them in making these kind of moves, but.

I think it could be a go. I think if it's worded correctly and the opportunity is there and it, you know, keeps the initial brand image safe to them and sacred. I think it would be okay.

Yeah, that might be the. That might be the move is just start another brand for that.

I like it. That's a great idea.

Go old with the other one and go young with the new one.

Awesome. Jesse. Well, thank you so much. Please hit me offline.

I'd. Oh, thank you. Yeah, that would be awesome. I'll talk to you soon. Take care.

Bye.

Thank you very much for your time.