Alegria made its the debut in 2008—smack dab in the middle of the Financial Crisis. That markets meltdown ushered in the Great Recession, the most severe economic downturn since the Great Depression. It was tough enough for established brands to stay afloat, let alone a clogs startup run by a small, family-owned company, Pepper Gate Footwear, based just outside of Los Angeles.
Yet, over the ensuing 17 years, Alegria not only survived but thrived. Despite those early stiff headwinds, it hit the ground running with its colorful and whimsical pattern uppers paired with a patented ergonomical and removable footbed made of soft PU, cork, and memory foam that, thanks to a unique interlocking system, firmly secures to a slip-resistant, mild rocker outsole suitable on many surfaces. The health care industry adopted Alegria quickly. The prints served as a way to add a little spice to their scrubs. Plus, the shoes were comfortable for people on their feet for hours at a time. Teachers and other professionals quickly joined the party. Alegria had that all-important signature item—the seed to what can grow into a complete brand.
Indeed, Alegria’s sales have steadily grown over the years while the line has expanded into other silhouettes—all with a proprietary comfort footbeds as the foundation. And while there have been many additional challenges faced since its debut, the brand has found ways to adapt and evolve. The trade war is just the latest hurdle, albeit it’s a doozy. Eighty-five percent of Alegria’s line is currently sourced out of China. While a 30 percent tariff is a far cry from 145 percent, it’s difficult to absorb fully, especially when the cost for just about everything else business-related has increased too. CEO Luke Chen and his team have been cramming for weeks looking for sourcing alternatives and savings. To date, they have not announced any price increases to its retail partners. The situation remains highly volatile.
“It’s all very challenging, especially for a company our size,” Chen says. “Because it’s difficult to just hop up and move to another country to produce shoes. For starters, our factory partners in China make high-quality shoes. A lot of our retailers would speak to that quality, which we won’t compromise on. It’s hard to find a factory of similar standards in other locations.”
That trust factor works both ways, Chen adds. If tariffs are lowered to a manageable percentage or cancelled, what’s to stop companies from going back to their China-based factories? He says those factories aren’t wrong to fear how that could negatively impact their businesses. That makes finding new sourcing partners even more challenging.
Nonetheless, Chen has been focused on doing just that, which began somewhat during the pandemic and is now in hyper drive. “We have to move that much faster to find the right partners and suppliers outside of China,” he says. The company has already worked with factories in other parts of Asia, and now Mexico, Brazil, and Europe are in play. It helps that after 35 years in business, the company has made lots of contacts around the world. Specifically, Chen’s father and company founder, Johnny Chen, has blazed that trail. “We have friends in other countries, and we’re calling them to see what we can do together,” Chen says. “Our goal is to move at least half of our production elsewhere by next year.”
That may not sound like a lot, but it is to Alegria. “We don’t have a lot of resources like a major brand that can go into a new country and present a $5 million order,” he says. “So we have to pick and choose the right suppliers, and that’s going to take some time, because I don’t want to disappoint our retailers by delivering sub-par product.”
Of course, time is of the essence. For one thing, a pause is just that. Who knows what might happen. And it’s not like Alegria is the only company seeking new factory partners. Think musical chairs, the Hunger Games version. “If this trade war gets worse, we’re going to see a lot of businesses in trouble,” Chen says. “And consumers will likely have to pay more for shoes, which obviously isn’t good for business. It’s all very challenging.”
Chen believes this industry turmoil is worse than the pandemic. First, the playing field hasn’t been fair. For several weeks, companies sourcing in China had faced 145 percent tariffs while other countries were at 10 percent. That rate was paralyzing. Second, there’s been a shock to the supply chain that will take months to smoothen out. Footwear companies are competing with all sorts of industries for that coveted container space, and smaller companies will likely be at the back of the line. Third, there is no government bailout coming.
“At least during the pandemic everyone was dealing with the same things, and we all had to work together to get out of it,” Chen says. “This is every company for itself. It’s beyond anything that we’ve ever dealt with.”
It helps that Chen is far from alone in this fight. Alegria is a family business in every sense of the word. Chen’s wife, sister, and brother in-law are part of the team. And his father is still involved with product development. “Dad’s always been a product guy; he’s always messing around with shoes,” Chen says. “He’s very passionate about that.”
What’s more, the core team has been together since well before the Alegria days, which has helped build strong relationships with suppliers and retailers. In addition, the customer service and warehouse managers and outside sales team have been with the company since 2008. Chen takes a lot of pride in that consistency. “This is a people business and to be surrounded by some of the best in the industry allows us to build great relationships with our customers,” he says, noting that’s equally important to making great products. “It means retailers can trust that we’ll hold ourselves accountable on being a good partner.”
Chen believes aligning with the right people inside and outside the company has been the key to its longevity. “Without that, this business can get tricky. It can muddy the goals you want to achieve,” he says. “Fortunately, my dad created a corporate culture of treating people the way he would want to be treated with respect, integrity and honesty, and we continue to take that to heart.”
Trade war aside, Chen is optimistic about Alegria’s future success. The company got through the pandemic relatively unscathed and was projecting solid growth for this year thanks to expanded assortments spanning athleisure to dress comfort. “We’ve recently invested a lot of resources in product development and launched several new categories that we projected to grow this year,” he reports. “The collections were well received by our retailers.”
The overriding goal remains the same: Alegria reaching its full potential. “We want retailers and consumers to see Alegria as a complete women’s comfort brand where our proprietary footbeds offer the right support and great comfort across a range of styles,” he says. “I fully envision that growth happening over the next few years.”
So, what’s life like in the trenches of an epic trade war?
Extremely hard. If you just did the math when the rate was 145 percent, the tariffs cost almost twice as much as our products. And the rate really was close to 185 percent when you added all the tariffs together. That was shocking and definitely challenging. And while the rate was greatly reduced, it’s still high. We were going to announce a price increase to our retailers, but we’re holding off for now. There’s just so much uncertainty.
What are you doing in the meantime?
Like most companies, we knew higher tariffs to some degree were coming and we had plans to absorb the increases and find sourcing partners outside of China. But then pretty much every country was hit with higher tariffs, which is making that search more difficult. And, of course, we’re not the only ones looking. Nonetheless, we have continued with our production. While we held some shipments when the tariff was at 145 percent, we remain optimistic that this trade war will eventually all be hashed out and we’ll get that all delivered.
How much of your Fall/Winter ’25 line is already in the U.S?
A good majority is here, but there’s still a big portion being produced and waiting to get here.
Can you even think about Spring/Summer ’26 amid all this turmoil?
Actually, we just finished our Spring/Summer ’26 sales meetings. Development is underway. We have pivoted some development to outside of China. We’re making a lot of progress on that front. We don’t want this trade war to be a setback for our company where we can’t move forward. We’re not going to stop development and production completely just because of this hurdle. We make a wide variety of categories, and some countries are stronger at certain types of development. So we’re looking at a lot of countries to see which make the best sense. I think we’ll find opportunities as we look up and down our line.
Diversification has many advantages, but what are some challenges in sourcing from various countries?
Logistics, for starters. There’s no one factory outside of China that we have relationships with that can make the majority of our shoes. So we have to find the right partners to develop certain kinds of shoes. Also, we’re a comfort brand and matters like fit and quality are very important to us. We have our work cut out for us to make sure all these potential sourcing partners and suppliers have the same standards and expectations. It makes it that much more challenging for our development and design team to make sure that, regardless of where the shoes are made, we have the same consistency of product throughout our line.
Do you envision making shoes in the U.S. any time soon?
If the leaders in our industry have the initiative to put in the necessary investment, I’d love to be a part of that. I think it would make shoemaking that much easier. Partnering locally could be more efficient, starting from a travel perspective. But a company our size can’t lead that drive.
Most industry leaders, though, have said manufacturing shoes here at the volume required to meet the demand just isn’t feasible.
It surely wouldn’t happen overnight. This would take tremendous investments and time, and even then, there are no guarantees it could work or be sustainable. Now add in the recent fluctuation of tariffs worldwide and it gives all companies hesitancy about opening a factory in any country right now. Why would anyone spend billions of dollars building up that infrastructure when any advantage could be easily taken away because of a raise on tariffs? It’s just very difficult to manage a business amid these disruptive conditions.
How was business overall leading up to this?
Post-Covid, we broadened our categories as our customers want and expect us to be more than just a clog brand, or a nursing brand. While there’s nothing wrong with being either of those—that’s our foundation—we want to be a complete women’s comfort brand. That’s what our rebrand has been all about—adding new categories. It better aligns Alegria with a changing retail environment.
How was business this past year?
We were flat to a little bit of growth. Like every year, weather can play a big role but for the most part we were happy with where our business stood. More importantly, we’re excited by the growth we projected going into this fall. Our orders were up double digits. We introduced more dress comfort styles that were well received. We appreciate the trust and support our retailers gave us in the new shoes. If we can get this trade war settled to something more manageable, we’re really excited about the growth prospects for rest of the year and hopefully that carries into spring of ’26.
How would you describe Alegria today?
Alegria is a women’s comfort brand making multiple categories of styles—from athletic to athleisure to sandals to boots and clogs. We cover the entire spectrum of the comfort category. We’re well on our way to showing customers that we’re more than just what we started as in 2008. We’ve put in a lot of time and effort to reach this point. Product expansion is crucial for us, and we’ve worked hard to achieve that.
It’s not always easy to expand out from what retailers know and want a brand for.
For sure, we’ve been pigeonholed at times. But that’s where our rebranding has come in and our ability to tell our story that Alegria means comfort in all the shoes we make. Building a brand is a non-stop job, and expanding into different sectors of the business requires being rediscovered all over again. That’s why we need to tell our brand story consistently through product and messaging. We also hope our retailers help us tell that story to consumers as well.
What’s Alegria’s biggest growth opportunity going forward—a specific category or consumer segment?
It’s comfort across a range of categories from sneakers to dress comfort. That will enable us to expand into different markets and distribution. It’s why being consistent is so important. Above all, we have to focus on what makes Alegria different, and we believe that story leads with our unique footbed constructions that provide great support and comfort. You won’t find that level of support and comfort in most sneakers and athleisure styles. That’s how we differentiate.
You’ve been in this business a long time. Is the glass half empty, half full, or is there a hole in the bottom right now?
I’m pretty optimistic and positive by nature, so I’d like to think the glass is half full and that we’ll see bright days ahead. That said, it’s definitely dark of late. It’s hard to be optimistic in the face of these tariffs. This isn’t a case of what theoretically might happen. This is real dollars, and it just doesn’t add up. Even at 30 percent, this is just super difficult. I’m not sure if consumers understand yet just how big of a burden this is on companies. It’s not just shoes that will cost a lot more. Everything—apparel, cars, phones, etc.—will all cost a lot more. My wife is stocking up my daughter’s school supplies now realizing how much prices might go up and how scarce goods might be come August.
The impetus behind this trade war was to bring jobs back to the U.S. Well, your company currently employs about 30 American citizens and if this trade war goes unchecked, it could jeopardize those jobs.
It’s very sobering to hear leaders in our industry having the same challenges that we are. And even if the tariffs are taken away, we’ve already heard from our shipping forwarders that it’s going to be a mess. There’s a huge bottle neck to get goods onto ships. It’s wild.
Is it the most wild that you’ve experienced over your career?
This is definitely the biggest challenge that we’ve faced. Making it worse is that it all just came so fast and way beyond expected. Some in our finance team are more pessimistic. If this trade war continues into the fall, it’s going to have a dramatic impact on the entire industry. In the meantime, we’ll do our best to absorb the costs where we can but at the end of the day, we have responsibilities and bills to pay. I’m not going to lie, it’s tough right now.
So what keeps you coming into work each day?
Making products that make a meaningful difference in people’s lives. I opened our recent Spring/Summer ’26 sales meeting by reading a note from one of our consumers who had gone through multiple surgeries to her knees and hips and was told by doctors that she might not be able to walk without any pain. She discovered our shoes in 2009 and has been able to walk without any pain since. Each year she has bought a new pair. Our shoes can make a difference in a person’s life. The fact that she actually took the time to Google my name, find our address, and send a hand-written card…that’s all the motivation I need to keep coming into work each day. That feedback is inspiring and makes it all worthwhile.
What do you love most about your job?
Working with my team. We all have the same values and goals, which has enabled us to accomplish what we have to date and can do a lot more of going forward. I’m just blessed to have a loyal team of terrific people. We’re all in this Alegria basket together, trucking along and trying to grow. I believe it’s harder and less sustainable running a company if you view everything as just a transaction. We place value in our people and with those we do business with. For example, our secretary has been with us for 24 years. We celebrated her 20th anniversary by giving her and her husband first class tickets and a vacation to Cabo San Lucas for a week. We treat our people right. And while having a family business has its challenges, ultimately we answer to ourselves and not investors who may want to just treat things transactionally. We treat our retailers the same way. Problems can arise, but it’s how you react to those problems and treat people. We take a lot of pride in that. It’s important that we to do the right thing. •
