Changing of the Guard
Marking Washington Shoe Company’s 125th anniversary, Karl and Rob Moehring, CEO and chairman respectively, reflect on four generations of family ownership and the exciting road ahead.
It just doesn’t happen that often—companies launched in the late 19th century still existing today. Even more rare: 125-year-old companies actively repositioning themselves for future growth as opposed to running on a legacy or, worse, fumes. Even more unparalleled: 100-plus-year-old companies still owned and operated by the same family. But Washington Shoe Company—makers of Chooka, Western Chief and Staheekum brands—is all of the above. The Moehring family has owned their Kent, WA–based business for the past 106 years and is now passing the leadership baton to a fourth generation, recently naming Karl Moehring CEO. Rob Moehring, former CEO and principal owner since 1991, is shifting into a chairman/emeritus role that will let him focus on the matters he holds most dear—product design and innovation. Meanwhile, Karl, who has risen through the company ranks since joining in 2002 (he most recently served as CFO and COO), continues to position Washington Shoe Company for its next phase of growth during the rapidly evolving omnichannel revolution.
“We are a family business, and we are always looking at the transition of moving from one generation to the next,” Rob says. “Karl’s skillset of management and finance is best suited to the next stage of the development of our company.”
The timing for such a changeover is ideal. Each possesses the abilities to serve the company’s current needs. Rob has always been a product visionary. It was his decision to shift from the fast-fashion, junior’s-based business model his father and uncle developed to rain boots in the early ’90s. That proved a tremendously lucrative move. The category was in stride with a utilitarian fashion movement and soon exploded in popularity, thanks to the advent of printing capabilities that turned rubber boots into art canvases as well as 3D molding that transformed kid’s styles into adorable, lifelike creatures such as frogs and lady bugs. The Chooka and Western Chief brands became leaders in their respective rain boot niches, and Washington Shoe Company enjoyed the strongest growth in its history.
The goal now is to extend both Chooka and Western Chief into other categories and become more complete lifestyle brands. Rob believes such extensions are more attainable than trying to launch additional brands from scratch. The company learned that lesson the hard way when it tried—and eventually gave up on—launching a handful of brands over the past decade. “Having 12 brands just divides your resources into 12 pieces, and a company our size really can’t do that,” he explains. “We had nearly that many at one time, and now we are down to three.”
Rob compares the process Washington Shoe Company is undergoing to the transformation Ralph Lauren made, albeit theirs is on a much smaller scale. “He went from being a very creative person designing suits and ties, basically, to managing a gigantic corporation,” he explains. “His vision had to be delegated to manage that expansion and further his vision.” Washington Shoe Company, too, needs to operate on a more sophisticated level to reach the next stage of success, says Rob. “We need to put metrics and descriptions on every job within the company to ensure that our vision for where we want to go next can be achieved,” he says, adding that his son has been performing many of those tasks already.
Rob also draws parallels to Nordstrom, a company he holds in high regard. “They are one of the best examples of a successful family business,” he states. “Three members of the same family serving as co-presidents—that’s very unusual, but it’s really great to see.”
These days cooperation is a priority at Washington Shoe Company, but that wasn’t always the case. The Moehring family freely admits they’ve done their share of head butting over the years. “There are a lot of challenges in a family business. You go through stretches where personal and business lives intersect, and sometimes it can be really complicated and become your worst nightmare,” Rob explains. For starters, it’s hard to leave work at the office. Rob’s wife, Val, recently retired from the company, and his eldest son, Mark, is vice president in charge of outside sales and human resources. Rob’s self-confessed hardheaded nature made him wary of outside input, but after the family brought in an industrial psychologist to mediate difficulties and help them work through various impasses, the lines of communication opened. The process helped the Moehrings see the big picture: Keeping the business within the family far outweighed personal issues. “Once we came to understand what really drives each of us, it made a huge difference in our relationships,” Rob says. “There were some real epiphanies for me, and I’m grateful for having gone through the process.” Karl concurs that the outside counseling (the family still meets with the psychologist on a quarterly basis and conducts conference calls to help foster communication) saved the business. “It was definitely a turning point for our company and our family,” he says. “It brought us back together, reenergized us and got us all recommitted to the business.”
The Moehrings are focused now on writing the company’s next chapters. They are also taking time to commemorate this year’s notable anniversary. Original logos have been brought back into circulation, updates of classic styles will be introduced, and social media campaigns are in the works. The company also launched the Wear a Big Smile charitable foundation that will donate rain boots, coats and umbrellas to children in need. “We want to give back to the community, and Wear a Big Smile is our show of thanks for helping us get to where we are today,” Karl offers. The initial plan is to give away $125,000 worth of rain gear during the first year. “We will start locally and then spread out from there,” Rob adds. “We’ll start with homeless shelters, child-related charities and anywhere kids are in need of such products. Eventually we would like it to reach across the country.”
Washington Shoe Company has come a long way from its roots as a logger boot supplier to the area’s mills. Not unlike Seattle, which evolved from a logging outpost into a software- and tech-mecca, the company has undergone several format transformations to adapt to changes in fashion and retailing. It has weathered its share of ups and downs and, through it all, the Moehring family has found ways to adapt and survive. Their proudest achievement? Remaining a family-owned business, which is increasingly rare in the conglomerate age. Perhaps it’s ironic that the company is based a stone’s throw from one of the world’s ultimate conglomerates: Amazon. Then again, the Moehrings are firm believers that there’s room for both public and family-owned entities. In fact, Washington Shoe Company counts Amazon as one of its key retail partners, and the Moehrings also remember it was boutique stores that first embraced Chooka’s tattoo-printed boots and set the company off to the rain boot races. The Moehring family is still racing forward, and for that they are grateful. “I have the luckiest life because I have two sons and a wife who work with me, and we get along now in an amazing way,” Rob says. “We get to do what we love, and there’s nothing better than that.”
So how’s life in your new respective roles?
Rob: It’s great. I’ve always been really interested in the product and trying to come up with new ideas. So this allows me to concentrate on the part of the job that I love the most. I’m also focusing on strategic planning, long-term initiatives and networking. This will enable me to look at the big picture and define new opportunities.
Karl: I’m really excited by the opportunity. We are focused on our growth plan for the next five years. We are shoring up in particular areas to make sure we hit those goals, which are pretty aggressive. We are adding more firepower, for example, behind our sales team to be of better service to our retail partners. It’s mostly a support staff so they are not as burdened with the mundane aspects of the job and can focus on building strong relationships and servicing our accounts. I’m also focused on transitioning my CFO responsibilities to our new hire. We envision the transition to be as seamless as possible. It’s a big year for us.
Was it always a plan of yours to join the family business?
Karl: Living near Seattle in the late ’90s, I thought I’d go work for Microsoft and be part of the dot-com revolution. But life changes. There was a need in our company. So it kind of just worked out, and I’ve been here ever since.
How might your management style differ from your father’s?
Karl: I would say we share a lot of similarities. But my father is definitely the more outspoken one. I tend to be a man of few words, but they are calculated.
Is this the first round of trade shows where you are officially CEO?
Karl: The FFANY show in December was the first. But I look at this transition as a process that’s been going on for a while, and by that I mean years. It’s not like I’m a brand new face within the industry. I’ve been attending shows and meeting with our key customers for years. I work very closely with our supply chain, and that’s not going to change. I guess it’s more about announcing the change officially.
Has there ever been a time that you though about selling and retiring?
Rob: My wife, who has been retired for about two years now, asks me that on occasion. Let’s see, you get up around 9, you TiVo Good Morning America, you go down to the local postal post office to pick up the mail, you grab a latte and a bagel…Just buy me a gun [laughs]. I’m sorry, but that’s just how I feel. Why would I retire? I’m doing exactly what I love, and I’m very fortunate to have two sons to head up the other parts of the business that will make our company succeed going forward.
What enabled your family to work through its difficulties?
Rob: The key is communication and respect, and we are much better in both regards now. If you don’t have that, you absorb anger, and it eats you up inside. It just gets ugly. Being able to work through those difficulties has been the key to keeping us together.
So where does the company stand now, and where is it headed?
Karl: We started this year with a lot of new management on board. In addition, a few have changed positions within the company. Last year was mainly a lot of repositioning so everyone is on the right seat on the bus. This year we are ready to launch our next growth phase. We have a three-year plan to add more distribution channels, which would also involve opening more international partners. We’re off to the races.
Rob: We had a great year in 2015. We’re not a “brown shoe” company and, therefore, not as impacted by current [athleisure] apparel trends. The weather also cooperated—there was plenty of rain, and we don’t need it to be cold or snowy to do well. We also rolled out some new lifestyle product initiatives that were successful. So it was a solid year overall, and we believe we’ll experience similar success in 2016. While it’s an aggressive growth plan, it’s not crazy-aggressive. Slow and steady has pretty much been our M.O., which has kept us away from making big mistakes. We’ve had opportunities, for example, to take on an equity partner that wanted to explode the growth, but always have decided against doing that.
And the growth will be achieved through the existing brand portfolio?
Karl: Yes, the plan is to do it with the brands we have, only more diversified so we’re not just focused on rubber rain boots. We plan to branch into other waterproof treatments on microfibers and leathers, so it’ll still be relevant to both brands.
Exactly how has the athleisure trend impacted your business?
Rob: A lot of women are wearing black yoga pants, and they probably have four or five different colored sneakers in her closet to accessorize what has become an everyday look. And, if the weather is bad, they often swap that out for a bright rain boot. So we’ve been finding a lot of success as a result of this trend. It’s also why we believe fun prints and patterns are trending again. They pair very well with this look. We have plenty of prints, patterns and colors as well as lower profile styles.
How long do you see the athleisure trend lasting?
Rob: Everyone, it seems, is going casual today. A few years ago it manifested itself in what we labeled the “sleep to street” movement where younger, often college-age women who woke up in a pair of sweats, put on their sheepskin slippers or boots, threw their hair in a pony tail and off they’d go about their day. We addressed that trend with our Staheekum sheepskin slipper brand. Now we are seeing a similar casual-based trend where women of all ages are throwing on a pair of black Lululemon yoga pants because they are so comfortable and versatile. The fact is women’s lives are just so busy today. Think back to Steve Jobs and his wardrobe of strictly black turtlenecks and blue jeans. He didn’t have to think about what he was going to wear each day. The athleisure trend, to me, is similar. Women don’t have the time to come up with a different outfit each morning. And they want to be comfortable. Just look at how well Nike, Under Armour and Skechers are doing of late—they are all right on-trend now.
Karl: Athleisure definitely presents opportunities for us. We already make lower-profile styles that can certainly fill that bright color accessory to pair with the predominantly black attire. And we are working on new products as well.
What’s your assessment of the rain boot market now that it has matured?
Rob: There has been consolidation, of course. The sheepskin boot category went through a similar phase. There are a handful of players now, probably five or six, still making rain boots. We’ve been able to stay relevant because we know who we are and who our target consumers are. We also spend a lot of time researching trends and developing new products that fit the needs of our demographics, whether it’s the urban fashion woman (Chooka) or the outdoorsy woman (Western Chief).
Karl: We always say the Western Chief woman smiles more. She tends to live in more suburban and rural settings and is more utility-minded and casual. She prefers brighter colors and more whimsical prints.
How might your Chooka customer differ from, say, Hunter’s?
Rob: She is attracted to our lower price-points as well as our breadth of patterns, prints and embellishments. We have also always offered a more feminine last—one that’s a bit less clunky than traditional rain boot lasts. Overall, we try to be more elegant and sophisticated. For example, our Belmont collection of riding boots for this fall features a range of fabrics, embellishments and silhouettes, be it basic riding boots, ankle-high booties and knee-high versions. It really shows what we are all about.
Did either of you ever anticipate how popular a fashion item rain boots would become?
Rob: Absolutely not. I never knew what the company might look like in the future, and that probably was an advantage. [Laughs.] I took over from my father and uncle after a bet they made on a trend bombed. I was just trying to keep afloat at first, selling Fubu and L.A. Gear shoes to jobbers. That’s when I asked myself: What can we always count on in Seattle? Well, if it’s not raining today, it’s probably going to rain tomorrow. We had been making basic rubber boots for years, and I decided to focus on something that we could rely on. Shortly after that, 3D molding and printing capabilities became available. We went from making basic boots in monochromatic colors to, all of a sudden, fashion boots. I remember when our first character-themed boots hit the market, and our phone started ringing off the hook. Kids were desperate for a pair, and if a store happened to be out of stock, they would often throw a tantrum. The boots were like shut-up toys. It’s like selling stuffed animals in that kids identify so strongly with those boots.
The company has evolved to meet major market shifts over the years, but might the omnichannel revolution be the hardest one yet?
Rob: There are definitely challenges with this because we have to be absolutely consistent throughout our distribution channel. We can no longer have a mom-and-pop store buy 12 pairs and sell a few at 40-percent off without instantly getting the attention of all our other retailers. So the major challenge now is controlling our distribution. Also, we need to create different tiers of products in each of our lines so they will fit the demographic niche of that particular retailer and avoid generating price wars. Nike is the greatest example of doing that successfully. They basically have one brand with about 10 different tiers spanning nearly the whole range of retail. Just by glancing at their different tiers of product, you know what the perceived value is. That is one of our big goals going forward.
How would you assess the state of retail now?
Karl: The ones that are making big dives into e-commerce and omnichannel seem to be in better condition and are generally more positive. The stand-alone brick-and-mortar stores are struggling.
Do you envision a landscape that shifts increasingly to online shopping?
Karl: I think it’s going to continue to head more in that direction. Everything is going to the cloud, basically. Consumers are going to start buying items via any kind of electronic means possible and less in brick-and-mortar settings—unless that retailer really specializes and becomes like a Trunk Club store where you walk in and they have a personal shopper on hand who really takes care of you. If not, consumers are more likely to buy it on their phone.
What might the shoe store as we now know it look like in 10 years?
Karl: I envision it as something that is fully customizable. A setting where you can detail everything about your shoe purchase and they then make it while you wait. So 3D printing is one example. Or perhaps they will have customization that’s not machine-based. I’m talking about going back to real craftsman who will measure your feet to exact specifications and then make the shoes is a few days. It could be a combination of really high-tech and old-school shoemaking.
Customization looks like the next big thing in shoes and pretty much everything.
Karl: I agree. And with the new more user-friendly technologies coming incorporating 3D and laser printing, it shouldn’t be too long before it’s feasible for consumers to design their own boots in-store or online—like they already do with NikeID. Remember when people used to go to their local mall and make their own pottery? Well, rain boots offer similar opportunities to express personal creativity.
These new technologies could be a real draw for brick-and-mortar shopping, right?
Karl: They could. In the meantime, look at what’s driving people to go shopping now—it’s the Apple store and other high-tech destinations that carry all these cool gadgets. It’s why when Nordstrom introduced iPad search capabilities, and design customization programs like Shoes of Prey have been well received. I think retailers have to embrace more of those types of in-store experiences to remain relevant.
In a world of great upheaval and extremes, is there something comforting about being a family-owned business?
Rob: Well, for one thing everybody is all in. We all drink the Kool-Aid. To me, that’s a really fulfilling atmosphere to work in. We are also better able to stay true to who we are. When somebody throws a bunch of money at you, they are likely to expect maybe non-realistic goals. We are totally in control. We are in charge of our own destiny, and we like that.
So, in this sense, drinking the Kool-Aid can be good for you?
Rob: I think so. Our goal is to have our employees enjoy their work and do so in an environment that is positive, supportive, fun and effective. People feel like they are truly a part of something here. About a year ago, we went through an exercise to try and define the essence of our company in a short phrase. We came up with: Wear a big smile. That phrase transitions to just about everything we do. We want our customers to wear a big smile by wearing our boots. We also want our employees to wear a big smile while making and selling our boots. And we want our retailers to smile because they are selling lots of our boots. It’s something we feel really strongly about, but at the same time it doesn’t involve some big-time corporate speak.
It’s a refreshing approach.
Rob: When you are true to what you are trying to do, then all that other stuff develops organically. Of course, we have to attend to business matters, and all of our employees are acutely aware of ROI and such because, at the end of the day, the decisions we make have to make financial sense. That’s why I’m very comfortable with Karl is in this new role to make sure all of that happens.
Karl: Being a family-owned company allows us the luxury to be patient with new opportunities rather than focusing on a quarterly horizon. We can be measured in years. It gives us the luxury to take some risks, but they’re measured and calculated.
Might there be a fifth Moehring family generation in the wings?
Karl: Well, my brother has two young kids, and they do show a lot of interest in design. So, we’ll see.
What do you love most about your jobs?
Karl: It goes back to what inspires me: the people. In the morning, I could be in a customer meeting, that afternoon in an operations meeting and that evening speaking with one of our factory reps in Asia. I love the variety of it all.
Rob: I have the best job. I love following trends, thinking of new ideas and getting great people to bring them to life. I don’t feel like I’m getting old this way. I’ll get off a 16-hour flight exhausted, but the minute I enter the Guangdong fashion market where I see all the fabulous ingredients for shoemaking—everything from minks to fabrics to leathers to all sorts of embellishments—it just energizes me. I equate it to how a chef must feel when they go to the food market and decide what they are going to prepare for the menu that day based on what ingredients look best. Until they see how fresh the grouper is or whether the Brussels sprouts look fabulous…It’s the same process for me, and that’s where I get the energy to keep doing what I love.