Sometimes it seems like the stars align and the market comes to one’s portfolio. Case in point with Genesco Branded Group and, in particular, its Johnston & Murphy and just re-launched Trask subsidiaries. Both possess rich American histories, the former dating back to 1850 and renowned for making dress shoes for every president since Millard Fillmore. The latter, formerly H.S. Trask, for ushering in a Montana-inspired rugged casual aesthetic 20 years ago and the tip of the dress down movement. The rich American heritages of both brands are in step with an ongoing macro Americana fashion movement that shows little signs of losing steam in this country or abroad. Toss in the millennials-driven dress footwear revival and Johnston & Murphy’s recent extension into women’s on top of the country emerging from a deep recession where consumers are seeking authentic brands and versatile styling, and it’s easy to understand why Jon Caplan believes Johnston & Murphy and Trask are primed for solid growth in the years ahead. “We have legitimate enthusiasm based on what we see,” the CEO says, modestly.
Just what one sees in the men’s dress market is a 180-degree flip from only a few seasons ago when many had written the category off for dead amid a deep recession and, for those still lucky enough to still have a job, casual Friday attire had become a week-long dress code. But worldwide recessions have a way of changing things—like the need to make a professional impression as a way to get a job as well as help keep one. There’s also the (long overdue) fact that the casual dress pendulum swung too far into the flip-flops zone and the inevitable swing back may have started. One cannot overlook the enormous demographic factors at play here as well. Millions of millennials are entering the workforce and, like many generations that preceded it, they are looking to make their own fashion statements. To wit, Caplan says many millennials are keen to take style cues from their grandparents. “Respondents in our focus groups loved seeing the footwear wardrobe of their grandfathers,” he says, noting the brand has recently dipped into its archives and reintroduced select styles from the ’40s and ’50s. “They say the styles from that era are ‘cool’ and ‘authentic.’”
Caplan adds that the dress revival is coming with a twist: “We are seeing a whole new generation getting into dress footwear but they are not necessarily wearing the rest of the uniform. They are pairing the shoes with denim, with brightly colored socks and sometimes without socks, or brightly colored laces.” Johnston & Murphy has also expanded its color story beyond the standard black and brown hues. “We’re featuring more colors in traditional dress shoe silhouettes than we have in decades,” he confirms. “It’s a huge emerging opportunity and it’s been great to invite a whole new generation of consumers into our brand.”
Few, if any, saw this revival coming. But, as Caplan notes, that’s a fun aspect of this industry: things change. “You have to expect the unexpected,” the industry veteran says. “None of us here possessed a crystal ball, but there are opportunities that arise where, in this particular case, it hits the sweet spot of what we do.” Caplan understands that what will separate the winners from the losers is the ability to execute against the opportunity. “We have heritage, expertise and the ability to try new things on our side,” he offers. “It’s been working out well for us so far.” Dress sales, in fact, are up. “This is really the first time we can say that in the last year or two, which is after a long spell of decline,” he adds.
Caplan believes the dress revival is not a flash in the pan, starting with the fact that the trend hasn’t been an overnight sensation. “It’s been gradual and it seems to be increasing now at an accelerating rate,” he says. “Generally, fashion trends that accelerate on a more moderate level have more legs than those that accelerate quickly. The ones that go up the fastest typically come down the fastest, and this one doesn’t feel that way.”
Caplan has a good feeling as well about the rebirth of Trask. He describes it as another tremendous opportunity to update an “American original.” In fact, one of Caplan’s brand management tenets is to always look forward. “It means you have to be willing to take some risks and be willing to reinvent yourself,” he says. “And you must do it without losing your core principles, which in our case are great quality, craftsmanship and value.” For Trask, Caplan says, it’s using Genesco’s resources to elevate the product to the next level. A key aspect is the brand’s trademark use of Bison leather, which has been upgraded by the Horween Leather Company’s Chromoexcel tanning process that takes 89 steps and involves 28 working days to complete. Caplan says the wait is more than worth it: “It’s really supple and soft and it has a great patina,” he explains. “It’s one of those materials that gets better with time.”
Trask will debut this fall at select retailers and, Caplan reports, so far so good. The name recognition has remained strong and the improved and expanded product line (including women’s for the first time) received a solid response from retailers. “It’s amazing how so many people have terrific memories of what that brand stood for,” Caplan says, noting Trask plays into the Americana trend in a more outdoor and leisure-time oriented way. “By what it was and what we are bringing, Trask is very distinctive,” he says, adding, “You don’t get very many chances to work on a brand like this in your career.”
To that end, Caplan feels blessed to be working with brands rich in authenticity and backed by Genesco’s resources to keep them fresh and thriving. Having begun his footwear career in 1982 at Genesco and spending the ensuing decade managing a successful boot division, (he left for 10 years holding management positions at Stride Rite Corporation and Hi-Tec), he’s glad to have settled back at his corporate home. “Like a lot of people who have worked here, it’s like gum on the bottom of your shoe and it’s hard to leave,” he says. “There’s tremendous amount of stability and integrity, and there are no politics. We are set up almost as a holding company and those of us who operate the businesses get to make operating decisions.” Caplan adds, “As you advance in your career, those are aspects that you appreciate more and more.”
What is it about Johnston & Murphy that makes the brand so iconic?
Regardless of what people are wearing, there are certain attributes that this brand possesses that never really go out of style: offering great quality, materials and workmanship. All of that gives the consumer really good value for their money. I think brands that reach iconic status have an obsession with quality. They transcend time with a classic feel. Even though you can reinvent what classic is, you can’t buy those traits. Johnston & Murphy has a trust that’s been built up over many years. I get so many letters that inevitably start with the line: “I’ve been a Johnston & Murphy customer for X number of years.” It’s usually a double-digit number, which reflects a remarkable amount of long-term relationships with its customers.
When I came back to Genesco the brand had lost its way a bit. The dress shoe market was in a decline and we needed to broaden our appeal both in end uses and in consumers. The word reinvention is probably too strong, but certainly a refresh and ability to look at how elastic the brand could be was in order. Fortunately, Johnston & Murphy had such strong equity. I believe the core consumer never really lost any confidence in the brand. It was just that what people wore to work had changed. I often say any brand that is successful today is probably not doing the same things that made it successful many years ago. If you are going to stay relevant then you are going to go through a lot of changes, which is what we set out to do with Johnston & Murphy. For the last 10 years or so we’ve transformed it to multiple end uses. We now have strong casual and dress casual businesses. Casual is 25 to 30 percent of our business and dress casual (rubber bottoms) is 35 to 40 percent and the remainder is dress. We’ve also recently launched women’s. And we are starting to see some really exciting things going on in the dress market.
Men’s dress was left for dead but it seems to be alive and growing again.
The turn around the last two years has been really fun to witness. When you look at the demographics of this country there’s a huge emerging opportunity with millennials. Often they are buying dress shoes for the first or second time, so they are discovering the brand as if it’s their own. They’re buying into the quality and authenticity of Johnston & Murphy. And that’s coupled with what I believe are a lot of people who are viewing Americana as a long-term aesthetic. Bu we are having some fun with it as well. It doesn’t have to be staid and conservative. It can be colorful and almost whimsical. For example, we are featuring some mixed materials—a wing tip upper in colorful suede and laces and a different color EVA bottom. We are reinventing a classic silhouette in a very modern and fun way.
How big might this millennials market be for dress?
That’s difficult to answer. But it seems to have a lot of legs because people are wearing dress shoes not only for fashion statement purposes, but also a lot of people entering the workforce are wearing them because it remains a very tight market. You have people wanting to feel more confident and are dressing more appropriately. And, like a lot of large trends, you are seeing it span several age groups. That’s always what we look for when a trend looks to be really significant.
I can’t overlook the simple fact that too many people took casual office attire to a sloppy extreme. Call it the flip-flops backlash.
No doubt. And certainly the recession served as a wakeup call to eschew those overly casual fashion statements in the workplace.
How has this renewed interest in dress footwear and, in particular, the tailored trend played into Johnston & Murphy’s entrance into women’s?
Actually, we decided to extend into women’s prior to the men’s tailored trend coming on strong. In fact, we had the whole launch strategy in place and when the first product line came to market it was right when the recession hit. The first couple of seasons would have been a challenge, but they were especially difficult given the overall economic environment. But looking back on it, it’s been a learning curve that I wouldn’t trade for anything. I’m glad we didn’t wait until the economy became healthier. We kept it very small in a select number of our stores because we wanted to get the product right, find our voice and get some consumer acceptance before we went out with it to our broader distribution. Spring truly marked the soft launch of Johnston & Murphy women’s line and our fall delivery will be more significant.
And…
We’ve gotten a great response from consumers. It’s really exceeded our expectations and we believe women’s presents a great opportunity for us going forward. And I will note that we shied away from the men’s tailored trend at first, even though we saw it coming. We didn’t want people to think, “Oh, they only know how to make men’s shoes and are doing them now in small sizes and calling it women’s…” But the trend kept getting stronger and, unlike a lot of brands that try and take advantage of a trend regardless of whether it looks like anything that they’ve ever done before, we have the authenticity, archives and expertise. But we also took it to another level. We didn’t want to just do what people might have expected from us in terms of men’s tailored looks. We were already experimenting with color on the men’s side and women’s gave us the latitude to do so much more in terms of color and materials. We can make it very whimsical. That’s really played well into our wheelhouse.
Why will women accept Johnston & Murphy beyond being in step with the current men’s tailored trend?
First of all, women own a lot more brands than men. If you go into any women’s closet you will find a multitude of brands. Men, for the most part, have a much smaller consideration set and are more likely to go back to the same brand and, if able, to the same style repeatedly. You will rarely find a woman buy the same style two seasons in a row, unless it’s a new color or material update. So we didn’t have that barrier at the start. Then there’s our brand equity. For years women often have asked why we didn’t make shoes like that for them? We’ve heard over and over that they loved the beautiful craftsmanship.
How do you see the line evolving beyond men’s tailored looks?
It already has. At shows this month retailers will see a broad-based collection that features plenty of great colors and materials, lots of flats and lots of comfortable engineering built into the entire product range. It’s very versatile and fits within that dress casual to casual range. It’s product that women wear every day, be it in an office, at night or on weekends.
Who, exactly, is the Johnston & Murphy woman?
We have great materials and product engineering, so you are not going to see a lot of opening price points. You are going to see bridge product mostly in the $150 to $250 retail range. So you are talking about women who don’t mind some investment spending but also are not the type to spend $500 to $600 on designer labels. There’s a practical nature to our target consumer but an appreciation of quality and fine materials. We are not trendy, but we are trend-right. And, along the lines of the Americana trend, you’ll see a lot of moccasin constructions that look great, are versatile and extremely comfortable. That’s a great trait about Johnston & Murphy, whether it’s men’s or women’s, the product is extremely wearable. That’s always a good place to start.
With women accounting for approximately 70 percent of all footwear sales, what do you envision as the gender’s potential share within Johnston & Murphy?
We definitely see a significant opportunity. As long as we can continue to offer great options then there’s really no limit to the size of the opportunity. It could be a 50-50 split at some point. There are certainly case studies within the industry where that’s happened.
What attracted you to the Trask opportunity?
Trask is one of those great brand stories. It was launched by Harrison Trask, who is a larger than life character who had a really great brand vision that captured the imagination of a lot of consumers and people in the trade. What we’ve done is taken those great qualities and vision and, with our resources, elevated the product to the next level. In addition to the premium Bison leather story, we have introduced ram, lamb and elk skins—really wonderful, soft supple leathers—throughout the collection. And we are including latex-based outsoles that have incredible shock-absorbing and soft characteristics. We also introduced a women’s collection. We think it deserves to be a dual gender brand. In fact, I think if Harrison had the resources available to him back in his day he would have done exactly the things we are doing.
How has the reaction been by retailers?
It’s been tremendous. People who knew the brand were amazed at how we were able to take it to another level. And those who didn’t know the brand fell in love with it because the product is just so unique and wonderful. It falls into that accessible luxury category—a price range that spans $188 to $295 with some boots priced higher. Personally, if you are going to make product in that range it really has to feel expensive, and this does. This is investment footwear that people will keep for years. We use the term heirloom footwear, because it just will get better with time. When compared to other similarly priced items, I believe there’s no combination of materials, comfort and timeless style similar to Trask.
This goes well beyond the outdoor specialty tier, right?
It does. And the difference with a lot of outdoor product is that it is more functionally positioned. This goes beyond function and really gets to what we describe as an emotional connection to the product. It’s a product that you just love to wear. But it’s not for everybody and it’s not going to be available at all retailers.
Any guesstimates of Trask’s long-term potential, taking into account that you are basically starting from scratch?
It’s really hard to put a dollar sign on it, but if you look at other successful brands in this space they are very significant. I think Trask really hits a sweet spot in the market. For materials like these you would expect to pay $400 and up. By making it in the $200 to $300 range it is accessible to a lot of people. It’s footwear that they will wear regularly and will last a long time.
Can Trask be a 50-50 gender split down the road?
The best answer I have to that question is to look at Frye. I’m sure someone somewhere asked them the same question a ways back. I got to believe that they are way beyond 50 percent women’s now. As you get more into casual styles, it crosses genders more. Merrell is another example. And there are tons of others.
What’s your current take on the market overall?
It’s been challenging and I think it will continue to be. But the great thing about our industry is that there are always ways, if you are innovative, to resonate with consumers. When you have strong trends in the marketplace, consumers will respond. But they won’t buy just to buy. Along those lines, I think consumers of late are looking to footwear to not just be an accessory to an outfit but to start there. Men are also adding to their footwear wardrobe and having more fun with it, in general. I read an article recently that referred to men as the new women when it comes to shopping—they are buying things not just for utilitarian purposes but for fun. Colored socks, for example, have become popular. It’s not a huge amount of investment spending and it can be versatile. You are also seeing more guys wearing skinny ties and bow ties. It’s a much different statement because guys are wearing it because they want to whereas guys my age used to wear ties because they had to.
What’s your assessment of the independent retail tier?
It’s certainly challenging and not getting any easier. But the ones who have survived are generally great business people. They have loyal customers, they want to carry brands that they can make money on and they really know product. I think that the lessons learned from today’s independents shows they are curators for a customer segment. There’s lots of information available in lot of different ways, but there’s almost too much information. The good independents are able to develop loyal customers by being great curators of interesting products that helps interpret fashion for their customer base and they offer a great shopping experience. They also know how to fit properly.
In face of Internet-driven showrooming and price pressures, can they really survive by doing business the way you just described?
The Internet is an integrated part of everybody’s life now but it doesn’t take the place of the experience and ability to shop at a place where the merchandise has already been sorted out for you. That’s why these retailers are looking for unique products that their customers are going to enjoy discovering. If you love going out to eat, you can use the Internet to find restaurants, read reviews and look at a menu. But there’s no substitute for the experience of eating at a great restaurant. The same goes for shopping for special types of footwear.
What do you love most about your job?
I can’t give you a short answer because there’s so much that I love. I’m very fortunate in that I work with talented, hard-working people in a corporation that has really smart leadership and a philosophy of fostering an entrepreneurial spirit and giving us all the resources necessary to pursue growth opportunities. It’s really the best of both worlds. I also love that the market is always changing and there’s always a fresh way to approach it. It never gets old. And then there’s the opportunity to work with three great brands (Genesco owns the Dockers license) that have market-leading positions, great retail partnerships and terrific consumer appeal.
