If it could go badly, it did. If it could fail, it did. Welcome to 2020, the year where it seemed nothing went right. The economic meltdown, brought on by a killer pandemic, unleashed death and despair on an epic scale, with political division, racial unrest and Western wildfires serving as a dystopian backdrop to an already full-blown horror show. The fallout in the footwear industry was no better: unprecedented furloughs, layoffs, production freezes, canceled orders, returns, plummeting sales and closures. The new normal, ushered in at warp speed, is anything but normal in regard to how millions of consumers dress, work, shop, live…you name it. Brands and retailers, forced overnight into a Hunger Games-esque arena, are trying desperately just to survive.
Then there’s the story of Lamo Footwear, a reassuring bright spot in a sea of darkness. Celebrating its 25th anniversary this year, its sales are not only up, they will smash records. For starters, it’s good to be in the slippers business when nearly the entire country flips a switch to work and attend school from home. But COO Jerry Breig says there’s a lot more to it than a slippers windfall or an anniversary sales bump contributing to the company’s expected 35-40 percent increase in sales in 2020. In fact, Lamo has been on a steady growth path over the past five or so years. Ever since Breig joined the Corona, CA-based company 10 years ago he has been methodically positioning it for scalable growth, expanding the offering beyond sheepskin styles while servicing the unique needs of its growing customer base that spans surf boutiques to big box chains. That scalability, Breig believes, has been a key factor as to why Lamo has kept pace with the unexpected explosive growth this year without flying off the rails.
“I built a scalable business from the time I came here, because that’s what I know,” Breig confirms, crediting mentors from his early skate shoe days for the approach. (He was employee No. 1 of DVS Shoe Company, which rocketed to nearly a $100-million entity during his nine-year tenure.) “I had some really great mentors, one of whom was Mark Feig, who was instrumental in the growth of Nike in the ’70s and was CEO of DVS for several years when I was there. I learned from him to always build your business scalable. No matter what volume level you are at, if you put the right people in the right places you can build your business quickly and properly. And if you do have an explosion, under the right supervision, you can manage it.”
Take Lamo’s Cozy 365 program, for example. Aimed at making slippers a year-round business, the program was successfully introduced a few seasons prior and, subsequently, put the company in a strong inventory position going into 2020. (Many other slippers brands remained focused on the second half of the year for carrying a larger inventory.) “We were confident that we would carry through business,” Breig says, citing its extensive marketing efforts that, essentially, drove home the message that tile floors are cold year-round. It helped that Lamo’s company-owned factories only had a delay of about three weeks before resuming production. More importantly, Breig says Lamo bucked conventional wisdom that saw many companies cut back drastically or shut off production entirely. “We definitely did not turn off the faucets,” he says. “We knew it would come back to us, and we wanted make sure we would have goods to cover our customers in the fall.”
Another key aspect contributing to Lamo’s success this year harks back to Breig’s retail roots. (He cut his teeth as the footwear buyer for 118 Board Shop, which spawned DVS Shoe Company.) He speaks the language and understands what retailers need most from a vendor. For example, soon after the pandemic kicked in, Lamo rolled out its Covid Relief program, offering retailers extended dating, discounts and ways to sell its products if their stores were closed. “We opened a drop-ship for all program that allowed even small boutiques to sell directly to their customer base,” he says, noting that many have mailing lists, catalogs and other ways of connecting with their customers. Breig reports boutiques from across the country have taken advantage of the program. “We worked with our logistics and warehouse partners to make it is as seamless as possible, and it’s been great,” he says. “If we can help any customer maintain their business at any level, then I feel like we’re doing a good job.”
As early as mid-April, Breig says Lamo began to realize that 2020 might be unlike any year in its history. That’s when it started registering daily and weekly sales numbers in its drop-ship and DTC channels that it normally sees October through December. Sales among its sporting goods and farm and ranch partners, many of which stayed open as essential businesses, also began spiking. Lamo also began adding a roster of new accounts in desperate search of slippers. “It was really eye-opening, and it has picked up steam since,” he says. “We’ve turned product over two or three times since this summer with some customers, and we’ve been able to maintain a healthy inventory.”
Not that Breig ever would have sought this pandemic-induced sales infusion. Asked to sum up 2020 in brief, he says, “Really tragic.” In fact, last December Breig was more than content with the modest growth the company had forecasted for the year. His team was eagerly anticipating the numerous anniversary celebrations planned at various trade shows as well as the Spring ’21 debut of its Baja collection of non-sheepskin styles led by its new Lamolite soles and backed by a 30-day comfort guarantee. “I’ve been in this industry a long time and our Lamolite soles are one of the most comfortable products that I’ve ever worn, and we put our money where our mouth is,” he says. “It’s a huge step for us to put that claim out to the industry.” Equally significant, Breig says the collection continues Lamo’s path from a fur-lined, niche business into a complete casual footwear brand.
Breig is confidant Lamo is well on its way to achieving that goal, guided by his overarching philosophy to think big while acting small. “I don’t like to use the term ‘think outside the box’; I like to think there is no box,” he says. “We have to continually think of interesting and exciting ways that allow our consumers to get our products, whether that’s through DTC, third party ecommerce or stores they like shopping in or ordering through our drop-ship program. We try to build programs that work for anybody.”
Breig’s master plan also involves patience. The cautionary tale of brands that burst onto the scene only to collapse under the stress of weak foundations is all too familiar to the veteran of the action sports industry. Brieg is fine with Lamo playing the role of the tortoise, if necessary. This is an ongoing journey, not a 100-meter dash. “We’re looking at our business with eyes wide open, focused on connecting with our retailers and consumers in every way we can,” he says. “My past experience led me here and I think together we can build Lamo to a size that can make a really big impact in the industry.”
Many say 2020 has been the worst year on record for the industry, yet for Lamo it has been record-breaking. It’s good to be a slipper brand, for starters?
It’s definitely been a perfect storm for slipper sales as they’ve become the new work shoe. But we’ve been selling more than just slippers. It’s pretty much any kind of warm and comfortable product driving the boat. That said, it’s more than we could have ever expected to grow. I’m very proud of our team. From one day one, we didn’t panic. If anything, scaling back in any way would have been detrimental to our business. Even if we weren’t in the slipper business, the way that we’ve put this company together we would still have been able to at least maintain business this year, and we’re not a heavily focused DTC business. We’re a boutique- and ecommerce-driven company.
What has been the biggest change in behavior you’ve seen from your accounts this year?
Putting marketing and display money into different places, whether it’s social media or digital billboards. While we were already expanding these efforts before this pandemic, we’ve added some nitro methane and have taken it to another level. For example, we have a great customer in the Southwest, a chain of roadside gift shops, that we transitioned from in-store displays to a roadside digital billboards. Their business is up like 35-40 percent this year. People might think that everyone has been staying at home, but apparently that’s not been the case near them. We also typically do a lot of in-store marketing with accounts like Big 5 Sporting Goods and Sportsman’s Warehouse, but this year we successfully transitioned into targeted demographic digital marketing programs. Overall, it’s about transitioning from “they’re not coming into my store” to how do I still engage my customer base? We’ve done aa lot of different things than in the past and it’s helped our retail partners maintain engagement with their customers.
Are your accounts as rattled still by this pandemic as they were at the start?
There were some retailers, and I’m talking at the management level and not buyers, who were very scared in the beginning. Many who just shut down communication, in some cases for 60 to 90 days. But now that they’ve retuned to some level of business and are seeing some customers supporting them, it’s transitioned to more of a, ‘Hey, we’re going to get through this’ mentality, especially the retailers who were strong prior to this crisis. The general feeling being not only is there a path out of this, but that they’re already along it.
Can they handle a second wave lockdown?
Because of what retailers learned during the first wave, I think they’ll be able avoid the same reaction. They’ve learned ways to adapt and I don’t think we’ll be as much of a an, ‘Oh my God, what’s happening!’ scenario as the first wave.
You’ve been in this business for 25 years, having weathered recessions, 9/11, the Great Financial Crisis, Retail Apocalypse…you name it. Where does this pandemic rank?
Nothing comes even close. People have learned a lot of hard lessons, as well as ones that will be beneficial to their well-being going forward. It’s going to be interesting to see how everybody transitions out of this. Hopefully, we don’t have to deal with anything like this ever again—at least not in my lifetime.
So a vaccine comes along, everyone gets the shot, the virus is put in check…is there a return to any normalcy?
I think people will still have to get back to the right frame of mind to get back to any level of normalcy. Even so, that normalcy will probably not be the same as before. A lot of things that have changed will stay that way, like working remotely. I think we’ve proven that it’s possible to do that and still stay engaged. Also, I don’t think retailers will fully change their approach when it comes to the safety of their customers and employees. We, for example, started using (B2B platform) NuOrder and don’t envision that going away.
Meaning in-person trade shows may not be as important going forward?
We just want to give our customers more options to shop and order our product. At the end of the day, we want it to be easy for people to do business with us, whether that’s a consumer, a retailer, a distributor, a sales rep or our employees.
Do you think consumers will want to go back to shopping in stores to a level they did before?
My take has always been that footwear is one anomaly to online shopping. Even though online is still growing exponentially, plenty of people want to go in and try on shoes because it’s not just about the look. It’s the feel and the fit. I think a lot of people do want to get back to that type of shopping, but they want to do it safely.
Do you see Americans going back to work in offices—and maybe even wanting to dress up a bit?
I think dressing up for work has become a thing of the past and has been for a while now. The loosening of dress codes, especially in this day and age of technology, is not letting up. I also don’t think you lose much by having people work remotely in a casual atmosphere. If you get the right people on board then that shouldn’t be an issue.
So what’s your crystal ball telling you about 2021?
It’s saying Lamo is going to see exponential growth again. We’ve brought on some great new retailers this year, and they’re expanding their business with us for 2021. A lot of credit goes to our great outside sales team, most of whom have 20-plus years of experience in the footwear and sporting goods industries. We lean on them a lot to give us their view of the territories at the same time we’re looking at the grand scope of our business. Now do I envision 40 percent growth for next year? It would be foolish for me to expect that, but I know we could handle it. That said, I think we could see 20-25 percent-plus growth in 2021 with all these new partners in addition to growing with our existing account base. Overall, I look at Lamo still as an untapped opportunity.
Where do you envision Lamo in five years?
I believe we could be four or five times the size we are now, continuing to grow into a major player, not in just slippers but casual footwear as well. We are expanding internationally with good agency partners currently in the UK, Japan and Canada. We expect to be at a level where we’re competing with the big companies in our genre as our focus will remain on product, value and consumer engagement.
Is there a category that poses the most potential for growth for Lamo?
Not that we are pulling back at all on women’s, but we definitely feel we have a big growth potential in men’s closely followed by kids’. The sheepskin and fur-lined market has been dominated by women for a long time, but I think as slippers become more of the daily normal, men will want cool styles too.
Why might it be easier for Lamo to expand further into men’s than another well-known sheepskin brand?
I think the way we differ is we’re not trying to gender neutralize our products. We want to build great “men’s” footwear, which is more along the lines of a driving moc and casual slippers. We also need to breakthrough with product, because we don’t have the marketing muscle they have. I think what we’re doing now and what’s on tap is the right way to go about it. The success of spring/summer business this year proves we can do it.
Like the new Baja collection?
Yes, that collection represents the continued evolution of Lamo into an authentic casual footwear brand. It features our new Lamolite sole, which we spent a lot of time building. It’s a proprietary EVA outsole/midsole that that offers amazing all-day comfort. Retailers trust our value proposition, and Lamolite is another reflection of that. Beyond that, we always put forth our best efforts to make sure our retailers are treated with the upmost importance. We treat them as members of our family, not just as “customers.”
That approach must go back to your skate shop days.
Yes. I speak retailer—the language of margins and understanding what they need. It’s not just a numbers game. It’s about building long-term relationships, and working with each individually. We’ve built a brand in over 4,000 doors in the U.S. because we are true partners. Everyone knows product is king, but as I always say in our sales meetings, business is like a tree: you can’t grow big leaves until you grow deep roots. I believe the deep roots are achieved by listening and focusing on the needs of our retailers and consumers. They’re the two most important parts of our business. We can build a great business, but only if we build a great foundation.
Where do matters of sustainability fit into this foundation?
It’s a very important part. One of our major goals going forward is building on a greener approach to manufacturing. We want to do it across the board as much as possible. We’re taking a hands-on approach with our factories, and if that forces to look elsewhere, then we’re ready for that transition. Some of our Baja product features 100-percent sustainable merino wool uppers as well as sustainable canvas. We’re also trying to track our supply chain back to its origin. You can’t really be sustainable until you do that. We are spending a lot of time on that now and transitioning our factories into the same mentality—fixing the small things to make a bigger impact because sustainability matters for the rest of our lives. I’ve been part of the outdoor industry for a long time and I’m an outdoor advocate. I want to leave this place better than when I was here. It’s just my ethical duty as somebody who runs a company to be as green as possible with what we do.
What do you love most about your job?
I love the family atmosphere at Lamo. There are 16 of us right now, and we all live and breathe this brand. I also love the freedom that has allowed me to take my experience and build it within this family atmosphere. My employees are everything to me. I believe I’ve kicked started a lot of footwear careers within our company and feel we can all go a long way. •