Scratching the Surface
John Pierce, president of Bearpaw, on branching into a year-round, head-to-toe brand and why the parent company is just getting started.
Bearpaw is still a teenager. Approaching its 18th birthday, the casual lifestyle brand known primarily for its sheepskin and furry boots may be near adulthood, but it’s prepping for a growth spurt thanks to a handful of initiatives introduced over the past year, according to John Pierce, president. The exec, who joined the Citrus Heights, CA-based company eight years ago as a regional sales manager and soon after was named national sales manager and then president in 2014, says the company is just starting to “spread its wings.”
The efforts include extending Bearpaw into a solid year-round business in men’s, women’s and kid’s as well as expanding into several licensed apparel categories. In addition, the parent company, Romeo & Juliette, recently launched a first-cost division and a drop-ship program. Then there’s the new upscale brand, Luxe De León, which will make its debut at select boutiques this fall. Under Pierce’s tenure, the company has also upgraded its R&D facility in China, hired a new designer who is “focused on the big trends as well as the smaller details,” debuted a new TV campaign last fall and invested heavily in its quality control team to make sure products are shipped to the highest standards, in-full and on-time. Pierce’s efforts to upgrade Bearpaw’s backroom capabilities is perhaps the surest sign the brand has matured into a trusted partner. “In those early years, we made it easy sometimes for a retailer to walk away by not doing the basics,” he says. “I knew it was just a matter of adding structure and guidelines, and holding firm to those core business practices, rather than just expecting retailers to be accommodating to us. We need to be accommodating to them.”
Take ordering, for example. Pierce says orders are now all placed to its factory partners so deliveries land on store shelves on time. And thanks to the beefed-up quality control and R&D teams, the product is improved. “The R&D office is a huge addition to our capabilities because we can now flip samples much faster and be more protective of our styles,” he says. “We’re growing up as a company. We’ve brought in the right people to handle the right areas. We’re running the business the right way.”
Case in point: The launch of a first-cost division last year. With an increasing number of retailers looking at private label to differentiate themselves, Pierce sees the initiative as timely. “It’s still in the infancy stage, but it’s another revenue stream that wasn’t there before,” he says, adding that Bearpaw will gladly fill orders for wholesalers as well. The recently launched drop-ship program represents another new revenue stream opportunity for the company. Realizing just how tight buying and receipt dollars are these days, plus the fact that retailers rarely buy outside their comfort zone, Pierce says the program offers a risk-free commitment to showcase newer styles online. “Drop-ship allows participating retailers the opportunity to showcase some of our collections, like the Metropolis wedge and heel collection, that they may not normally associate with the brand,” he says. “We’ll carry the inventory and all they have to do is show it on their websites. That’s all plus business for those retailers and us.”
Asked to grade himself on his first four years as president, Pierce gives himself and the company a B. “There are always things we could do better, but we’ve made huge strides in many areas,” he says. Pierce is quick to credit the company’s success to the entire team. “It’s not just me or (CEO and Founder) Tom Romeo. It’s been a team effort,” he says, noting that part of the success comes from valuing every employee. “You have to respect people and treat them fairly,” he says. “That creates consistency and integrity in all your departments, and employees then know how to do their jobs instead of having to constantly train new people.”
Pierce knows of what he speaks, having worked extensively on both the retail and wholesale sides of the shoe business. (See side bar, p. 16) He spent time with Foot Locker, J.C. Penney, And 1 and Pony, before joining Bearpaw in 2010. His extensive buying experience, in particular, is an asset. “Having been a buyer enables you to anticipate the pluses and minuses of anything you might come across,” he says. “And while retail is changing, the core essence of buying and what you have to do in stores is still the same.”
Pierce is excited about the opportunities ahead for Bearpaw and its parent company. It’s positioned well for leaps and bounds, not baby steps. What’s more, leading a company with plenty of runway—here and abroad—sure beats the alternative. Pierce’s plate is full: managing a growing brand, launching a new one, adding services and creating additional revenue streams—all while staying profitable. It’s the definition of a company with potential and promise. “As long as we maintain profitability and we’re not selling our souls to the devil, it gives us the ability to do these other initiatives,” he says. “It enables us to continue to evolve and expand.”
And this is no time to stand pat. In an age where flat is the new up and disruption the new black, sitting still and hoping business will revert to the way it was is a fool’s errand. Evolution and adaptation are the keys to survival, more than ever in the hyper fast pace of the Online Retail Age. “Just the ability to maintain sales is a real challenge, especially with store closings,” Pierce says. In the case of Bearpaw, however, he believes the brand is somewhat protected because its eggs aren’t all in one basket. “We hit department stores, sporting goods chains, family shoe stores and that Middle America piece,” Pierce says. “And while disposable income is difficult to come by right now, when the consumer finds that affordable item of great value and quality, there’s a reason make the purchase in their eyes. Bearpaw delivers that type of product.”
First off, Bearpaw’s product the past few seasons has been really good, in my humble opinion. What do you attribute that to?
Well, thank you for that and I agree. One, it has to do with our R&D center. Two, we hired a true designer in early 2015 who is focused on drawing and market trends, whereas before it was kind of, ‘Hey, what did we have in the past, what’s a need in the market now,’ and we’d build according to that. Now we’ve got someone focused on the small details—the embellishments—as well as the bigger picture. That goes hand in hand with the improved quality control and the increased standards of our product. Because of that, I would say that while our classics are still an important piece of our business, it’s the other areas that have been growing.
Our Tahoe collection, which is the cold weather, waterproof and Neverwet treated uppers (resists liquids and stains) with heavy-duty lug soles. It’s been growing steadily over the last four years. Our Savvy collection, which is the essence of the Classics updated with embellishments and details like straps and buckles to create a more updated look, is also growing. Our kid’s business is on fire right now. We’ve taken down some of our popular women’s styles. It’s only $5 to $10 more than the core styles, but you’re getting a lot more going on. It’s also not just a mommy-and-me scenario. We’re having success with some fun kid’s-only styles as well. And we’ve just added some styles to our men’s side at the end of last year. Up until that point, we only made men’s slippers. We’ll be focusing more on that segment going forward to build a line that’s worthy of our women’s and kid’s lines. We’re rounding out the family business.
Where is Bearpaw in the goal of becoming a year-round brand?
The goal, first and foremost, is to be year-round footwear business, and we’re almost there. The next step is to make the percentage of the first half of the year closer to the back half. It’s never going to be 50-50, but a better percentage than what we have currently would mean our spring piece is becoming more important.
Like with the launch this year of the Trans-Seasonal collection?
That’s a work in progress. I think the intention is right, but the look still needs a little work. We need to look at colorations, for example, because the June-August selling period was too heavy in fall colors. We’re not going to give it up, but we need to make some adjustments.
What about becoming a head-to-toe brand?
That’s the secondary goal, and this is where there might be disagreement: Can you be a true brand and not be head to toe? I believe you can be just a footwear brand and still be very successful. But the head-to-toe aspect doesn’t hurt. We signed our hosiery license about four years ago, and that’s been a very good business. A year-and-a-half ago, we signed a license deal to make outerwear, like ponchos, hats, scarves and gloves. We’re looking to really extend that.
Why do you believe Bearpaw possesses broad crossover appeal?
It’s product, first. You have to have great product. Then you utilize relationships, offer sales programs and aspects like our drop-ship program. This spring is the first season we are offered that service. We’ve partnered with about 12 retailers, and the goal is they see that there’s a spring consumer for Bearpaw. It also works in fact finding, where retailers can see that there’s a consumer that is looking for something other than just our classics. It’s been a nice business so far.
Many retailers of late are pairing down assortments—going deeper with brands they know and trust. It’s not easy trying to break new ground these days, correct?
It’s not, and some retailers are stingier than others. For example, Macy’s chose only a select amount of our drop-ship inventory, even though there’s no inventory risk. It could have to do with possible returns—they’d have to liquidate that themselves. But our return rate is generally much lower than the masses, and part of that is because we are whole sizes only. The other factor to take into consideration here is that we established ourselves as a fur boot business and there are only a handful of companies doing that type of product. Whereas, if you look at the spring sandals and closed-toe markets, there are so many brands that are already established. So we’re fighting for shelf space just like anybody else. The competition for spring is much denser than it is for fall.
Tell me about the new brand you’re launching this fall.
It’s called Luxe De León, named after where it’s made in León, Mexico. It’s a high-end brand that retails on the plus side of $200, and it’s completely different than Bearpaw. It’s women’s and men’s styles. It’s not associated with Bearpaw at all, either. We’re not selling the same retailers, and it’ll be managed by a separate salesperson. We see this as a boutique business, and we’ll also approach some of the higher end majors like Nordstrom and Zappos.
The advantages of being made in Mexico?
You can do shorter runs and quicker turnaround times. It enables us to dip our toe in the water to start and build it from there. For example, we can build 180 or 360 pair as opposed to 3,600 pair. The turnaround time is 30 to 45 days as opposed to 90 days, and it takes days for delivery from Mexico as opposed to weeks from China. The DTC channel can also be a way to help start this brand.
And retailers are looking to buy that close to a season?
Every retailer is different, but when you look at the smaller guys, many don’t know where their financing is at any given time so they often buy much closer to season. And extreme boutique specialty stores might only buy five pair. Having an inventory position on such items provides another way to succeed versus just making to order in advance. If we sold every pair, that would be a great thing in the first year. But it’s not a huge risk.
It’s not easy to get retailers to commit to much these days, let alone to something new. Having worked on that side, how would you describe this current environment?
It’s still a correction process. By that, I mean there was an explosion of retail space in the ’90s—people were opening stores left and right. I was in the Dallas market, and it seemed like a new mall was opening every 10 minutes down the road. Did we really need that much? As opposed to driving 25 minutes to a nice mall with one-stop shopping? So I think it’s a necessary correction. People are closing doors to a more manageable and productive number.
Where are we at in this correction process?
We’re probably still a couple of years away from being finished. Then you layer in the Internet, which is where the play is. I believe those that find a way to make the two work together are going to be the ones that succeed.
Many blame online retailing—Amazon, in particular—for the rash of brick-and-mortar closings. But one could easily make the case that due to over-expansion, this shakeout was coming regardless.
Very much so. But I don’t believe brick and mortar is going away entirely. There’s still plenty of people who want to try things on—they still want to touch and feel. At the same time, people are hard-pressed for time and want everything at their fingertips, so if they know they can walk into a store and find the item they are looking for in the size and color they want, then they’ll do it. Options like shopping online and in-store pick-up means you’re not wasting time shopping the racks and trying to find something. You have to find a way to make both work.
Is online a growing channel for Bearpaw, or is it all pretty much going to Amazon?
Most of it is going to Amazon. We made the decision to stop selling them directly three years ago because of pricing and the valuation of the brand being hurt. I believe it helped our other partners, although maybe not to the degree that they would have liked. However, I’ve rescinded that policy slightly. We’ll be selling Amazon directly again this year, just to a much lesser extent.
Why open Amazon again?
Because when Amazon is selling direct, it pushes down third party sellers on the site, many of who are unauthorized dealers. Quite frankly, you cannot control them. You try and you try, but I don’t have a team big enough—a staff of 25 that we can monitor the way it needs to be done. Amazon selling our brand means some of these unauthorized dealers aren’t going to get the sale.
What’s Bearpaw’s stance on the DTC channel?
Our Bearpaw.com business was up a sizable amount in 2017. I would attribute it to a few factors: We started a TV campaign to build total brand awareness. That ran from October through December on key channels—Hallmark Channel, E and Lifetime—that show a lot of the Christmas movies and everything else that moms watch. It was our second TV campaign, but the first one where we really planned it in advance. I think that paid huge dividends. We also sent out a direct mail piece—a mini magalog that showed the entire collection and our lifestyle—as well as three different mailings over the same period. We really started to see business pick up on our site starting in late October on into the New Year. That said, our DTC site is always full price until post-season and it’s a discontinued item. We can’t have our retailers feel like that they’re competing with us online. Now do we want to see our Bearpaw.com business continue to grow? Sure, because it’s a full-margin business. But I believe we’re only as successful as our retail partners. I’m not naive to think that we’re a household name. We’re not a Nike or Adidas. We still need retail partnerships, and that’s the whole reason for the TV campaign. It’s not to drive certain items, but to continue to build brand awareness and possible future customers that shop everywhere Bearpaw is sold.
Is there another TV campaign in the works?
Yes. We are changing it up from the last two years in terms of the look and feel. We’ll be featuring four of our brand ambassadors who push the brand on social media in their own day-in-the-life spots.
Despite a challenging climate, shoe sales overall aren’t shrinking, at least drastically. It’s more a matter of who is doing the selling.
Correct, the pie isn’t going away. The population isn’t shrinking greatly, and while consumers overall might be spending more on electronics and experiences, they still need footwear and apparel. My brother, who works in the medical field, once told me his business was recession proof because people are always going to get sick. I won’t say footwear and apparel are recession proof, but people will always want and need those items. And while we haven’t shown a ton of sales growth of late in a very challenging retail environment, it could have been a lot worse. It could have been decreases. We’ve maintained profitability, and I take that as a positive right now.
Where do you see Bearpaw in five years?
I see Bearpaw being a solid 12-month business in the U.S. and internationally. Over the past two years, we’ve increased our representation in Europe and other parts of the world as we have a true focus on building a global presence. Having partnerships with warehouses in Canada and Europe will enable us to grow at a faster pace because we’ll have product on the ground that’s accessible during the season, either to add new retailers or fill-in, much like how we built our U.S. business. And with Romeo & Juliette, the initiatives we are in the process of launching are all potential new revenue streams. It’s an exciting time for us.
What do you love most about your job?
The people. I’ve been on both sides of the table, and it’s not all just about selling. It’s the relationships you make with the people you work with and our retail customers. It’s knowing that we have a tight-knit group in our offices and we all rely on each other to succeed. Of course, you have to be professional, but you can have fun doing it. I also love the fact that, with regards to Tom Romeo, complacency is not in his vocabulary. He’s a dreamer. He’s always looking at something else. Collectively, it’s what makes my job exciting on a daily basis.