Now at the helm of the family business, Anthony Diks, CEO of Wolky, discusses how the Euro comfort brand is skewing younger and aiming to be a year-round resource.
It’s always a pleasure to interview a genuine shoe lover, and I’m not referring to the Carrie Bradshaw type that goes gaga over designer shoes only. Nor does it apply to the exec fixated on maximizing quarterly profits but who doesn’t really know shoes from shinola. The type of shoe lover I’m referring to deeply loves the art of shoemaking, from the last outward. Someone who knows every stitch of the design and manufacturing process and is enamored by it all. Someone who admits to getting a buzz from the tannins released by the rich leathers. Who knows that two millimeters can make the difference between a perfect fit and one that must be altered to fit perfectly. Who believes comfort and fashion don’t have to be an either-or proposition. Someone who wants to make the shoe business his life’s work. Someone who lives and breathes this business every day. That someone is Anthony Diks, CEO of Wolky.
“I really love shoes,” Diks says. “We are building a product using a variety of natural materials that can react differently when combined. You get surprises in the process sometimes, and it requires genuine skills to work with this product. I love the whole aspect.” If a shirt’s sleeves are a few millimeters off, no one notices it, Diks says. But “shoe design is so much more specific, especially in the comfort segment.” And while making shoes is more difficult than making a shirt, Diks embraces the challenge. “Something that is harder to make can be more interesting than what is easy to make,” he offers. “Shoemaking is not something everybody can just do. Our factory workers are very talented, and I just find it to be a very interesting profession.”
Diks likes to say he was “born in a shoebox.” It’s fitting imagery, given that his grandfather was a shoe retailer and his father, Kees, ran a chain of shoe stores with his brother, Jan, in the Netherlands. That led to the launch of Wolky in 1982 after one of their key wholesale accounts abruptly went out of business. Diks, who worked summers and holidays during his teen years at the stores and in the warehouse, never debated about choosing a career. In fact, legend has it that when he was a young child one of his elementary school teachers diagnosed him as having a “shoe condition.” The obsession grew and Diks later enrolled in England’s International School of Footwear at Leicester College. “It’s the only school in the world that gives this particular education,” he says. “Everything is related to footwear design and the shoe business, and I loved it.” After graduating, Diks worked for two shoe companies, Mexx and Yellow Cab, for a couple of years in the Netherlands before joining his father at Wolky.
The year Diks came aboard as product director was 1998 and, by that point, Wolky had become established in Europe and had been making inroads in the U.S. Indeed, the brand had come a long way from its debut in the early ’80s as a soft footbed concept intended to compliment the chain’s (firm footbed) Birkenstock business. The debut sandal featured a leather-lined memory foam footbed that was anatomically shaped and designed to evenly distribute the body’s weight. It achieved its main goal of “immediate slip-on comfort.” The sandal sold well, despite its aesthetic shortcomings. “They were affectionately called Jesus sandals,” Diks laughs. “They didn’t look so pretty.” Then, in 1984, the brand had its breakthrough moment: Diks’ father partnered with renowned Dutch footwear designer, Charles Bergmans, on a sandal collection. It upped the brand’s style ante immediately and sales took off. “They were a little more narrow, a little more feminine and came in all sorts of colors,” Diks recalls. “They were not so ugly anymore.” In fact, two designs from those early collections are still in the line today. The Nimes sandal, in particular, remains a bestseller.
After a couple years, Diks took over management of Wolky’s European and Far East markets, while his father concentrated on the U.S. He quickly began skewing the brand younger in terms of its target consumer, styling and marketing. Over the past 15 years he has positioned Wolky as an established everyday lifestyle comfort brand. Now that his father has decided to slow down a bit beginning this year, Diks will oversee the entire business and is embarking on a similar strategy stateside.
“It’s a fresh opportunity to make the brand younger and expand into more of a year-round business,” he explains. Diks notes that the change won’t involve any abrupt shifts so as not to alienate its retail partners or customers. For the most part, it will be business as usual out of the Phoenix office/warehouse (managed by Rozanne Young since 2000) while Diks focuses on line building in order to introduce a broader, younger array of styling with a particular emphasis on expanding its fall offering. A huge asset in this endeavor, he notes, is the state-of-the-art factory Wolky owns in Mexico. The factory (opened in 2002) enables Wolky to stay at the front of the line, so to speak, when it comes to product design and development. “We can make whatever we want, whenever we want,” Diks says. It also enables the company to run an extensive open-stock program and, a bonus, the lead times are incredibly short.
Diks knows he has his work cut out for him. Expanding in the American market is no easy task. It’s huge, diverse and the retail game is quite different than in Europe. Nevertheless, he’s embracing the challenge. “I’ve been doing the job in Europe for the past 15 years,” he says. “It’s the right time for me and for Wolky.” Diks adds the goal is to build long-lasting relationships with its retail partners. It’s an effort that includes product, in-stock programs and not selling direct to consumers. “We are not a retailer,” he says of the latter. “Our business is making and delivering shoes to our retailers for them to sell.” Diks believes selling direct to consumers online would provide a short-term gain at the expense of retailers, and that’s not a long-term survival strategy. “Our shoes are best sold in stores where the staff can explain our quality and comfort aspects and the difference they make for wearers—why, for example, a leather-lined, removable footbed is better than a cork inlay,” he says. “So why would we slowly kill them through our own Internet sales?”
Wolky’s business philosophy is steeped in long-term vision. Being family-owned is a key component of that approach. “We are working to build the company for the long term—to be in business 20, 30 and 40 years from now,” Diks says. “It’s not about selling 500,000 pairs this year and it must arbitrarily be 700,000 pairs the next. It’s about growing at a rate that’s best for the company and our partners.” For Diks, it’s one calculated step at a time and, always, a labor of love.
What is Wolky’s biggest challenge in the U.S. market right now?
This market presents a tremendous opportunity, but it all starts with our collection. Specifically, the challenge lies in our ability to become more of a year-round business in this market. We are well established in the spring season, but our biggest goal is to expand our fall business. That had also been the case in Europe 15 years ago, but now we are seen as a year-round brand in that region.
How receptive do you think retailers will be? There’s a tendency to box brands into certain segments—an issue even Ugg has had to deal with.
That’s true. But great shoes are the answer to that. Everything starts at the beginning—all the way back to that first style, in fact. That’s how Wolky got its start, and we are still selling some of those original styles today. We need that to happen more in our fall collections that would then allow us to build off of that success. We need that item that blows out of stores in the cooler months. There’s plenty of work to be done in order to build up that segment of our business.
How was 2014 for Wolky, overall?
While there are always issues that influence growth, like the weather, I would say our business overall was quite stable. The good news is we experienced some increase in our fall sales—two items in particular sold well. That represents a starting point for us from which we can build out.
With plenty of comfort brands and Euro comfort brands, in particular, in this market, how do you plan to break through the clutter?
It’s true that everyone pretty much calls themselves a comfort brand these days. For Wolky, our comfort story begins with our removable memory foam footbed that adapts to the wearer’s feet. In contrast, many other footbeds are cork inlays. In addition, our products are all made of quality leather and are leather lined. That presents a big difference at the point of sale. Our materials, construction and comfort benefits are truly unique and beneficial. And while we are a premium brand, we are not as expensive as some other Euro comfort brands. Our spring collection ranges from $120 to $190 retail and fall product spans $140 to $250 for tall boots made out of Portugal.
Is Wolky comfort, wellness, walking…All of the above?
At the end of the day, Wolky is a fashion comfort brand. We always start with the comfort aspects. In fact, our motto is: “It’s what’s inside that makes the difference.” Our materials and unique construction make a difference. We believe our products truly benefit our customers, who range from people with extreme foot ailments to those who appreciate and love comfort without looking like they are wearing “comfort” shoes. To that end, we believe most consumers make choices based on looks and not comfort. That’s why we want Wolky to be a lifestyle choice that also happens to be for the good for your feet.
In addition to making a quality product, what are other Wolky attributes that might be attractive to retailers?
For starters, our huge in-stock program. The fill-in possibilities with Wolky are enormous. Almost 60 percent of what’s in the line during a season is stocked in our warehouse in Phoenix. We can ship daily. Plus, since we we own a factory in Mexico, we can follow up on orders very quickly. If, for example, a pink sandal is selling well, we can order 500 pairs immediately and, two to three weeks later, it’ll be available at retail.
Out of China that’d be two or three months.
Exactly. Even if we made it in Portugal, it would take longer and it would cost a lot to air freight it to our warehouse. From Mexico, it’s one day by truck. And, unlike the possibility with our factory partners in Portugal and the Far East, we will not be bumped from the front of the line. We also always knew that the open-stock capability was a much more important factor of doing business in the U.S. In Europe, we pre-sell 90 percent of our line and 10 percent is done through re-orders. Here, we pre-sell 35 percent and 65 percent is done through re-orders.
Um, which is easier?
Asking that question is answering it (laughs). But that’s why it’s important for us to stay focused and make shoes that we are sure of. We can’t stock 250 styles in a range of colors. That’d be crazy. Fortunately, most of our retailers here prefer items and don’t buy so much of a collection. They want to maximize the sales in every way on those items, be it different materials, colors, combinations and so on and so on. But that’s good because it enables us to make a commitment with greater confidence on our in-stock inventory.
The flip side to this buying approach is a reluctance to introduce new styles.
Yes. Like everything in life, there’s a good and a bad side. It makes it more difficult to introduce new product. That’s why a lot of stores are locked into same styles with little change. We believe it’s important to introduce new styles, but our approach is that they not be too high risk.
Has the Birkenstock-led comfort sandal trend of the past year benefitted Wolky?
When a comfort sandal brand is in fashion it can attract people to buy other comfort sandal brands. So it’s nice, but it doesn’t really have much of an impact on our sales. We do not look to our competitors for help in growing our business. We are focused on our own lines, building them with an American twist when necessary. Eighty percent of our collection is the same in all markets, but the balance is done specifically for the tastes of American consumers. That’s just common business sense. America is a different market altogether than Europe, and if you want to succeed here you must be flexible enough to adapt to that specific situation. Along those lines, it helps that we have been with all of our factories for 15 to 20 years. It ensures stability and quality. Moving around for $1 or $2 in savings can bring on more problems than savings. We have built solid relationships with our factory partners, and if we sell a lot of shoes, then they are able to make a lot of shoes. That’s to the benefit of all of us.
Speaking of selling shoes, Wolky doesn’t sell direct to consumers. Why?
It’s no secret that there’s a lot of pressure on independents of late, mainly due to the Internet. That’s why we give orders off our site back to our retailers who have the order in stock. We prefer to work together. If a consumer searches for our shoes online, that independent retailer will most likely never come up. Only the big-name retailers and Wolky come up in that search. So this gives them a chance to get a sale. Also, we are not a retailer. We want and need them to sell Wolky. It’s better if we can learn to live together.
Many brands do not follow this approach. Why?
Because they probably think they are earning more money. It’s a short-term opportunity, and maybe they don’t care beyond that. We believe, however, if we don’t work together, those businesses may not last. We want our shoes in good stores in the United States, and many of them happen to be independents. We want consumers to see our shoes in those stores and be serviced and fitted by experts. That’s why we are focused on the independent tier, because our shoes need selling advice from professionals.
Can the independent tier survive in this Internet-fueled landscape?
I think they can. But you cannot survive if you sit in your store and wait for customers to come in. Then you might as well forget it. The Internet is something that you can try and resist, but it can also provide opportunities. That’s why we give them the opportunity to sell through our website. To at least benefit from our web store. Along those lines, we carry a much broader range of product than a typical independent does and consumers today are much smarter—they already know when they walk into a store and see a sandal or shoe that they want that it’s available in additional colors because they’ve seen it online. So why not install a small iPad kiosk in the store that features links to all of your suppliers to check immediately to see if a certain style or color is in stock? You’ve already fit the customer and now you can give them the choice of an in-store pick-up or delivery right to their home. More importantly, you don’t lose that sale. While this is not an every customer scenario, it’s probably five of 10 customers that will walk out of your store because you didn’t have exactly what they wanted in stock. Why not, for a minimal investment, potentially turn them into sales?
It sounds like common sense and seems easy enough.
If you don’t do anything to try and accommodate that customer, then you’re going to lose that sale. There’s no point in throwing up your hands and always complaining about the Internet. Sure it can be a real pain, but it also provides opportunities. At the same time, brick-and-mortar retailers need to embrace their service aspect. While a lot of goods are ordered online because it’s easy and convenient, at the end of the day it’s not social at all. A lot of women like to shop, particularly for shoes. I have an 11-year-old daughter who was born in the Internet age and regularly shops online, but she also really loves to go shopping with her mother. If you have a shop that offers good service and makes your customer feel special, then you have an opportunity. Of course, you must be online in some capacity too. One of the two today is not possible, in my opinion.
So, by and large, you are an optimist?
Yes. There are plenty of possibilities, and with them that brings opportunities. Retailers are often afraid of what they don’t have, instead of being happy with what they do have. I also believe consumers always want to have plenty of choices. Otherwise, it’s like living in North Korea. Nobody wants that—not even the North Koreans, probably. The challenge for retailers going forward is how they reach consumers. That used to be 100 percent through their physical stores and it may one day be a 50-50 split with online. Whatever the ratio, it should be as seamless as possible. If they are able to do so effectively, then I think they will manage and survive.
Where do you see Wolky in the U.S. in three years?
I hope that we are a little younger for a larger customer base, age-wise. If the mother is 60 and the daughter is 35 and they are both happy buying Wolky, then that’d be a success. That said I don’t have specific number sales-wise in my head. We just want to grow steadily. So any risks we take are much more under control. That’s why we don’t sell to certain large department stores, for example, where it requires being part of a daily sales program and us delivering our merchandise on wheels. We won’t do that. The risk is too big. Besides, that’ll only hurt our other retail partners who have helped build our brand.
Wolky is family owned, owns a factory, offers a large in-stock program, doesn’t sell direct online…Pretty unique amid this current business landscape, no?
In those ways, I guess we’re unique. My father and I believe, at the end of the day, we have to all work together. That may sound out there, but it’s true. If all the parts in the chain—retailer, wholesaler, factory, delivery guys, etc.—are happy, then I think we can become a much more solid company with more stable growth. I also believe most people want to do business with a stable company because it gives some peace of mind. While we are far from perfect, we are not the type of company that delivers shoes and that’s the end of the story for us. We are only happy if the end consumer is happy. We are not happy just because we placed orders. If the inventory doesn’t move, then we’ll only have a problem a year later.
What is the best lesson you learned from your father about the shoe business?
My father, who is still very involved in the business, loves what he does. He always wants to make it better, be it a particular shoe or the company as a whole. He is very devoted to his work. And while plenty of people are equally passionate and dedicated about trying to improve their businesses, my father has always gone about it in a very humane way. When people speak of him, they always comment on how friendly he is and what a decent man he is. That’s how I know he went about his business the right way.
What do you love most about your job?
The variety. I’m speaking with you today, tomorrow I’m working on a collection for the American market and on Monday I travel to Vietnam to check in on some of our latest collections. The enormous amount and range of people I meet and work with means not one day is the same. Plus the ability to travel and run our own company provides me enormous freedom and flexibility. I also really love shoes. The fact that it all starts from nothing, basically. There’s a sketch, then making the last, the leathers, fitting, samples, alterations…It’s an entire process that is always interesting and challenging. Then it’s on to the sell-in and, finally, learning how the sell-through performed.
A person wearing a pair of Wolky shoes is the final confirmation that all your hard work was a success. It’s pretty much conjecture and hope up until that point, right?
Exactly. It’s one of the reasons why whenever I’m in an out-of-the-way place during my travels and see a person wearing a pair of our shoes, I always try to take a picture. I’ve got shots at the Great Wall of China, in the African bush, at the Berlin Wall…It always gives me a thrill to see people wearing our shoes. As it should, because if it didn’t, I should have become a doctor, a postman or something else instead.