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The Commitments

A computer science engineer by training, Richard Wang, president of Propét, is positioning the brand to be smart, quick and committed to being a reliable partner.

Richard Wang, president of Propét

Any footwear executives have an extensive industry background. Some start out on the sales floor of a local shoe store and service countless consumers as they rise through the retail ranks, gaining valuable insights into what shoes sell and why. Others get their start on the manufacturing side, learning the ins and outs of design, production and sourcing. Rick Wang didn’t follow either path. And that’s what makes his nearly 20-year career before becoming president of Propét in 2015 so noteworthy. Wang is not a shoe designer or retailer by trade. His background is in information technology.

That didn’t stop Wang from climbing Propét’s corporate ladder after being hired in 1998 to help with the company’s computer systems. About three years later, he was hired full-time as the firm’s IT manager. Just five months later, the owner asked him to take over the operations and finance sides of the company. “To be honest, accepting that promotion was either the smartest or the dumbest decision I ever made, because before that I was simply an IT guy,” Wang says with a laugh. He excelled at his new position and, over the next decade, streamlined operations while Propét’s sales grew steadily. In 2009, the owner promoted Wang to vice president of operations and, in 2015, he was named president of the company.

Wang is the first to admit that his career trajectory is unorthodox in this industry. He credits much of his success to his computer science training. “Some of the things I did to help the company grow involved introducing new technology platforms,” he says. “We were one of the first companies to introduce drop-shipping, more than 15 years ago.” Wang also cites the implementation of a new warehouse system in 2009 that “totally changed” how the company operates—for the better. He believes his IT background makes it easier for him to find suitable vendors and explain exactly what the company needs.

Propét’s tech-first approach extends beyond internal systems. Wang has revolutionized the sourcing pipeline since being named president. It marks a big change for a company that he says had been very conservative when it came to design and manufacturing since its founding in 1985. He is proud of the progress the brand has made. “The last couple of seasons have been quite different compared to what we did in the past,” he says. “We’ve introduced many new styles that have changed people’s view of Propét and how they feel about [our] footwear.”

Wang credits many of the improvements to Propét’s new manufacturing partners. He and the company’s head designer have been traveling to China four to five times a year the past few years to find new sourcing partners. “It’s enabled us to see what other factories do, and we’ve incorporated some of those innovations into our collections,” Wang says, noting that China is still the biggest shoe manufacturing base in the world and there are new technologies coming online regularly that offer fresh ways to design shoes. “It’s been a great learning experience for us,” he adds.

Improved looks are one aspect of Propét’s recent success. Another is the brand’s steadfast commitment to offering optimum comfort and fit, starting with the entire collection being available in sizes and widths. Wang sees this as a key point of differentiation in today’s marketplace. “How many companies in the industry offer sizes and widths? Not many,” he says. “Surveys show that the most important factor when buying a particular shoe is its comfort—not the price or the brand. If a shoe doesn’t fit well, how can it be comfortable?” Sizes and widths up the comfort potential greatly, Wang says. “I believe we have the potential for much greater growth because that’s our core strength.

“This company should be at least three times bigger than we are today,” Wang maintains. He says the market potential is there, but only if consumers know the option exists. “We are upping our marketing efforts to tell the world what we have to offer,” he says, and the Internet makes communicating that message much easier. So far, so good. “Over the last three years we’ve introduced more changes to our systems, product and marketing than in the 32 years before that combined,” he says. “And we did so without losing our identity.” Wang adds that Propét’s growth this year proves the company is on the right track. “We’re targeting 20-percent sales growth this year,” he says. “It’s very aggressive, but we expect to reach the goal.”

Not bad in a year when growth of any kind has been hard to achieve. Propét’s success is even more remarkable given the fact that much of it came from traditional brick-and-mortar stores, says Wang. He credits that, in part, to standing by their retail partners. “We didn’t forget them,” he says. “We actually invested more in their businesses to help them better display our products.”

Propét’s online sales are growing “dramatically” too, thanks to the company’s systems efficiency, says Wang. “We’re not a huge business for those retailers, but in terms of an efficiency scorecard we rank in the top tier because of our drop-ship capabilities,” he says. “If we have the inventory, we can drop-ship more than 99 percent of the orders in the same day.” Before the upgrades, Wang says, Propét would have been lucky to ship 85 percent of orders in the same day. “It’s a big jump,” he says. Carrying the inventory is a tremendous investment, he concedes, but “If you don’t, you can’t provide the service that retailers demand. It’s the price you need to pay because service is so important to every customer today.”

Success requires enormous commitment on every level—delivering fresh styles, carrying a large inventory, helping drive traffic to stores, investing in the latest systems upgrades—whatever it takes, says Wang. And he is committed to delivering on all of them. In fact, it’s what the “IT-guy-turned-shoe-executive” has wanted to do since joining Propét 19 years ago. “I’m making the decisions that I’ve always wanted to make,” he says. “I’ve always been a firm believer that this company could be much bigger, and my motto is if I believe it, I stick with it.”

You are projecting 20-percent growth this year amid what’s been a very challenging market. So it can be done.

Yes. We hope to make that figure, but if we don’t we’ll definitely have double-digit growth this year. It’s because of our fresh styles, sizes and widths offering, new marketing and ongoing investment in systems. We also have been very successful in the medical market; it’s been a big growth area for us.

Is the retail environment as challenging as it appears to be?

Lots of people are saying the traditional store is dying, and we are not oblivious to that. But I believe there is still plenty of opportunity in that segment, particularly for Propét. There are still many retailers that we haven’t even touched yet, so we aren’t giving up on that market. We also see new stores opening. Every month it seems like we have a new customer who has recently opened. Beyond that there are some who know how to go about the business the right way. If you refuse to make changes and just sit and wait for the customer to come to you, then I think you’re in real trouble. If you are willing to change your approach and adapt, I believe you can find a way to survive.

Well, the demand isn’t going away, but the way consumers purchase is changing. The question is to what extent? The impression of late is consumers will soon shop online for everything.

History often shows that when things go to an extreme it reaches a turning point. I shop online for a lot of things, but not everything and especially not shoes because I really like to touch and feel and try them on first before I buy. Also, let’s not forget that one of the leading benefits to shopping online is the free shipping and returns. But how long can that last? Eventually those retailers won’t offer that anymore. Once they start charging for that, I guarantee that’s the day consumers will change the way they shop for shoes again.

I guess we’ll see soon enough.

It’s one of the reasons why we’ve invested heavily in our inventory, technology and services—specifically to service traditional stores to help them survive. Many of them are struggling, so it’s more important than ever for them to get support from vendors. If they don’t, then they might die off faster and that does neither of us any good. That said, we treat all our retail partners the same, no matter the size or format. We provide the inventory and try and offer whatever services they need, and we ship right away. I think that approach can help traditional retailers to at least maintain their level of business or maybe even regain some of it. In addition, a lot of our partners in this tier are adding an online component. The difference is not many companies can work with them as efficiently as I believe we can.

How so, for example?

Our return rate is considerably lower than most of other brands. A good margin is a must, but it really depends on the return rate as to whether those retailers are able to make a profit selling online. And thanks to our sizes, widths and construction that fits better than other brands, there are fewer reasons to return a shoe. It’s one of our strengths, so the selling online can benefit a brand like us in many ways.

A sizes-and-widths business model requires a huge commitment. Hence, the relative scarcity of vendors that offer it.

It does, and it’s not just the inventory commitment. The manufacturing aspect is also very challenging. It requires an enormous commitment, and you need to have a good relationship with the factories because it’s very difficult to make shoes in sizes and widths. Fortunately, we have developed close relationships with our factories. We feel we now know each other well and they understand our specific needs.

What’s your main goal for the rest of the year?

In addition to meeting our sales growth goal, we will continue to invest in our IT infrastructure so we can provide an even more accurate, quicker response to our customers’ needs. We are committed to servicing them to our best abilities. For example, we’re ahead of a lot of vendors on the product development cycle. We’ve almost completed Fall ’18, and we’re on to developing Spring ’19 product already. I believe that benefits both us and our vendors. They have a chance to offer some feedback, and we’re able to make any changes in time. It also lets us approach any potential customers earlier in the buying cycle. The earlier you can approach them, the earlier you might get a commitment from them. Because you never want to hear, “Oh, I love your shoes, but I spent my money already.” So we’ve been working hard the last couple years to push our production schedule up four to five months ahead of what it was, and now I think we’re in the right time frame.

Is there any danger of being too early?

I don’t think that’s the case for us. We are mostly getting ahead on concepts and constructions. Plus, in our category, we’re not trying to be super fashionable where looks can change in a couple months. Another benefit of being earlier allows us to feature the shoes in our printed catalog. It gives us another head start on selling a new collection. And the fact that we offer all our styles in sizes and widths means consumers have a much greater choice to get the right fit. Unfortunately, most don’t even realize a choice exists. Many are walking around in shoes that don’t fit properly. This is something we must advocate to consumers: the importance of a proper fit. That’s why we are going to be more aggressive in reaching out to new potential customers, because we believe the demand is there. We’re going to provide more in-store programs to promote our shoes as well as expand our marketing efforts.

I believe a great opportunity for brick-and-mortar stores is to create a sort of Midas shop for feet. Sit the customer in a comfortable chair, offer them a cup of coffee and let a trained technician give a feet tune-up: sizing, pain and discomfort consultation, proper fitting, possible add-on recommendations, etc.

I agree with you, and our retailers don’t necessarily have to carry a bunch of inventory. As long as they have the right sizes to fit people, we can ship any style that they may not have in stock right away.

You make it sound almost easy yet I often hear complaints how the business is so much harder today. It’s more demanding, competitive, difficult and less cooperative. Do you agree?

It’s tougher in many ways than when I first came into the industry. Personally, what’s most frustrating is the overproduction. The market is full of cheap shoes. It’s a dead end because there’s always somebody who is going to be cheaper than you are. And if you get caught up in trying to compete on price, guess what, you start making cheap shoes, using inferior materials that will eventually damage your brand. We don’t want our retailers to sell a cheap shoe, nor do we want them to sell a shoe cheap. That’s why we must create products that our customers feel comfortable selling at a respectable price. (Propét’s range is $60 to $130 retail with select styles up to $189.) A price that consumers also feel comfortable spending.

The price pressure from Amazon, mostly, surely makes this job to at least maintain price harder for all brands. Consumers have been trained to shop online for the lowest prices, and Amazon is committed to delivering them.

You’re right. So far we’ve been able to maintain our prices without it affecting our quality. We’ve also invested heavily in a MAP pricing program that seems to be working, and we sell some exclusive items to select retailers, which helps prevent price competition.

What do you consider to be the biggest challenge facing the industry right now?

In addition to a market flooded by cheap shoes, the supply chain is another big challenge. Specifically, nobody wants to pay more than what they are currently paying for shoes, yet the cost of making each pair continues to rise. There’s really not much left to squeeze out a profit anymore. Fortunately, since we began outsourcing production it has enabled us to maintain a reasonable margin with respect to operations and not have to raise prices.

If production prices keep rising, there’s a breaking point eventually, no?

Yes. But I can tell you that if we raise our prices it will be because everybody else has already raised theirs. We will not be the first one who does that, especially since we’ve got it under fairly reasonable control for now.

Would you consider yourself to be optimistic going forward in terms of Propét and the industry overall?

I’m very optimistic for Propét, for sure. As for the industry, I don’t think we will see big changes in the immediate future. I expect it to be flat to maybe a little increase. It’s surely not going away, which is another reason to feel optimistic, especially with respect to our sizes-and-widths concept. That I expect to continue to be a growth market.

Speaking of growth markets, what’s Propét’s stance on direct-to-consumer sales?

We are a wholesale company. We are committed to our retail customers and, at this point, haven’t set up any schedule to do DTC. We prefer to stay committed to our retail customers and not compete directly with them.

Well, you’re one of a very few wholesale executives who has clearly stated that.

Yes, it seems everyone else is selling DTC. But we see the traditional wholesale model as our core business still.

Where do you envision Propét in five years?

I’m hoping to at least double our size.

What do you love most about your job?

I’m kind of like a janitor here. I clean up any messes and help people work together. I think the most enjoyable aspect is that I work with a bunch of very nice people. They all have respective talents that they bring to their jobs and I enjoy working with them and helping solve any problems they may have. That always gives me great satisfaction.

You are an IT guy by trade, but is it fair to call you a Shoe Dog now?

Don’t get me wrong, I love shoes but I don’t see myself as an expert. I don’t think I’m a Shoe Dog just yet. But I’m still learning. Our head designer qualifies as one, and I continue to learn a lot from him as I do from our factory partners. Maybe one day soon. •

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