Pat Yates, president NJD Specialty Retail, Inc.
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ENTREPRENEUR PROFILE
Giant Steps Forward Since Pat Yates took the reigns, NJD Specialty Retail has quadrupled its Happy Feet locations, made huge strides in its marketing, and launched a new Animal Feet line that’s stepping up sales. Ten years ago, shoppers slipped on their first Happy Feet oversized plush slippers, purchased from a cart in Louisville, KY. Now NJD Specialty Retail, Inc., creator of Happy Feet and a new Animal Feet line, has 190 locations in 40 states and three foreign countries. The formula for the company’s success? Sticking with one thing and doing it well: marketing oversized, colorful, sneaker-style slippers with a one-inch sole that give adults and children the sensation that they are walking on pillows. “As a company, we have stayed very grounded,” says Pat Yates, who bought the company from his father, Chet, and stepmother, Sharon, in 2002. “We’re a slipper company. We wanted to make one thing and be successful at it.” When Yates took the reigns as company president, Happy Feet were sold from just 45 locations. His goal was to grow the company through improved distribution and a greater marketing effort. He has succeeded. “We were very limited in our distribution lines” just a few years ago, he explains. “We wanted to be more flexible and take a more customized approach—to cater to people who were buying smaller amounts, in addition to those buying full container loads.”
Building for the future To meet the needs of these diverse customers, in January, 2005 the company moved into a new, state-of-the-art office and warehouse in Louisville that Yates says allows NJD to provide “more consistent customer service, more variety in distribution, and more products” to the company’s customers. Yates also focused on taking the company’s marketing and advertising to the next level. Last year, NJD signed an agreement with a Louisville advertising agency, Sheehy + Associates, to develop new high-impact marketing materials. Together, Sheehy and NJD
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Continuing the family theme, pictures of Pat, Sandy and their three children appear on the “About” page. Pat discusses each family member’s interests on the page and in it he pokes fun at them, as well as himself.
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The clip was replayed on stations across the country, much to Yates’s delight. And on the TNT talk show “Inside the NBA,” basketball star Charles Barkley has worn the orange-and-blue Happy Feet slippers of his alma mater, the University of Auburn. “The slippers became a talking point” on the show, says Yates. “He kept putting them up on the desk. It was astounding.” And a marketing bonanza.
Putting family first NJD has always stressed that it is a family owned company. “People see stability in a family situation,” Yates says. “The whole family helps out in the business. People feel more comfortable dealing with family businesses.” Yates’s wife, Sandy, is a vice president who handles the finances and payables. And Chet and Sharon Yates remain involved in the business. E v e n t h e c o m p a n y ’s W e b s i t e , b u y happyfeet.com, reflects the organization’s family orientation. “Our business philosophy is family oriented, which makes us different than many wholesalers and/or Web vendors,” the site reads. “We are very close to many of our operators and their families, and we take lots of pride in that.” R E P O R T
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created a DVD presentation, narrated by Yates, that introduces the company to thousands of potential operators and mall managers across the country. The DVD is the keystone of a larger marketing package that includes more traditional printed materials. “The DVD helps put a face with our name, and it helps people understand how our company works,” says Yates. “To me it’s the most important marketing tool we have created.” Dave Carter, president and creative director of Sheehy + Associates, agrees, adding that “Pat is a forward thinker” who has “very creative ideas and is open to new ideas. He’s a very aggressive marketer, and he has his operators in mind when producing marketing materials. The DVD kit is a very userfriendly, one-stop-style descriptive tool that allows people to understand the business.” Since Yates took the company’s helm, Happy Feet’s advertising budget has increased by a whopping 800 percent. But some of Happy Feet’s recent media exposure has come gratis. In 2004, the slippers had a walk-on role in ABC’s “The Bachelorette,” when Meridith was given a pair of pink slippers with an embroidered rose by Rick, who proclaimed, “I will be with you every step of the way.”
NJD now makes about 70 collegethemed slippers and 90 standard styles. The color-combination possibilities are endless, says Yates. A pink-and-white style is the biggest seller among standard slippers, while in terms of collegethemed styles, sales often depend on which teams are hot at any given time. “This year, the University of Texas did very well,” says Yates. He notes that Ohio State, Michigan and North Carolina are perennial favorites. College slippers sell particularly well in college-focused areas, such as the Carolinas, he says. Yates likes to shuffle around in redand-black University of Louisville slippers. He is a “big fan” of the college’s sports teams, particularly basketball. “It’s not the coolest slipper,” he says. “But it’s my
Keeping operators happy While it’s always a challenge for cart operators to pick items that will move, “we have a lot of historical data to help operators decide which sizes and styles to stock,” says Yates. And if an operator
places a large order of blue slippers, but it becomes evident that green is the hot color for that location that season, Happy Feet will seamlessly stop the blue shipments and send green instead, he says. “Every mall is different,” says Levine. For instance, “for suburban malls, we order more kids’ sizes, and in urban malls, we’ll have more adult sizes.” Levine also notes that slippers in local high-school colors sell very well.
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favorite.” Employees at the company headquarters often wear slippers around the office. And why not? They’re stylish, comfortable and the boss is wearing them, too. Brian and Amy Levine operate four Happy Feet carts in Massachusetts and Rhode Island. “We don’t sell slippers; we sell fun,” says Brian Levine, who usually slinks around the cart area in blue-andwhite slippers. “It’s a great product; it’s age- and gender-neutral.” Last year, NJD added to the fun with a new line called Animal Feet. The limited distribution of lions, tigers, elephants and other zoo animals was a “rousing success,” says Yates, who came up with the idea. “I wanted to make a realistic animal slipper versus a cartoonish design,” Yates says. So far, turtles and monkeys have walked off on the most feet. The company is expanding the line nationally and increasing the number of styles from 19 to about 30. In conjunction with the animal line, the company created matching stuffed toys for a combination gift. This introduces an additional product line and opens the door for even more creative marketing. About 80 percent of Happy Feet and Animal Feet slippers are bought as gifts, and the lion’s share of sales occurs from October through December, says Yates. But some carts have an expanded program lasting from September through April. In addition to selling slippers online and providing custom orders to corporations, schools and organizations, NJD has several company-owned and -operated mall carts. But the vast majority of its locations are turnkey business opportunities for independent retailers who purchase product wholesale.
Pat Yates, President Company: NJD Specialty Retail, Inc. Headquarters: Louisville, KY Founded: 1996 Purchased: 2002 Products: Happy Feet and Animal Feet slippers Operations: Company-owned locations and turnkey business opportunity Number of corporate employees: 22 Number of locations, 2005: 190 in 40 states, Canada, Spain and England Retail prices: $19.99 standard styles; $24.99 college-themed styles Markup: Just below 300 percent Phone: 866-Happy Feet (427-7933) Web sites: buyhappyfeet.com, buyanimalfeet.com Advice to retailers: “Our product is going to produce, and it’s not going to go away tomorrow, but you must also carefully scrutinize your location, employees and mall lease.”
—Pat Yates
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NJD invites all operators to a one-day training seminar that covers topics such as selling, budgeting and operational issues. The company also provides a comprehensive training video. “Many operators are brand-new to the business, and this video shows them how to run every facet of the business,” says Yates. “We have a sales training meeting in Chicago every year, but it costs operators money to travel. They can watch this video at home as much as they want.” Levine says NJD's customer support “phenomenal.” He notes: “They make sure we get the product we need. Shipments are timely and well organized. Pat Yates is extremely driven and focused on making his retailers successful.” Happy Feet and Animal Feet slippers sell for $19.99; college-themed styles retail for $24.99. For most products, the markup is just below 300 percent, Yates says. He declines to discuss company sales figures. But the Levines, whom Yates called the top operators in the country, have posted six-figure holiday seasons in three of their locations.
Going places NJD, which has Happy Feet locations in Canada, Spain and England, is looking to continue its growth in 2006, but will concentrate on the US, in particular the west coast. “Our base is in the east. If we have a weak point geographically, it is the west coast,” says Yates. “One of our goals is to expand there.” With Yates’s energy, enthusiasm and creativity, there’s no doubt that an increased presence on the west coast will be just one of many expansions destined to take place at NJD in the years to come. And Yates will be there every step to ensure everyone’s happy. SRR
Bernadette Starzee, a Long Island, NY writer who covers business, sports and lifestyle topics, is a senior writer for SRR. She can be reached at b.starzee@att.net.
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