The Rain King

Riding the utilitarian rain boots fashion wave, Rob Moehring, CEO of Washington Shoe Company, makers of Chooka and Western Chief, reports that sales nearly doubled in 2010. He forecasts the deluge to continue this year.

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Doing what you love, following your passion, providing solutions for people’s lives and hopefully, making a living doing so.

Doing what you love, following your passion, providing solutions for people’s lives and hopefully, making a living doing so.

To say Rob Moehring is happy when it rains would be an understatement of epic proportions. You could say each raindrop acts as a tiny impetus for shoppers to purchase a pair of his Chooka or Western Chief rubber rain boots. As the raindrops accumulate into puddles, it only ups the ante. And the fact that rain occurs year-round in all 50 states, it’s easy to see how overcast skies and drizzle would put an ear-to-ear smile on the face of one of the leading rain boot makers.

But it hasn’t just been the utilitarian factor fueling Moehring’s rain boot bonanza for nearly the past decade. (After all, rain boots, or wellies, have been around for more than a century.) It’s more due to the technological advancements introduced about eight years ago, enabling rubber to take on prints and colors. Ever since, Moehring’s design team has been turning boot shafts into canvasses for wild, whimsical and colorful creations. These once-drab staples have been reborn into bold fashion statements. It’s fair to say millions of consumers are also now happy when it rains: It’s a chance for them to make a splash—pun definitely intended—with their footwear. What was once lamented as a “bad hair day” has turned into a fashion opportunity—frizzy locks be damned.

“Before, wellies were basic boots people just wore to march around the farm in,” Moehring offers. “Now, they’ve become an important part of a women’s wardrobe.”

Nevertheless, even Moehring was surprised when 2010 sales nearly doubled from 2009, which was up more than 50 percent from the previous year—especially considering the dark clouds of the recession that have hung over the entire footwear market these past two years. “Nobody really saw this year’s growth coming,” he admits. “We planned for a 30- to 40-percent increase, and we were just blown over.” Moehring cites the mid-tier’s embrace of rain boots for fueling the explosive growth. “There are just a ton of people shopping in that tier, and that’s generated a lot of business,” he says, adding that the Kent, WA-based company now operates two public warehouses, while its main warehouse is running three shifts a day. “We’ve had to expand rapidly, and we’ve been fortunate to ramp up the extra warehousing ability.”

In addition to the masses embracing rain boots, Moehring notes that its Western Chief brand continues to grow exponentially—thanks to a couple of kid-specific market perks. First, kids are constantly growing, so there’s more of a need to replenish. Then there’s the “cute” factor that allows Western Chief boots (and their matching rain coats and umbrellas) to double as dress-up options and Halloween costumes. Never mind the simple fact that cute is cute—which, Moehring says, plays strongly in both mid and upper tiers. He notes that Western Chief is an affordable impulse buy in its upscale dealers. “They can sell our brand for less than most of the other merchandise they carry, yet it’s still unique and offers that necessary cachet,” he says.

As for how long the rain boots sales deluge might last, Moehring predicts at least a couple of more seasons before proverbial market consolidation sets in, leaving fewer players answering the demand for the long term. It’s not unlike the sheepskin boot craze, he notes. “When that trend was hot, everybody was in the sheepskin business,” he says. “As the category matured, suppliers consolidated to four or five key players. I see the same thing happening in rubber footwear.” Moehring believes the consolidation phase has just begun, although he doesn’t expect it to impact the company’s sales growth. “We believe 2010 was the first big year in the mid-tier market, and that will continue expanding,” he predicts. “There’s still a lot of room for growth there.” In addition, Moehring says the upper-tier market is evolving into more sophisticated styles that help sustain sales volume. “It’s all about studs, straps and buckles in that tier, as well as different material treatments that are more subtle,” he notes.

Going forward, Moehring anticipates a customer for both bold and subtle rain boot styles. The utilitarian factor isn’t going away, and the trickle-down effect from high to lower tiers organically rejuvenates the market. Plus, plenty of women just want to have some fashionable fun. As such, Moehring remains bullish on rain boots for this year and beyond. “This style of footwear is now embraced by the masses,” he says, noting that even former Republican vice presidential candidate Sarah Palin sported a pair of Chookas during an episode of her reality TV series. While Moehring says Palin is a polarizing political figure, the fact that she was wearing Chooka’s “Tattoo City” boots while fishing was an honest and unpaid (believe it or not) product endorsement. “She has a strong fashion following, and wore our boots in a utilitarian manner. So we’ll take it,” he says.

While keeping pace with the rain boot craze, Moehring is also focused on the rest of the Washington Shoe Company portfolio. It includes Staheekum sheepskin slippers—which, Moehring reports, register a steady increase in sales each year, and Eddie Moran men’s work boots. In addition, Wild Duces, a women’s leather boot fashion brand, has joined the mix this year. If that’s not enough, Moehring also plans to expand Chooka into leather styles starting in 2012. “We’ll lightly step into the water for spring, and then make a bigger splash by fall,” he says, adding that it has been a frequent request from retailers. “We have a strong consumer following and brand recognition, and many retailers want to preserve Chooka’s space on their shelves year-round.”

First off: Is it raining outside your office right now?
Yes. And I’m very happy!

Understood. Still, this run has surpassed even your wildest expectations, right?
Yes, but it confirms what a powerful combination utility and fashion can be. It’s a similar story to the popularity behind Merrell’s Jungle Moc, Ugg’s sheepskin boot and, possibly, Crocs. The rain boot has found its place in the consumer’s closet because it looks great and fulfills a need.

Now that nearly everyone offers a rain boot, how are you keeping your brands distinct?
We believe the consumer seeks out quality and great design. We use high-density rubber, and our upper designs are always fresh and new. Of late, we’ve been translating some classic styles and design elements found in leather boots. One example is the classic riding boot silhouette—only ours are made of rubber, which offers more utility.

I believe the women who first loved our fun, bright and funky designs have discovered the true utility of rubber rain boots. Ours are neither heavy nor clunky, and since we’ve made them less farm like and more fashionable, they’re comfortable wearing them often. For example, city women are on their feet a lot, and appreciate the utilitarian aspect of rubber footwear.

Without the fashion element, this category probably would have never come around again.
That’s true: When consumers see something new, it makes them want to buy it more—be it different treatments, materials and/or silhouettes. Otherwise, wellies are a commodity. Chooka never really sold based on solid colors; it’s always been about interesting details. This season, it was straps, buckles and studs, plus the introduction of sophisticated design elements. For example, we did well with lace details and fabric uppers like Irish woolens and plaids. Even our dot patterns have become more subtle. Whereas in our more price-sensitive Western Chief women’s line, big dots and bold colors still sell well. And of course, when it comes to Western Chief kids, it’s all about the ‘cute’ factor and the power of our Thomas the Tank Engine, Hello Kitty and Batman licenses. Fun, whimsical product is more in demand than ever before. Moms don’t want to buy boring boots, and kids increasingly drive purchasing decisions.

What’s the status of the rest of the Washingto Shoe Company portfolio?
We introduced our Eddie Moran work boot line last year on the downside of the work cycle, so it has experienced slow growth to date. Nevertheless, we’re satisfied with the response, and expect stronger sales as the look cycles back in. It’s a good sign that J.Crew is now carrying Red Wing, as is Nordstrom.

In the meantime, we launched a women’s derivative of Eddie Moran called Wild Duces this year. It’s a fashion boot line based on manmade materials (retail prices range from $40 to $70) that started out with some motorcycle looks. It’s been a star to date—we’re selling at lots of Western, farm and mid-tier general stores. These kinds of outlets are located all over the country and have a loyal customer base who basically will buy it where they see it: They may be carrying a huge bag of dog food, but if they see these boots, they’ll buy them as well. It’s been a pleasant surprise. What started out as a men’s work line has evolved into a strong women’s fashion boot business. How crazy is that? But that’s what this industry is all about: Women always want new shoes!

How is Staheekum performing?
Quietly yet steadily, with 15-percent increases year after year. Actually, it’s kind of boring, but I love boring. Today’s lifestyle is all about comfort, and this brand lies on the fringe of that craze. Tons of young people are wearing slippers as part of this “sleep to street” trend: They hop out of bed, shower (or not), tie their hair into a ponytail, slip into sweats and slippers and are good to go.

Despite one of the most difficult retail climates in decades, your company is thriving. What’s your secret?
First let me say, last year was still very challenging, but we’ve found that people gravitate even more to perceived value as well as the opportunity to add some fun into their lives. A lot of bleakness remains with respect to the overall mood, but there are increasingly a number of people that are revolting against that. One way is to simply express themselves in fun rain boots. Another way is by trying to be comfortable—both physically as well as emotionally. Many people don’t want to try and be a fashion plate; they just want something that works and is comfortable. Our brand portfolio is nicely aligned with those trends.

What has been the biggest change you have seen among your retail partners since the financial collapse?
Retailers remain cautious and sensitive to cash flow and inventory. They need to be lean and mean, because there’s no place for extra expense today and the tolerance for error no longer exists. Consumers just don’t buy closeouts the way they used to. You can’t get out of unwanted inventory at 10 or 15 percent off with a “rack in the back.” Retailers really have to be spot-on with the right product for their customers.

How was the mood at the FFANY show in New York?
Retailers are keenly aware of what works for them, and they are staying loyal to those brands. As a result, more communication is taking place between supplier and retailer than ever before. It’s got to work at the cash register or it doesn’t work for anybody. We spend a lot of time discussing emerging trends and current sales, and we’re watching that on a daily basis to sense an end or beginning of a sales cycle. That communication is critical because, at the end of the day, the consumer drives the bus. And they can turn on a dime.

Is it more difficult to succeed today?
Yes and no. It used to be more stable: Book your usual orders with the usual brands, and see you next season. Those days are gone, but that’s actually better for a company like ours. This type of landscape rewards brands that are engaged in the market and watch and react to the latest trends.

How have consumers really changed as a result of this mess?
Well, Black Friday was huge for Internet retailers—and not just Cyber Monday. It shows that consumers are aggressive; they want the best possible mix at the best price, and we’ll continue to see that. On the other hand, brick-and-mortar retailers that take care of their customers are being rewarded with loyalty. People like to go where they are being taken care of. Men, in particular, will rely on such retailers as their fashion consultant if their wives or girlfriends aren’t in the picture.

Are there any retailers you particularly admire?
Nordstrom, because they really listen. They know what their customer wants. And if they run into trouble, they fix it: They’re the best at turning things around if something is not going well. I also respect major online dealers with how they respond to customer demands.

What’s your outlook for this year in general for the industry?
Many are worried about 2011, and the Chinese suppliers are acting a bit paranoid. A lot of factories have raised prices on orders that were already booked, and commodity prices have been going up almost daily. Deliveries will arrive later, so we are responding by planning further ahead.

So price increases are on the way?
Yes. The problem, however, is while the consumer is starting to shop again, they have grown accustomed to relatively low prices. Yet rubber costs are up 30 to 40 percent; then throw in the depreciation of the U.S. dollar, plus the possibility of a huge duty increase on rubber in March, and it’s a perfect storm for our business. Will the consumer buy into these price increases? Unfortunately, I think we’re in the beginning of an inflationary cycle and they are going to have to pay up if they want new shoes. The fact is price increases are hitting all shoes coming out of China. And while no one wants to accept higher prices—including suppliers, retailers and definitely consumers—it’s inevitable. Nevertheless, a retailer was telling me recently that if they raise their prices, the consumer will likely look elsewhere. Whether they find it for less or not, they’ll still blame the original retailer for raising the price.

Sounds like a vicious cycle.
It can seem that way at times. But the fact remains that consumers always embrace new and exciting product. That’s what we continue to work like crazy to achieve, and we’ve got a number of exciting projects in the works that we expect will be well-received. And I actually believe recessions are good for an emerging brand because buyers can’t rely on the old formula. That’s what I love about the junior business—you get an audience with those buyers because that market is always changing. They can’t afford to miss out on the next big thing so they are usually much more receptive. Overall, most people I speak with remain cautiously optimistic; they believe this year will be better.

Where do you see yourself in three years?
Doing what I enjoy: creating fresh footwear designs and delivering on them. People often ask, ‘Why don’t you retire?’ What else am I going to do? I love coming into work each day to create new and exciting designs. I also love the fact that everywhere I go, I’m basically involved in the shoe business—whether it’s watching kids playing on a field or seeing what people walking around a mall are wearing. I’m lucky, because I’m able to do what I love and wouldn’t want to do anything else. —Greg Dutter

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