Scott Home rarely minces his words. After a lifetime slinging shoes—starting out in retail and, for the past 20-plus years, as a wholesaler—he’s earned the right to speak freely, bluntly and honestly. For starters, he’s pretty much seen, heard and lived through the industry’s ups, downs and upheavals. He’s a survivor and a lifer. He speaks from experience, and his career track record (includes managing epic sales runs at Dr. Martens and Diesel) speaks for itself.
Home is a throwback. He’s a product fanatic. He believes wholesalers, retailers and consumers all deserve the best value possible. Above all, Home loves this industry dearly, even of late when he confesses there’s plenty to dislike about it. But old habits die hard and first loves are often forever. Home is living proof of that.
Here, the industry veteran sounds off on what needs to change (in a perfect world) and why he’s relaunching Fashion Major Brands soup to nuts. He’s blunt and honest. Expect nothing less.
What’s your current industry state of mind? Troubled and confused.
Exactly what is troubling and confusing you? Trying to figure out how to keep my independents and the big guys both happy, while at the same time trying to avoid markdowns.
How’s business? My sales are good this season, and I didn’t buy tons of inventory, so my stock position isn’t out of control.
Many have cited a cold, wet spring for slow sales. What do you attribute your success to? Eighty percent of our shoes were made in our own factories, so we controlled quality and on-time deliveries. Nobody else in the marketplace will have those styles. We’ve also incorporated some great comfort features. We’re offering amazing, quality product at great prices. The consumer isn’t stupid and recognizes the value of our shoes. Product is king.
Any surprises of late, good or bad? There are surprises every day, both good and bad. The biggest (bad) surprise is when we have a shoe that’s selling extremely well yet it’s impossible to get a re-order. Lots of retailers are hesitant and don’t want to be caught carrying too much inventory—so much so they’re losing potential sales. I understand their concern, but this has always been a risk and reward business. That hasn’t changed. It’s frustrating to see that money just left on the table—for both of us! Similarly, too many retailers are marking down shoes too early, which is more lost money. As soon as inventory levels get a bit high, they mark down the shoes. That’s having a negative effect on the entire industry.
Is it a retail apocalypse, or is that overblown? Apocalypse, no. A serious need to constantly reevaluate and adjust business practices, definitely.
What are some adjustments that you’ve made in the past year? In addition to working more on our DTC (direct-to-consumer) business and cutting expenses, we’ve adjusted who we sell to. We’ve re-written our strategic plan to include more specialty retailers that are lifestyle stores, websites and catalogs. We’re in the process of building a strong independent base of retailers because we’re finding that our target customer likes shopping in those stores. For example, our business is thriving in the Southeast because of the many fashion boutiques in that region. They’re not strictly shoe stores, and they’re doing very well. I believe it’s because most of those retailers don’t come from a shoe background and don’t have bad shoe buying and selling habits. They’re doing things differently. Women are flocking to those shops to get that personal service and a unique selection, along with a good value, which is now almost non-existent in department stores. They can also shop for entire outfits. With the bigger chains and department stores being more bottom-line driven, I don’t think they can even afford to do it all.
Is the U.S. over-retailed? I don’t think so, especially with good retailers.
Is DTC necessary for a brand’s survival today? Absolutely! Previously, I didn’t want to take sales away from retailers, but it’s become a matter of survival. I can control my own growth while avoiding some of the overly cautious buying and markdown craziness that’s going on. I can also show styles that might not have been picked up by retailers.
What about retailers who see DTC as unfair competition? First, you need to have some exclusive styles on your site as well as for your retailers. Secondly, you need to keep the shoes at full price until an agreed upon time to mark it down to clear out a season’s inventory.
Is private label a viable response for retailers who believe they’re losing sales to DTC? Private label is good for many accounts as it helps both vendor and retailer margins. But carrying too much private label causes you to lose the importance and value of brands. Strong brands help draw traffic into stores. You need the right balance.
Is Amazon still at the root of this market disruption? Amazon and retailers selling on Amazon Marketplace. That’s why we’re trying to work with retailers who realize it’s a problem and don’t sell on that platform. We’re having lots of dialogue with retailers about the trouble that causes—starting with the negative effects on their margins.
What’s your biggest industry pet peeve? The constant change in fashion as well as constantly having to change business practices to keep up with a rapidly changing industry.
But isn’t that how it’s always been? Yes, but in the past the fashion direction by category was more defined by season. It’s all over the place now. Also, everyone wasn’t scrambling to find the next big thing. Trends aren’t allowed to marinate as much anymore. We’re all racing to the next trend without maximizing the potential of the current ones. That’s more money left on the table. Even if there’s a strong trend, it doesn’t last long.
If you had a magic industry wand, what are the first three things you’d change? Realistic selling seasons, more in-store shopping and less need for the vendor to take on all the liability for inventory.
Despite these challenges and concerns, are you optimistic for your business and the industry overall? I’m extremely optimistic! We’re in the process of relaunching our entire company. We’re building a new company, spanning everything from distribution strategy to warehousing. It’s very exciting! Thank God there are 24 hours in a day and 7 days in a week, because it takes all of that to keep up with all the changes in ways to do business.
A complete company relaunch is a bold undertaking yet necessary? Again, it’s a matter of survival. The need to cut expenses to the bone—without hurting our business—is crucial to get some meaningful margin out of our sales. With all the demands from the retailer these days, margins are very thin. There is really no other choice. But I believe this effort will be all for the better—for us and our retail partners. I’m not one to waste time—ever. Our relaunch is a rebirth. We’ll run leaner and faster with, as always, killer product.
As a wise old Shoe Dog, is there anything about this business that surprises you anymore? The only thing that surprises me is that I’m still doing it. I guess that proves that I’m not really all that wise! But this business is in my blood, and I love it. I love many of the people that work in it. I also have a passion for the product that keeps me going. While I like to bitch about everything changing, the hard work that it requires to adapt, how some aspects of the job aren’t as much fun anymore…if it wasn’t challenging, I’d be bored and feel much older than I actually am!