First: You gotta believe. Second: You must have the plans and team in place to attain your goals. Third: The timing must be right. Ayelet Lax Levy, president of U.S. operations for Naot, has gotten two out of three right since she took the reins from her father, Steve Lax, in December 2019. Timing has been the stumbling block for Naot. When the pandemic hit, it put the entire industry in survival mode. That meant Lax Levy’s grand plans—designed to triple U.S. sales within three years—had to wait.
“I had a lot of great intentions and expectations going into 2020—like rolling out a new branding campaign and introducing shop-in-shops to increase brand awareness that would drive consumers into our retail partners,” Lax Levy says. “There were a lot of technological and marketing aspects that were also put on hold because, basically, the world was put on hold.”
The wait is finally over. Lax Levy is once again going full throttle on the job she has yearned to do since taking the helm. The expectations remain equally great. “Starting this year through 2025, we’re going to really push all those plans we had fully into place, which includes rolling out our new branding campaign this month (complete with new logos, tagline, and influencer marketing programs) and having our new ERP system become operational on June 1.”
Lax Levy’s game plan is both consumer-facing and backroom. It represents a changing of the guard but doesn’t completely abandon how business was (successfully) done under the previous regime. It’s a compromise between what works and what Lax Levy believes can be improved. Such seamless generational handovers are rare, but this one is working well so far for Naot’s U.S. division.
Take the company’s new website, for example. It was a more involved process than usual because Lax Levy had to find a way to adhere to her father’s parting directive that Naot would never compete with its retail partners by selling DTC. But Lax Levy knew a simple informational website wasn’t enough in this day and age. Naot reached a middle ground by cherry-picking nine of its longtime retailers (the 10th is its Soho flagship, which opened last fall) to service orders made through the site.
“It’s a marketplace. Whoever can fulfill the order gets the sale,” Lax Levy explains, adding that the site has been performing extremely well. “Because of the volume one of our retailers has been doing through our site, they were able to hire back two employees in their warehouse. Sales on our site overall have quadrupled.”
Lax Levy has also updated the company’s marketing strategy, introducing influencers into Naot’s recent campaigns. Her dad, who still doesn’t have an Instagram account, was thumbs-down on using them, but she saw big potential to reach new audiences—and to do so cost effectively. “When we opened our Soho flagship, we backed it with an influencer campaign that drove traffic into the store right away,” Lax Levy reports. “One influencer in particular promoted our new knee-high boots, and within days we had people come in requesting that style. So, the right influencers and social media agencies can produce meaningful results.”
Then there’s the ambassador program, which debuted last year. Naot chose 10 influencers from around the country as brand ambassadors. But Lax Levy felt that the old norm of featuring young, flawless models was limiting and unrealistic, so the company scrapped its previous beauty-driven campaigns in favor of a more inclusive approach, which now extends to all of its brand marketing. “We chose a range of ethnicities, body types, and ages,” she says. “I want my daughter to believe whatever she looks like is great. I also believe changing from a very model-esque advertising approach to featuring authentic women is a way to connect with a much broader audience of potential customers.”
Other aspects of her father’s approach to managing Naot haven’t changed a bit, starting with how the company treats its retail partners. Naot does whatever it takes to meet their needs. This ranges from not selling DTC to being as flexible as possible with inventory management, a top concern among retailers as supply chain disruption continues to wreak havoc on deliveries. Naot’s approach is a refreshing contrast to that of competitors who offer no flexibility on terms regardless of how late a shipment is. “We’ve never said, ‘We’re late, but it’s your problem,’” Lax Levy says, noting instances where orders expected for July arrived in January. “Vendors still expect them to accept it without any concessions, whereas our team always calls to let our customers know if a shipment might arrive a little late and to see whether they still want it or if there’s anything else we could provide instead.”
Flexibility and willingness to compromise in an increasingly rigid industry landscape are serving Naot well. Lax Levy is forging a path by blending new and old school managerial techniques to reach her goal of tripling sales in the next three years. She says the division is already off to a roaring start in 2023—and that’s before the new branding campaign debuts in May. Indeed, the best is yet to come.
“Our plans are just starting to come to fruition,” Lax Levy says. “It’s been a three-year journey, but we’re all really excited about the future.”
How’s business?
We’re having good problems. Business is significantly up, and we’ve asked our factories to almost double capacity, but that’s really hard to do. So, the main goal for the rest of this year is to try and get enough shoes shipped to meet demand. It’s as simple as that, and I try to never disappoint our retailers. That’s why we’ve been flying in three shipments per week, because I’d rather make a little less on a shoe and get it to our stores on time. But we’ll get there on increasing production. In the meantime, our shoes are selling, so we can’t really complain. This first quarter, for example, is the best sandals season we’ve had in a long time. There are about six styles that we can’t keep in stock. So, again, it’s good problems.
What do you attribute this success to most?
Multiple reasons. One: I think we just have some very good designs. Two: Naot has always been known as a good travel brand, and I think the huge rise in travel post-pandemic is helping fuel a massive increase in our business. I mean, our family tried to book a trip recently, and we couldn’t get in anywhere. So, a lot of people are traveling, and they want comfortable shoes. Three: In general, consumers are moving beyond their pandemic practices, but they don’t want to give up on the comfort that many of them discovered during that time. And Naot offers great comfort and style which, of late, involves a desire for slightly dressier looks. That’s probably why our heels, like our Innovate sandal, have been blowing out. Women are going out to dinner and attending events again. Even those who were more cautious are now out and about. They want to wear a cute, little heel. What’s also interesting is that a lot of consumers saved over the pandemic. So even though there’s inflation, they’re willing to make that investment in their wardrobes. That said, we’ve held pricing throughout most of the pandemic. It hasn’t gone up nearly as much as our competition, and that’s also helped our sales. Four: The hybrid work trend fits with many of our styles, which crossover well from casual to office settings.
Are you able to meet the growing demand within your existing factories?
We’re actually in the process of expanding our factory base, but not in the Far East. We’re aiming to do something closer to our Israeli base. We plan to announce that in June. In the meantime, we’ve been ramping up production in or existing region as best we can, including having opened three facilities in the area recently. But there’s only so much production that we can do there. We’ve maxed it out. Again, it’s a good problem to have.
When do you expect to have increased production capacity in place?
I’m hoping by August. But there are lots of variables in play. Looking at the best case, worst case and middle of the road scenarios, I’d say we’re in pretty good shape. We’ve tried multiple ways to increase production already, although not all of them have worked. For example, we tried a new supplier for buckles, but then they went about of business. Fortunately, we have plenty of plans in play. If only 20 percent of them come to fruition, then I think we’ll be able to increase production capacity at some point this year.
How much have the supply chain issues impacted Naot?
We’ve been affected in multiple ways, and still are. The industry’s supply chain issues overall haven’t been solved at all. For example, a lot of our stitchers, which we contract out to small factories in the West Bank, closed during the pandemic. So, we had to find alternatives. Same goes for our buckle supplier that we partnered with in Spain. Then he shut his doors, and we’ve had to find someone else. There’s a lot of that going on throughout the industry. Like, one of the biggest tanneries in Italy closed last year, and while it wasn’t our main supplier, a lot of those who did use them have switched to our suppliers, and that affects our business. Basically, there are less suppliers overall, and everyone is competing for the remaining ones throughout the supply chain. As a result, those suppliers are charging more, and that affects our business as well.
Sounds like a never-ending nightmare.
It is. The good thing is we own our own factories. We weren’t impacted by the shutdowns in China. In fact, we never shut our factory doors once throughout the pandemic. Even if we couldn’t product shoe X, we found ways to produce shoe Y because we had enough of those materials on hand. We found ways to keep our business going, and that certainly has helped us. And while our shipping costs have gone through the roof, it’s not the same as Far East costs. As a result, we’ve definitely grabbed some shelf space because other brands couldn’t deliver.
Still, knowing what you know now, would you have preferred to skip the pandemic and taken over at the start of this year?
I might have waited a year or two. (Laughs) But I’m so happy, for starters, that we were able to keep my dad home throughout that time. I didn’t want to jeopardize his heath by having him think he needed to come into the office and help. We achieved that—and we never shut down. Our distribution center stayed open the whole time. So did our main office. We rotated three teams: two that were in the office while one worked from home. If anyone got Covid, we’d rotate the other team in. And those few employees with underlining conditions never had to come into the office. Our IT department did a great in getting them up and running at home.
Would you say this year marks your real start as president, whereas the previous three years was a crash course in survival?
I think so. The past three years have been a lot of “what’s going to happen next.” But I’ve always had the mindset of planning for best case, worst case and middle of the road scenarios. Be prepared for anything, basically. That’s how we got through it, and continue to do so. At least now, though, we can look forward more clearly and with more enthusiasm. We have a little more confidence in forecasting our business. Even though there are still supply chain issues, we’re used to them. Whereas, in 2021, I don’t think anyone was prepared for those issues and everybody was impacted greatly.
It’s been a managerial baptism by fire for you.
It sure wasn’t what I initially envisioned the job to be. On that note, I think one of the key reasons we were able to navigate through all this disruption so well was because we never lost contact with our retailers. Our reps stayed on the road the whole time. If we expected retailers to be in their stores, then we wanted our reps alongside them and our offices open. That was very important, because retailers were on the front lines of all this and were forced to adapt to all kinds of changes. They were facing people with masks, no masks, dealing with customer quotas, outdoor fittings, curbside pickups, etc., etc. So, we just tried to do the best that we could to be there alongside them to help them through it. Because, at the end of the day, if they weren’t going to still be standing on the other side of this pandemic, then there would be no industry left, basically.
How might have that experience changed how you manage Naot now?
I’m not rushing things as much. For example, our ERP system was supposed to go live in March and now it will be June. Our rebrand was also supposed to launch in March and now it will be in May. I tend to give myself short deadlines, but I’ve learned that it’s better to get things done correctly rather than quickly.
To what extent is Naot’s rebranding effort going to be different than it’s been?
Pretty different. It will include a new logo, tagline, and marketing deck that will give us a more uniform look worldwide. It’s under the guidance of our CEO Moshe Marie, who came aboard in November 2021, from Nestlé Nespresso. He’s phenomenal. That brand became one of the best-selling coffee brands in Israel, which was not an easy market to break into. We also hired Inbal Oren, our first chief marketing officer, about eight months ago. We really are envisioning tripling the size of Naot mainly through increased brand awareness.
And you can achieve that within Naot’s current distribution?
I think the distribution we have now is great. We’re not looking to open up every store. I don’t think that would be good for the brand, or our retail partners. I think we can achieve that growth primarily because our current customers love our shoes. They often buy multiple pairs. One recently purchased her 130th pair. Our retailers say we have a cult-like following, and customers keep coming back for more. The other reason is Naot in Israel is like Coca-Cola in terms of brand recognition, and I think it has big potential in the U.S. Just by increasing our brand awareness in what is such a bigger market provides us an enormous growth opportunity.
Might this growth extend beyond Naot’s core customer base?
We’re not looking for 16 year olds, necessarily. I don’t think that’s our market. Then again, with TikTok, you never know what might catch on. That aside, I believe that there are many women in our core customer base who still don’t know our brand. The growth there could be tremendous. Whereas a lot of companies might have a good brand, but the product is lacking. I believe we have a phenomenal product, and we just have to build the brand around that.
Planning to triple Naot sales mainly within the existing distribution must be music to your retailers’ ears, no?
Well, our overall goal is to send more customers into their stores asking for Naot. It’s one of the reasons why we sell through retailers on our website, because we believe that’s another way to drive traffic into their stores. And while our online channel is growing, we strongly believe in brick-and-mortar. There are multiple reasons for that, including the fact that shopping online can be overwhelming. Sometimes there’s just too much choice and uncertainty, and it’s just easier to go into a store to make a purchase. Plus, those stores help communities thrive, and we believe that is very important. I think that, over the course of the pandemic, a lot of consumers also rediscovered the importance of supporting local stores. We’re seeing a resurgence in shopping in downtowns and strip centers. And let’s be honest, who’s going to sponsor the Little League team if there aren’t any local businesses left in town? It’s not going to be some online conglomerate.
Along those altruistic lines, where do matters of sustainability lie in importance for Naot?
One of the cool aspects about Naot is sustainability, as well as diversity, have always been very important aspects of our company. It wasn’t like, all of a sudden, these are cool talking points and we need to figure out how to make them fit into our mold. Those concerns have been built into the company from day one. For example, our factory is located on a kibbutz and the staff includes Druze, Christians, Muslims, and Jews hailing from around the world. We have men and women of all different ethnicities and religions working side by side in our factories, and have for years. It’s part of our ethos. Certainly, there’s more that we can do, and we’re always looking for ways to improve. As technology improves matters of sustainable design, we’re trying to change as well. So, maybe a glue that we’ve used is replaced by a more sustainable alternative. On that note, we’re certainly looking at expanding vegan line.
Why, exactly?
There’s a growing demand around the world for such goods, particularly in Israel. I think that trend will continue to expand greatly in the U.S. as well, especially among younger generations. They’re seeking more sustainable options across their purchases. Leather production leaves behind a huge carbon footprint. These consumers want an alternative. For example, we can’t keep our Okahu vegan slip-on moc in stock. It happens to be a great-looking shoe, but I think the vegan aspect is a huge plus and represents a direction the market is heading. We’re also looking at socially responsible ways of producing shoes, even though we pay working wage rates in Israel. We’re also continuing to help refugees around the world. Unlike a lot of brands, we donate unsold merchandise to homeless and battered women shelters, rather than sell them for pennies on the dollar. We donate tens of thousands of pairs annually. We also just donated about 3,000 pairs to earthquake survivors in Turkey, as well as to survivors of last summer’s Florida hurricane. In the U.S., we always donate through a local retailer, because we believe they know that community better and know which agencies are best to get our shoes to people in need. For instance, in Naples, FL, we worked with Peltz Shoes. Our PR got multiple TV stations to cover the donation, which was made in their parking lot. They received great recognition among the local community.
What keeps you up at night, besides your kids?
The state of the world. I wish I was handing my children a better world than the one we have right now. I wish that we were not as divided as we are. I wish that we were heading toward a better world. While social media can do a lot of cool things with communication and learning, the bad side is how divided it seems to make us all. That’s what keeps me up at night: How do we fix this world for our children?
What do you love most about your job?
I’m super-passionate about my job—to the point my kids think I’m always working. But I love what I do. Ironically, my dad always pushed me to do something different, and I did work in advertising for a while. But I always made excuses to tag along with him to shoe shows in Milan and Vegas. I just loved being around this industry. I really love shoes. I love looking at new products and working with designers. I love watching how what you’ve been working on with the team in the sketch stages comes to fruition. I love how it all comes together. And let me just say, I think we have a phenomenal team—the best in the industry. I enjoy working with great people. We have a super-warm culture where everyone genuinely cares about each other. Our Israeli team is also a phenomenal group of people who are working to make our company great but also the world a better place. Whether it’s donations to good causes, helping protect the environment, or working with refugees, Naot is a vehicle to do good. I love that. •
