With new digs and two new brands added to the portfolio, Kevin Mancuso, CEO of White Mountain Footwear, explains why the timing is right for rapid expansion.
It’s a good sign when a major national retailer asks a wholesaler to develop a new brand from scratch rather than go the usual route of using an established name brand. It shows admiration and trust that the wholesaler will deliver the goods. That’s what White Mountain Footwear (maker of White Mountain, Rialto, Cliffs and Summit brands) has been doing for nearly 40 years. The company has a proven track record of delivering quality, on-trend product (on time and in full) that sells through, generating a buzz among shoppers. In short, the request is a testament to White Mountain’s shoe-making chops. Its styles do the selling regardless of the name imprinted on the sock liner.
In this instance, the target audience is a junior customer—one the retailer believes needs something fresh and exciting. That’s how it was presented to Kevin Mancuso and his team a year ago when the retailer in question (who he prefers not to name) approached White Mountain about creating a new brand. The brand is Seven Dials, a contemporary line catering to women from 14 to 30. The debut fall collection of boots and booties ($59 to $79, suggested retail) and shoes ($39 to $49) spans the latest fashion trends in terms of silos, colors, materials and embellishments. Think plenty of fashion boots, from shoeties to over-the-knee styles, and lots of heavy lug sole bottoms. But, don’t bother looking for sneakers. Mancuso says Seven Dials won’t go into that (crowded) space. Similar to Steve Madden, but more affordably priced, Seven Dials is “trend correct” in Mancuso’s opinion. He believes it’s a solid bet for its retail partners, given their need for something fresh. “Some brands were having their difficulties at the time and it was a combination of right place, right time, right pricing, right styling,” he says. “Retailers have been more receptive to something new and fresh. Timing is so important, and we were able to strike while the iron was hot.”
What makes the Seven Dials launch even more unusual is the fact that the common route in the junior business is through an established brand name acquisition or license agreement. In fact, Mancuso admits White Mountain was looking into doing just that when this retailer “smartly suggested” creating a brand from scratch. “They felt comfortable with who we are, what we are capable of, what we are trying to achieve and what they wanted,” he says. “They didn’t think the name was as important.” As for that, Seven Dials is a reference to a trendy section of London near Covent Garden where seven roads converge into a rotary—seven dials. The name, pardon the pun, has a nice ring to it and, for shoppers in the know, references a fashion hot spot. And while Mancuso believes there are plenty of advantages to launching a collection under an established brand name, it always boils down to product. “Product is king and the shoes must speak for themselves,” he says, adding that he has high expectations. “I’m very confident that once other retailers see the success I expect to have this season, they’ll react in a positive way too. I would anticipate that Seven Dials is going to turn into one of our larger divisions.”
Beyond good product and the fortunate timing of the Seven Dials launch, there’s White Mountain’s record of success. In an era where timely and efficient sourcing is becoming increasingly difficult and expensive, the risks of partnering with wholesalers who have either spotty or short resumes are too great, not to mention costly. Mistakes on this level can be really big. The industry, in this regard, is increasingly becoming a business of too big to fail. That’s why Mancuso believes a key factor in a wholesaler’s ability to land big orders today is its established relationships. How solid are they? How vetted? How flexible? How successful? Mancuso believes White Mountain has all those bases covered—and has for decades. “We’ve always developed wonderful relationships with our customers and have always tried to build a better mousetrap—giving them a little bit more for their money and perceived value,” he explains. “I believe they have developed a comfort level of doing business with us over the past 35-plus years.”
Mancuso believes this comfort level has contributed to White Mountain’s recent growth spike, which includes the launch of the upscale Summit brand and now Seven Dials in the past year and a half. Its four other divisions are all consistently beating sales plans and its e-commerce site is growing exponentially. Business is growing so much that the company recently moved into bigger offices in its current Westwood, MA, base. “We really needed a bigger office to accommodate all of our recent expansions of late,” Mancuso reports. The company had been in a 10,000-square-foot facility and the new space, about a mile away, offers an additional 7,000 square feet. “We’ve had a great year so far,” he adds. “We’re very pleased with the way things are going and we have no complaints at all.”
White Mountain’s recent expansion evokes images of a teenage growth spurt, albeit in the company’s middle-age years. What for decades had been one brand (White Mountain) and a steady private label division, has mushroomed, in the past five years or so, into six divisions. Call it a case of better late than never. “It’s fair to say that we’ve probably been busier than ever,” Mancuso says. “It’s been very challenging, but also a lot of fun and a lot of excitement.” He chalks the growth spurt up largely to timing, a willingness to adapt and change, and having the right people to make it all happen. “People make up companies, and the strength of our company is our employees, top to bottom,” he says. “They are free to speak their mind and, even if we (by that he means White Mountain’s four partners, which include himself, brothers Nick and Greg Connors and Peter Fong) don’t always agree, we’ll listen.” Mancuso adds, “We’re not opposed to change, which is probably the biggest challenge for all of us as we get older because no one likes entering unchartered waters. But I think we have the right people on board to help steer us.”
Did you ever think White Mountain would undergo such rapid expansion nearly 40 years into the game?
It wasn’t necessarily the plan. But I think a combination of the right timing, having the right people and the overall mood in the marketplace are the factors behind it all. While we should probably change our name to White Mountain Group, what the expansion and growth allow us to do is have complete representation on the entire floor. We really needed to add a few new brands to be able to achieve that goal. Now with the diversity of our brands we’ve become much more important to our retail customers. We are able to have a much greater impact with them. It’s a very positive adjustment that we are making as a company. The recent additions have rounded off the entire package and every line complements one another.
How important is it to be a multi-brand resource amid today’s retail consolidation?
It’s very important today to have complimentary brands. When you sit down with the major retailers they want to feel comfortable with the company they are working with. Now, with household brands like Ralph Lauren, Chanel, Calvin Klein, etc., there’s a certain comfort factor and brand identity that crosses into ready-to-wear, accessories and footwear. Our company, in contrast, has always been footwear only and is not necessarily a household name. So, we’ve always been compelled to offer a greater perceived value in our product. That’s part of our culture today and goes without saying. That said, in order to grow today, you need to be in different market grids and you can’t do it all under one label, nor does it make sense to do that. A nice $150 stiletto pump with a White Mountain sock label doesn’t make sense, for example, when I’m also selling styles under that label for $79. You need to have different lines to stand for different items.
It’s almost a requirement of business today, correct?
At one time under just the White Mountain label we tried to achieve all of the above. But as retail became more specialized, one brand couldn’t be all things to all people. In other words, the shoes a mother buys for herself are not desirable to her teenage daughter. So, there’s a justification to have a junior brand (Seven Dials) as well as a moderate brand (White Mountain). And there’s a justification to have a dress brand, which is what Rialto has become. And a comfort-casual brand, which is where Cliffs is evolving. And the Summit brand is our high-end brand for a consumer that appreciates both the high quality [priced between $150 and $400 retail], beautiful fashion and the cache of it being made in Italy. Overall, we felt the need to bring to the table five distinct lines that each have their own identity and can stand on their own. More importantly, our retailers seem to agree.
Easier said than done, of course.
Listen, this is far from a cakewalk. It’s not easy. I think business is more difficult and more challenging than ever before. I don’t think anything is easier. But I guess it’s in our blood. The four [partners] enjoy it. We have our differences, but generally speaking, at the end of the day, we come around to whatever is best for the company as a whole. We also have great middle management at our company. People who come to work for us have tended to stick around for a long time, which I think is reflective of a healthy work environment. In general, we are very excited right now about the expansion and the opportunities they present for us going forward. Last year, every division experienced growth. And while self-praise is no praise—that’s another motto I use all the time, by the way—we’ve been fortunate and have been able to ascend from year to year and we are looking forward to continued growth.
In what ways might your company’s work environment be unique?
It starts with getting people on our team to be all on the same page. In that respect, we operate a little bit differently where, for example, our line builders critique one another and share thoughts and ideas on a regular basis. There’s a lot of collaboration within White Mountain. Obviously, they are responsible for each of their respective brands, but I may have the Cliffs or White Mountain line builder critique the Seven Dials line. And I don’t mean it‘s just a bunch of nice compliments tossed their way. I mean really critique it in front of everyone and then I’ll determine what styles I want to keep in or out of the lines. Sometimes it can be a little uncomfortable to have a line builder critique a colleague’s work, but we do it in a way that is constructive.
Along those lines, how would you critique Summit?
It has been extremely well received to date. We are very pleased and it’s nice being back in Italy again sourcing shoes. At one time back in the ’90s we were the largest importer of footwear out of Italy. We were bringing in a tremendous amount of clogs. With regards to Summit, we’re bringing in much nicer merchandise—it’s all leather lined and incredibly crafted shoes. It’s really beautiful product.
And “made in Italy” still possesses that luxury cache?
I think there’s still a cache related to Italian product, particularly if it’s truly Italian-made product from start to finish. In particular, I think there’s a consumer base out there that appreciates the quality and the value that Summit offers. It caters to a 25- to 50-year-old woman. She’s a sophisticated shopper who is serious about fashion and appreciates fine quality as well as a good value. What’s more, we’ve always been in the leather business and this is an opportunity to get back into it in a major way. We plan to stay the course as Summit is growing nicely from season to season.
Might this consumer be buying Summit instead of name-brand designers?
I think it’s in addition to. A woman who enters a store looking to buy Prada or Chanel is going to buy Prada or Chanel. But for a woman who wants to buy great fashion at great value and has an appreciation of it, then I believe they are going to react in a positive way to Summit—and have been. The fact that the U.S. dollar has gotten so much stronger against the euro has also helped. Right now, for instance, we can offer leather-lined pumps with leather outsoles for under $125. We even have some leather ballet flats for under $100 retail. As always, we are putting all of the extras into the product. I don’t think anyone offers the value we do for this level of product. These are great, great value.
Any thoughts on how long this currency windfall might continue?
Obviously, I have no control over the economy of scale and my crystal ball broke a long time ago, but I would say over the next two to five years, hopefully, the dollar versus the euro will be advantageous for us. Hopefully, during that time span we will continue to deliver great product at attractive prices and make our impact in the marketplace to the point where the consumer becomes accustomed to the Summit name and will want to buy more in the seasons ahead.
And you will be able to meet the demand within those Italian factories?
Absolutely. We are dealing with a select group of about six factories primarily based in the Tuscany region. In fact, we are working with the same agent that we did many years ago. So it’s been a very enjoyable and exciting experience.
When you last left Italy, did you ever think you might return one day to source shoes?
No, particularly with how the dollar had gotten so weak against the euro. And, quite frankly, we never would have come back if it weren’t for doing a better-grade line like Summit.
I guess if you’ve been in this business long enough you learn never to say never, right?
Correct, you can never say never. And actually what’s happened because of this venture and the favorable currency rates, is we’ve even tested some product for White Mountain and Seven Dials. Because those factories are ahead of the fashion curve, we’ve been able to react quickly as a result. It’s a limited scale, but we are able to get a much faster delivery and can easily save six or so months. For instance, we saw some clogs that we liked when we were visiting the factories this past March. We bought the styles in April and we are going to deliver them in the end of June. That’s pretty quick. We were able to buy about 10,000 pairs, but trust me, they would have been happy with a bigger order. Now, if I wanted that shoe made in China, I’d have to send it there and do all the development work, which would take four to six months to finally get it shipped to market.
Speaking of which, there are major sourcing shifts now and in the works out of China. What’s your take on that?
There’s no question that China’s becoming more challenging. We’ve already begun testing the waters in Vietnam and Cambodia. Some people that we have worked with in China have opened up factories in those countries, so it makes it a little easier for us. We’ll test the waters before we dive in. In addition, the potential new Trans Pacific Partnership (TPP) trade agreement could open up sourcing possibilities in other countries. That said, 95 to 98 percent of our product is still manufactured in China and there are still plenty of factories there that are willing and able to make footwear, although they aren’t in the same location where we first started.
Did you ever think a few years ago that you would be sourcing shoes out of Cambodia?
I’ve been around so long that it seems to go through cycles of about 15 to 25 years in one country or region before moving onto another. We’ve gone from Italy and Spain to Brazil to Taiwan and to China. We’ve also been in Chile, the Dominican Republic and India, by the way. And, of course, we started in the U.S., first in the Northeast and then to the South. As the cost of living and labor has increased in each of those countries, another third-world country has come online. But with regard to Vietnam and Cambodia, for example, they still lack the infrastructure and all the components still come from China. That’s why I expect China to be heavily involved in footwear manufacturing for at least the near term. And there are many areas within China that have yet to be developed so I suspect the footwear industry isn’t leaving entirely any time soon.
Closer to home, what’s your take on the cork footbed trend?
The cork footbed business, in particular, continues to be good. It has been our bailiwick for the past 15 or 20 years and since it became so fashionable, it has enhanced our business. We’ve added a lot of embellishments—sequins, stones, etc.—and we introduced fashion bottoms that have all been very successful. We’ve been able to take advantage of the fashion trend and maximize sales.
Is this classic comfort construction and look a long-term trend? Meaning, do you envision consumers wanting to be uncomfortable again?
I won’t necessarily say that cork footbeds are here forever. But I do believe comfort features are here to stay. While aesthetics will always be the most important factor in the purchase decision, comfort is now expected. It’s no longer seen as an added benefit. Along those lines, there’s no question fitness, health and wellness have become important parts of our daily lives and society has become so casual. That is not going to go in reverse. The athleisure trend, in that regard, is not going away. It’ll continue in some form. That said, whenever you think something is never going to leave, something changes.
So the dress shoe market will not go the way of dinosaurs?
In fact, dress has been making a very nice comeback of late. The feedback we’ve received from all of the major retailers is that dress has been very successful. In particular, Rialto, which has always been dress/novelty oriented has been performing exceptionally well. Now, does that mean every woman is going to run out and buy high-heel shoes? No. But I definitely feel it’s never left entirely and that it’s just been tweaked. Meaning, heeled shoes are not going to be as prevalent as the way they were back in the ’70s or ’80s when every woman wore a pair to work. But new fashions always have a way of popping out of the ground. For example, young women are wearing heels on the weekends when they go to clubs. They are extreme, but they are high heels. And professional women still wear heels and while they may not necessarily be what people of my generation would think of as a dress shoe, per se—it may have a blocky heel or it may be an open-toe shoetie—I definitely think the pendulum is swinging more to what we would call a dress heel look.
What’s your general take on the state of retail?
Retail in general has been pretty good of late. I think that consolidation is going to continue. In particular, I think the industry is going to watch Macy’s newly launched Backstage [off-price] concept very closely. I predict it’s going to be very successful, by the way. I also think that e-commerce will only get stronger. I also believe that online gives exposure to brands and, in turn, can drive consumers to the stores as well. My point being, I don’t think the department store is going out of business. But I do believe shopping needs to become much more of an experience—an event that has to be fun. It has to be an experience that makes the consumer want to come back. People like to shop. Sure, it’s convenient to shop online, but at the same time there’s a social element that’s missing. People like to interact. It may require a different sort of service commitment that creates a compelling reason for the consumer to want to leave their house and go to the store. It definitely can’t be business as is. To that end, Nordstrom and Macy’s are tying their online business with their in-store experience. Customers can buy it online, return it in-store or shop the store and have it shipped. They are trying to make changes. You look at the financial statements of Nordstrom and Macy’s and they seem to be doing it right. Overall, retail is constantly evolving and there will always be something new and different that comes along. It’s probably something that the younger generation will come up with and figure out. They always do.
Where do you envision White Mountain in three years?
There’s already a lot of diversity within our company. We have a very multi-national makeup, spanning Europe to Asia to South America and the States, and I would imagine that to continue. Right now we don’t need to build any new brands … at least I hope not [laughs]. We need to consolidate our position to make sure we execute our two new lines. That’s what our main focus will be while not taking our eye off the ball of our other lines. We are also bringing a new generation into the company. I believe having youth come into the company is extremely important. We have a nice balance between youth and experience today. We are a relatively young company overall, so we are very excited about the foreseeable future and I think we can be a player.
You sound as energetic as ever. No plans to retire any time soon, correct?
I wake up each morning and look forward to the daily challenges of running the business. I love launching new lines. I love the shoe business in general. I love the people. I’m particularly enthralled by the people I’m surrounded by here at White Mountain. I still get excited when new samples come in and by every order that gets written, particularly the big ones [laughs]. I enjoy the action and the thrill of the chase from season to season—from the sample stage to getting orders to delivering the product. It’s gratifying if the product is successful at retail. And that’s how all of us feel here. Yes, we want to be profitable and make money—everyone is in business to make money—but at the same time we’re also delivering a product to the consumer who has to be pleased with it or they will not come back and buy again from us. And while we’ve certainly made our share of mistakes, generally speaking we’ve stayed the course and it’s proved to be the correct one for us. In particular, we feel that there’s real potential in the next two areas we are going after, which ironically are two opposite ends of the totem pole in junior and better-grade. We are excited by it.
What’s not to love, right?
I love it all and it keeps the adrenaline flowing. My partners and I continue to enjoy this business. It’s fun and I guess when it stops being fun, that’s when I’ll call it a day.