7 minute read
To the Max
THIS BRAND IS on fire
Hoka, a division of Deckers Brands, eclipsed the $1 billion annual sales mark in 2022. For the first three quarters of 2002, the maximal cushioning brand only picked up steam as the year wore on. Net sales rose 54.9 percent to $330 million in Q1, followed by a 58.3 percent jump to $333 million in Q2 and a meteoric increase of 90.8 percent to $352.1 million in Q3. Not bad for a brand that amassed just $2 million in sales when Deckers acquired it in 2012 and hit a mere $350 million in 2020.
What is fueling this epic run? For starters, Hoka has expanded well beyond its original core audience of ultra-marathoners, who became disciples of its max-cushioning technology at a time the industry had gone minimalist mad. The collection has since expanded into trail running, hiking, walking, and even weight lifting styles—proving its maximal midsoles have many applications and broad appeal. Consumers are buying into Hoka’s design premise that more cushioning helps prevent repetitive impact injuries that enables them to keep doing the exercise activities they enjoy. Plus, the shoes just look funky, in an over-the-top, techy way—and that hits on the old sneaker market adage: bells and whistles sell.
“Hoka looks really fresh and new in the market,” says Matt Powell, an advisor with Spurwink River, a retail consulting firm. “The big brands all look tired. Consumers want uniqueness and freshness, and Hoka checks these boxes.” Even in the face of strong economic headwinds and an overall athletic market malaise, Hoka raced forward. But that was of little surprise to Powell. “Consumers have consistently shown that they will buy products that are fresh and unique,” he says.
“It really was a very good year for Hoka,” affirms Colin Ingram, vice president of product. “Our last quarter of 2022 certainly was cause for celebration, and while our product is at the heart of what we do, the emergence of the brand itself has been the over arching accelerator of sales.” The exec points to investments in athletes, events, and brand marketing as reaching more consumers who were able to learn about the Hoka’s unique attributes and what the brand stands for. “Last year was a tipping point to where you increasingly saw Hokas being worn across a broad array of demographics,” he says. “People are understanding our value proposition, and that our values that have resonated in the core running, outdoor, and triathlon communities also resonate globally.”
Lester Wasserman, owner of Tip Top Shoes and West NYC in Manhattan, reports 2022’s Hoka sales were at another level. “We’ve been selling Hoka since 2015 and sales have grown steadily, but the growth since 2021 and, specifically this past year, has dwarfed any prior year,” he says, citing the Bondi 8 and Clifton styles as the most popular along with “outstanding” sales of the Speedgoat 5 and Anacapa trail styles. “Hokas have tremendous shelf appeal. There’s visible technology that looks comfortable on the wall, and once the customer puts it on, it’s a sale,” Wasserman says.
Nick Krouse, director of footwear for Fleet Feet, reports a similar resounding success across the chain’s 250 running specialty stores nationwide. “As a brand that, a short time ago, was just cracking our top 10 list of footwear brands, Hoka has made remarkable strides in market share, which is now close to a quarter of our total footwear sales,” he reports. “It’s a direct reflection of their relentless pursuit of their vision, mission, and product evolution. They’ve done a tremendous job partnering across our brand to create a deep and meaningful partnership to support our local stores, and they also collaborate on storytelling moments and initiatives such as ‘Humans of Hoka,’ ultimately leading to increased customer demand.”
In addition to the Bondi 8 and Clifton 9 that ranked consistently as Fleet Feet’s top-selling styles—both in-store and on fleetfeet.com—Krouse cites the updated Mach 5, a lightweight shoe for up-tempo runs, as a big seller. “It’s the shoe where you really want to fly, and it garnered a lot of positive attention from our customers,” he says. “And as a brand with roots in off-road styles, it’s important to call out the success of the Speedgoat and Challenger trail runners for their durability and versatility across varying terrain, as well as the Arahi and Gaviota styles, which were key in Hoka’s support category.”
Krouse says Hoka’s max design premise has broad appeal for performance reasons as well as aesthetically. “A lot of runners and walkers find the classic Hoka combination of a thick midsole, low heel drop, and rocker shape to be quite comfortable, so it attracts a broad spectrum of consumers,” he says. “That includes people who regularly run, casual wearers who like the visual aesthetic, wellness seekers wanting a versatile shoe that can be used for a variety of activities, and health care and service industry professionals who need a comfortable shoe while working on their feet all day.” —G.D.
COMFORT SPECIALTY: CHIAPPETTA SHOES
Best of Times
Chiappetta Shoes reported its biggest year in its 102-year history.
THOUSANDS OF RETAILERS nationwide were pleased just to tread water in 2022 amid a lingering pandemic and record inflation. Plenty of retailers, sadly, capsized. Then there was Chiappetta Shoes of Kenosha, WI, which simply blew expectations out of the water, registering record sales of 19.2 percent year-overyear growth and a 48.2 percent increase compared to 2019. What’s more, the success was achieved while the business was in major move mode to its new, much bigger digs nearby, which it completed doing last month.
Tony Chiappetta, a fourth-generation owner, credits the “responsible” growth primarily to channel diversification that spans in-store, Amazon Marketplace, website, and shoe repair shop, which offers a service that has become increasingly rare and hard to find elsewhere. “Channel diversification—like doing as much as we can on Amazon without leveraging too much time or money—has been a winning solution for us,” he explains. “We also spent an extra percentage on our forecasted marketing budget on TV in the Wisconsin and nearby Illinois markets that performed very well.”
Tapping into the Illinois market was a key factor in the store’s success last year, Chiappetta says. It helps, he adds, that the local government is pro-business oriented. “Our government is very good at trying to get people from Illinois to shop here with lower taxes and gas prices,” he says. “And we did a better job of reaching them. We pulled in a wide variety of people from over a 40-mile radius.”
Helping draw traffic is Chiappetta Shoes’ strong pedorthics business, which accounts for about 50 percent of overall sales. The store is a destination for people suffering foot and back pain. “Pedorthics is any comfort retailer’s savior,” Chiappetta offers, noting that it’s a specialized skill spanning assessment, manufacturing, and implementation of medical solutions to alleviate customers’ problems. “It’s real, and people will pay for it if you’re good.” But rather than have that segment be at the mercy of doctor referrals, Chiappetta’s approach is to market the store as a first recourse. “Ninety-five percent of our pedorthics marketing budget is DTC,” he says. “We want to be the customers’ first step toward improving foot health—and a lot of times, we can solve those problems quickly, efficiently, and often for less expense than various and multiple doctor visits.”
Chiappetta Shoes also caters to a broad demographic that stretches beyond pedorthics. European comfort brands such as Birkenstock and Taos help attract a younger audience, which Chiappetta says is hugely important. While not huge, the shoe repair service serves as another draw. “Our repair shop is very busy, which represents another diversification of sales angle,” he says. “It gives people another reason to come to our store. It’s good business, if you do it right.”
Another aspect Chiappetta Shoes continued to do right in 2022 was its annual tent sale, held in July. What started out in 2020 as a necessity to move the clearance sale outside has evolved into a big deal. That starts with renting a really big tent, at about 2,700 square feet. “Moving our clearance sale outside was something new, and our customers have gotten excited about the new format,” Chiappetta says, noting sales jumped 35.7 percent over 2021. “My theory is to go big. We get about 6,000 pairs in that tent, so when people walk in they say, ‘Wow, there’s a lot of shoes in here.’ The grandiose factor has been key to it becoming such a success.”
Speaking of thinking big, Chiappetta believes the move to the new building, which is about three times the size of its former 5,300-square-foot location and includes a new 48-spot parking lot, will result in much bigger business in the years ahead. In fact, the move alone has helped generate buzz among the community. “It’s greatly impacted the awareness of anything we’ve been doing,” he says. “We’ve seen an organic increase in socials, as people like good news and not BS news like donations and sales. We’re making sure our investment in the new space matters, and will continue to leverage on that.”
Another key ingredient to Chiappetta Shoes’ success is patience. Specifically, waiting to make smarter decisions. “It’s about knowing your strategy for growth and being aggressive, but not forcing anything just to make something happen,” Chiappetta explains. The new location is an example. “We’d been looking for about four years and were in deep negotiations on a site where would’ve paid triple what we are now. Fortunately we decided not to overleverage ourselves and to be patient.”
Last but surely not least, Chiappetta cites his employees as the most important ingredient to the store’s ongoing success. “Maintaining relationships with the people that make your business tick is essential. Our record year is a tribute to our staff, who helped keep it all running smoothly,” he says. On that note, Chiappetta is proud the business will be growing its employee count in the new space and has promoted one of its resident Shoe Dogs, Joe Diefenbach, as general manager to help in that effort. “Managing employees and maintaining relationships is a labor of love, just as much as helping your best friend’s Grandma Betty with her bunions,” Chiappetta says. “Anything worthwhile takes work.” —G.D.