Steve Libonati, president of Ralph Libonati Footwear and distributors of El Naturalista, Blundstone and Vivobarefoot, on why the portfolio is positioned for significant growth in the coming seasons.
Not too many executives in this industry can trace the very beginning of their footwear careers all the way back to the tender age of 8. But Steve Libonati can. And while the career launch point involved a stipend of just 10 cents an hour to help out (sort of) at his father’s distribution warehouse in Springfield, NJ, it quickly became a ringside seat to the ensuing athletic footwear boom (the company was the first U.S. distributor of Adidas, an arrangement that covered the Northeast states starting in the late ’60s and lasted through the mid ’80s) and also served as the ideal training ground for running a successful footwear distribution company. Over the past four-plus decades the Ralph Libonati Company portfolio has spanned athletic brands, including Pony, Bally Golf and (still) Power to its current stable of lifestyle brands, El Naturalista, Blundstone and Vivobarefoot. Over the years, Libonati has seen trends and recessions come and go. Along the way he’s garnered the market-wide perspective to know where to place his bets on emerging categories and brands that possess the unique DNA to stand out in a sea of sameness.
Libonati’s current portfolio reflects just that: led by three brands possessing style distinction, product innovation and rich heritages. And while distinct from each other, Vivobarefoot, El Naturalista and Blundstone share similarities: “There’s a common thread running between the three in terms of customer base and comfort products,” Libonati offers. “It spans Euro fashion with El Naturalista to the Australian work heritage of Blundstone to the minimalist premise of Vivobarefoot.”
My family. Watching my 14-year-old son and 10-year-old daughter live life and all the enjoyment that it involves.
How about a famous person in the shoe business: my father (Ralph Libonati). The way he lived his life and what he believed in… I agree with all of it and try my best to live my life by those standards.
More than a specific piece of advice it was how he conducted business. He had integrity and morals. It was never about trying to get the better of someone in a deal. He was always trying to make it the best outcome for everybody involved.
Give me 18 holes at Pebble Beach.
Growing up in Westfield, NJ, playing baseball, basketball or football. It’s a great town. My sister bought a house two doors away from where we grew up. Yet I live in California, having moved as far away as I could. So go figure.
Owning a brand. It’s really the only thing that I haven’t done yet in this business. And since I’ve got a finite time on this planet it’s one more thing I’d like to give a shot.
To be sure the three brands are hitting on several hot-button consumer trends of late: comfort, versatile styling that spans work to weekend wear and the minimalist construction that addresses the health and wellness movement. And while there is plenty of competition in all of those segments, Libonati is confident his brands stand out as authentic and have the potential to be category leaders. El Naturalista is known for its vibrant colors, distinct outsole constructions and strong cause-related brand platform. The 120-year-old Blundstone is famous for its 500 Series boot, an iconic design that’s considered to be the first-ever Chelsea boot. And Vivobarefoot, created by Galahad Clark, a member of the Clarks footwear dynasty, is considered one of the first entries into the barefoot space. Libonati adds that the timing is ideal to introduce what are still relatively young brands in this market. In a recovering economy consumers are looking for something new, unique, authentic and comfortable, he offers. “I believe my brands are more unique than others. El Naturalista is crazy unique, Vivobarefoot has obviously got its own unique gig and Blundstone, while not as unique as those two, has that iconic hook.” Libonati adds, “I believe it will be a fun couple of years for all of them.”
Nevertheless, Libonati knows that in order for each to reach their full potential, they must be managed and sold separately. It’s not a one-stop shopping pitch. “It certainly helps that one brand may be a potential in with a retailer, but I don’t think it’s a lay-up and that’s not the overall intent,” he confirms.
The fact is Libonati believes each brand possesses more than enough potential to carve its own niche. Specific to Vivobarefoot, Libonati believes now that the initial hype of barefoot running has ebbed, the category will settle into its long-term market potential that spans sport to lifestyle. “The barefoot story is still coming on strong,” he claims. “There’s just a lot of validity to the concept, and I really like Vivobarefoot’s breadth of styling.” As for whispers that the category might suffer a shaping and toning demise, Libonati predicts it’ll be anything but. “I can reference volumes of evidence that says barefoot is no snake oil concept,” he says. “Show me similar levels of evidence regarding shaping and toning. You can’t.” Libonati is confident there’s nothing trumped up with respect to the attributes to a minimalist construction. “Barefoot is basically breaking it down to the essence of who we are as human beings. There’s no magical computer inside the bottom of these shoes that claim to make your feet do anything special. You don’t need air and gels.”
Libonati is equally high on the product purity of El Naturalista and Blundstone. He’s also excited by the recent partnership with Blundstone to manage its U.S. subsidiary (a similar arrangement is in the works with El Naturalista) that will involve considerable more resources to market the brand. “Wholly-owned subsidiaries run from outside the U.S. are not the easiest things in the world to do,” Libonati notes. “I have worked with enough brands over the years and understand there’s a perception of what people think the U.S. represents and what the reality is. That’s what I offer to the equation.”
Looking at the three brands as a whole, Libonati believes the timing just seems good for them to flourish. “Sometimes we can over-think things and mess it up,” he says. “These brands all have reasons for being. Whereas I have seen countless shoe brands over the years and have asked myself, ‘Well, what’s the point?’ That’s simply not the case with El Naturalista, Blundstone and Vivobarefoot.”
With the minimalist running craze having cooled, what’s your take on the category going forward?
My initial answer is it’s still going. One recent study I read noted minimalist running sales totaled more than $1.7 billion last year, and plenty of brands are still addressing barefoot (or zero drop) constructions. I also think people, in general, enjoy being barefoot. Part of my Vivobarefoot pitch is if you do—because it feels good and natural—you can’t really do that walking around concrete cities. So why not cover your foot with something really good looking that also offers protection but in a design that allows your foot to move naturally? It makes a ton of sense to me. It’s amazing when you put a naysayer in Vivobarefoot shoes. Both men and women say, ‘These are the most comfortable shoes I have ever worn.’
New concepts often get hyped and then there’s the inevitable backlash. What is it about Vivobarefoot that may make it avoid a similar fate?
Being one of the originals in the category is a good starting point. Vivobarefoot also addresses the concept from a lifestyle aspect as well. It’s not all about performance running. It’s part of an overall lifestyle, and I think on the fashion side is where a ton of excitement lies. While I believe the concept has legitimacy on the performance side, it has suffered from a lot of misunderstandings. You can’t just buy a pair of minimalist running shoes and go for a run. You need to educate yourself on how to run barefoot properly, starting with the proper heel strike. Fortunately, you don’t have to go through that learning process with a nice pair of our slip-ons or desert boots.
Who exactly is this consumer?
We span from the 18-year-old to the 58-year-old man and woman, and that’s mainly because people of all ages are looking to improve their overall physical and mental health.
Where do customers tend to shop for Vivobarefoot?
It’s a range of stores, which includes REI, Zappos, our e-commerce site and running specialty stores. It’s my job now to get them to shop the brand at all the other outlets that haven’t really been exposed to Vivobarefoot and its benefits just yet. I am confident they will understand what we are offering them. Helping in this regard is Galahad Clark, who is putting everything he has got into this brand.
Looking into your personal crystal ball, what do you see regarding Vivobarefoot’s full potential?
I see a boatload of potential. From the performance side, whether it’s running, hiking or amphibious, the sell-through rates are the real deal. And then you throw in the lifestyle aspect and I see unending potential. While there’s certainly that consumer that says, ‘I don’t know if I want to run in a pair,’ they certainly don’t mind wearing a pair casually. I’m one such convert. After I had met with Galahad to talk about a possible partnership I bought a pair of their golf shoes to test out. Right out of the box I walked 18 holes in them and that night, before going to bed, I told my wife that I didn’t know if I’d be able to walk tomorrow because I just played all day basically barefoot. But I woke up the next morning and didn’t feel a thing.
What’s the secret, in your opinion?
I just think barefoot is the way we were meant to be. I don’t care if you have been wearing heeled shoes for 40 years; your body has a memory of the way it was meant to be. Wearing this construction will bring you right back to that. I would also add women have been wearing ballet flats forever, which is about as minimal as you can get. Flip-flops are similar. And there are plenty of men’s dress shoes, where the only separation is a thin leather sole, that is basically the same concept. As long as we continue to offer more options, I think there’s room for much further growth. This is not a one-trick pony concept. Vivobarefoot can take you from an actual thong running sandal to a water shoe to a road running shoe all the way up to a hiking boot to a style that gets you out at night in New York City.
What’s new for Spring ’14?
We have a new thong sandal (Ulysses) that I’m stoked about as we continue to push lifestyle, which includes more women’s options. They include canvas and leather uppers in lace-ups and slip-ons with a more casual vibe. On the performance side, we are actually not moving so fast from one style to the next. You’ll see styles like the Stealth and Evo Pure that have been in the line but are now made with even better materials and features. We also are expanding our hand-sewn collection. And the icing on the cake is kids’. The barefoot concept plays perfectly with what many doctors have advised regarding footwear for young children. Basically, kids feet are little potatoes and when they are wearing shoes the foot shouldn’t be restricted. Vivobarefoot is ideal because it still protects the foot but doesn’t force it to do anything it was not designed to do.
Could Vivobarefoot be your biggest brand in terms of overall sales potential?
It could, although all of my brands have great potential. There are just not enough retailers in the states carrying the brand to get more people exposed to its benefits. Initially, the company focused on running and outdoor specialty stores and while that’s well and good, no one was really going after that lifestyle customer. Now I am.
What’s your assessment of El Naturalista?
We had a great initial growth spurt starting in 2005, as consumers loved the colors, the unique outsoles and the brand’s charitable initiatives. But then the dollar went nuts in comparison to the Euro and sales sort of hit a plateau. The good news is our pricing has gotten better where we bump around in the $130 range—for a while we were in the $150s—and that ownership is now especially focused on growing sales in the U.S., which makes sense. As my investment banker friends tell me, the safer best is investing in this country for the foreseeable future.
What is El Naturalista’s biggest challenge then?
It’s not pricing. Like with many other Euro comfort brands, at some point the brand needs to address the American consumer directly as opposed to just making shoes with a worldview and expecting them to sell in the United States as well. That’s going to be our M.O. going forward: paying attention more to the United States in terms of styling. For example, we started with a great clog but we never followed it up well. I’ve talked with the owners about the importance of clogs to the American consumer. People loved our original clog and we quickly garnered a big following, but they are asking what’s new? So that’s step one. I also think that there’s some other women’s styling, like sandals, that need to be a little more feminine whereas the European aesthetic is more the built-up version. Overall, I think just addressing more current trends in the U.S. will get us places.
Basically what you just described has pretty much been a critique of just about every Euro comfort brand that ever existed. Why is that?
Do you want to turn off the tape machine? (Laughs.) It’s an interesting point, but who really knows exactly why. Sometimes when a brand becomes successful quickly you might ignore some aspects and then, all of a sudden, it’s, ‘Hey, we’ve got to start addressing these things.’ I said that really nicely, didn’t I?
The criticism heard repeatedly is that Americans don’t know fashion and should accept the Euro comfort aesthetic. As history has proven time and again, you probably won’t succeed.
You’re absolutely right and it’s an age-old discussion I have had with many brands over the years. There’s always this misconception about America that if you just make this shoe you’ll sell a million pairs because there are 300 million-plus Americans, so that’s just one percent and you go from there. But it ain’t gonna happen. Come live in America for a while and talk to customers and you’ll see it just doesn’t work that way. You just can’t impose your will. Americans don’t care. We have our own ways, too.
Is El Naturalista addressing this issue for Spring ’14?
We’re already seeing it for holiday, clog-wise. And I’m seeing items for spring that are addressing those concerns. And I may add El Naturalista is still a totally unique brand. I just want to give customers more so they can latch further onto the brand. I’m not asking for an “American” brand. I’m asking for all the great qualities of El Naturalista with some more American styling. The owners agree in principle and that’s the direction we are heading in now.
Where do the brand’s charitable efforts stand? I ask because, thanks largely to the success of Toms, everyone seems like they are working that angle, which may water it down.
El Naturalista does that in a really honest way. Their efforts are well thought out and I don’t think it’s ever weighted too much in any one area. It’s a natural fit to what the brand is about. But it’s not the lead in or the lead out and it’s not taking over the brand. It fits perfectly within it.
Are cause-related marketing tie-ins becoming a consumer expectation at this point?
I’m not sure about that, but it matters. If it didn’t I don’t believe Toms would be where they are now. To give back is important, which might have become more important post recession. This past year El Naturalista let consumers vote on where it would contribute to its charities, which is good in terms of transparency. Rather than shoving it down consumer’s throats, we let them decide where they want the money to go.
Which brings us to Blundstone: What’s your take on its potential?
Like El Naturalista, Blundstone also sees what the American market offers in terms of potential right now and is investing more in its efforts to capitalize on it. Back when we signed on as the distributor in 2007 the company was mostly focused on sourcing issues and now that it has addressed them (production has largely moved from Tasmania to China) they are switching their emphasis to product.
What is the brand’s potential beyond its iconic 500 Series boot?
In Australia, Blundstone is a work and safety brand, whereas here it’s considered a casual lifestyle brand. It presents a much better opportunity to introduce a broader range of new styles. Over the last few years, for example, we introduced non-injected outsoles on the 500 Series as well as some stitched down looks that have sold well. My belief is there is a Blundstone customer out there that’s looking for more from the brand, and there are a lot of those people. We have already opened up a ton of doors and gotten the brand in places it needs to be but now we have to get people to see the new styles we will be offering.
Only a handful of shoes reach iconic status. What makes that boot so special?
Blundstone is just a rare bird in the market. How many brands have a story like theirs? How many brands are from Australia—Tasmania to be specific?
I can think of a three-letter one from Australia, but go on.
Yes, you’re right. But how many brands have this iconic rugged comfortable boot that lasts a really long time? There’s just something about it. It’s so authentic and it’s got a level of cache and coolness to it. That’s why as we go on this journey of product expansion we cannot be something we’re not. We have got to stay authentic to what the brand is about. Along those lines, we’re launching a canvas collection of boots for Spring ’14 that have the same upper pattern as the 500 Series but with more of an EVA bottom. I previewed it with key customers in Los Angeles and they think it is brilliant. Down the road, we could throw laces on it, possibly. And I can envision rugged sandals by Blundstone. The more opportunities I can give consumers to buy additional authentic styles the better. And as singular as Blundstone is style-wise right now, I believe it has as much potential as any of the brands we distribute. We haven’t even scratched the surface of the amount of consumers who should be buying this brand.
What’s your take on the market overall right now—good, bad, ugly?
It’s not ugly, but it was. I think it’s fine, but I won’t say it’s good.
It seems like department stores are hot on shoes, in particular.
True and everybody wants to be on the wall of that retailer based in Seattle. But I also believe there’s still a lot of non-department store business out there to be had. There’s still a ton of good independent retailers in this country that know their customers, know their stuff, are good people to do business and make it all fun. That’s another part of our M.O.: I tell my team all the time that potential exists. I’m not looking to overcomplicate matters. In fact, I tend to oversimplify things, but we all want to go to bed at night and sleep soundly because we are all enjoying what we are doing. That’s important to me.
You are one of the few industry executives that I have spoken with of late that is optimistic about the independent tier. There doesn’t seem to be much hope for their long-term survival in the face of online dealers and chains.
The good ones can survive. And I think there are enough good ones out there that know what they are doing and offer enough to customers that will enable then to do so. I’m not giving up on them. I take a little solace in that my office is located on the Santa Monica Third Street Promenade and when I look out my window I see Foot Locker, Hummus Bar Express, Apple and Crocs, to name a few, where plenty of people are shopping. Maybe I should put the phone down and ask them what the hell are they doing not shopping online? My point being that if the store is truly unique, is fun to shop in and is selling what people want and need, then I suspect they’ll do just fine. And having run an El Naturalista concept store for a few years, I understand how difficult that is to do successfully. It was fun while it lasted and it was a great learning experience. I get it now. When I walk into someone else’s shop I understand what they are going through from a day-to-day standpoint. And crossing through that front door can be like walking into that person’s life. Sometimes you can just feel what kind of day they are having by the air in that store. It could be a good or bad day. It’s a window to their soul.
That’s pretty deep. What do you love most about your job?
As I get older in life, I love that family thread that runs through my job. It keeps me connected to what my roots are and reminds me of how I grew up. All the wonderful stuff that I did with my dad—the meetings and dinners he often took me on. I was allowed to just sit there and absorb it all. It was just an amazing experience. It’s a happy place for me. And I do love shoes. I particularly enjoy the innovation involved, for example, with Vivobarefoot. I appreciate how important our feet are to us. How much we live our lives through our feet, and finding ways to keep them healthy and keep ourselves happy is another part of my job that I love.