Psst. Want in on a little secret? Boot Barn is a big business—and it’s poised to get a whole lot bigger. The chain is expected to triple in size over the next 10 years. We’re talking a projected 900 stores in nearly 50 states.
But a lot of people—particularly the investment intelligentsia, which largely resides along America’s urban coastlines—don’t have a clue about Boot Barn. Even when informed of the chain’s solid growth, now going on 11 straight years, they remain skeptical. Chalk it up to a coastal bias blind spot, one that prevents them not just from recognizing what a behemoth Boot Barn is fast becoming but also leads them to pooh-pooh the enormous economic significance and social influence of so-called “flyover” country.
Not even the fact that Boot Barn just reported having the best year in its 44-year history—one that saw the now 300-store chain total $1.5 billion in sales (fiscal 2022) and every store turn a profit—is enough to make investors take notice. What’s more, comp store sales grew 54 percent and earnings tripled. The Irvine, CA-based company is looking to open roughly 40 to 50 stores a year over the next 10 years, which sets the stage for billions more in annual sales. That expansion includes further market penetration in states where Boot Barn already does well and virgin territory in towns and cities across the country that also live and breathe its merchandise mix. The chain’s destination store format has been updated and is running like a well-oiled machine.
Yet, in the days that followed last month’s impressive earnings call, Boot Barn’s stock price actually fell. The general consensus was that a horrendous quarterly report from Target and a slew of other poor retail earnings reports dragged Boot Barn down with them. The retailer was guilty by association. Yet the fact remains that the chain’s numbers were record-smashing. What’s more, comp store sales are up 12 percent this year. Neither the pandemic nor rising inflation have taken the wind out of Boot Barn’s sails/sales.
So, forgive Jim Conroy, president and CEO of Boot Barn, for having a bit of a chip on his shoulder. The organization deserves a lot more respect than it gets for what it has achieved and expects to achieve, especially in an age when popular opinion says it can’t be done. Equally irksome to Conroy is the corollary assumption that consumers don’t want to shop in stores—and that they don’t regularly wear western fashion. Wrong on both counts.
Conroy knows this because he sees it firsthand. He recently visited a Boot Barn location in Weatherford, TX, about 60 miles west of Dallas and found the store (which opened in May of 2021) buzzing with customers shopping the extensive array of functional merchandise as well as “a whole bunch of what can now be viewed as pretty mainstream” apparel. “It’s doing three times its original budget,” Conroy reports. “Now, I can’t put my finger on all the aspects that are working in that store, and whether they’re attributable to internal or outside macro factors, but my sarcastic side says, ‘Yes, it’s a trend, and evidently one that’s been going on for 11 years, because we’ve had 11 years of positive comps.’ But nobody will listen.”
Nevertheless, Boot Barn will keep doing what it does best—and keep growing, Conroy assures. The chain is on pace to hit between $2 billion and $3 billion this fiscal year. Perhaps eventually it will win over the doubters and deniers. In the meantime, Boot Barn just doubled its total addressable market to $40 billion. Conroy, for one, sees enormous potential. “We’re miles away from maxing out the growth of our business,” he says, describing Boot Barn as a momentum play. That includes core customers replenishing their wardrobes for work and fashion as well as a growing adjacent customer base that wears the product casually. “We’re just scratching the surface of that (latter) market potential,” Conroy says. “That’s a giant market and expected to be a big part of our growth going forward.”
Capturing the adjacent customer has already been quantified. Over the past two years, Boot Barn’s customer count is up 35 percent and sales are up almost 70 percent. “Basically, half of our growth is new customers,” Conroy says. “I couldn’t be happier with that ratio, as we’ve been able to get our legacy customer to shop more frequently while, at the same time, convinced new customers to shop with us without having upset the apple cart.”
Still, some investors remain skeptical that the fashion customer base actually exists and even more doubtful that Boot Barn can capture it. Others fret over the risks associated with a greater focus on fashion, but Conroy believes they’re wrong. He cites the chain’s successful expansion into new markets as proof. “We’ve been opening stores in states that people didn’t think were ‘western,’ like Pennsylvania, Ohio and Virginia,” he says, noting that Boot Barn now has outlets in 38 states. “And we’ll be opening a store in Cherry Hill, NJ, and outside of Albany, NY, this year.”
Indeed, Boot Barn’s concept seems to have nationwide appeal. What’s more, the chain’s best-performing doors are located not in rural areas but in cities, like Houston, Dallas, Nashville, Phoenix and Charlotte, NC. “It’s not like every store is in a small, farm town,” Conroy says. “And if we’re successful in North Carolina, why can’t we go north to Pennsylvania? There are a ton of consumers who wear our products living between Philadelphia and Pittsburgh.”
New York is another example. While Conroy says Boot Barn may never open an outlet on Manhattan’s Upper West Side, there’s a huge potential customer base stretching from New York City to Syracuse to Buffalo. “That’s a gigantic triangle of customers who wear our products,” he says, adding that the merchandise mix has expanded to appeal to a broader audience. “It’s not just cowboy boots, Wrangler jeans and hats. There’s product virtually for everybody in our stores. You don’t have to own a horse to shop there.”
Conroy says Boot Barn’s ability to appeal to a broader customer base is quantifiable. “Typically, we want our new stores opening in states near New York to do $2 million as an average first year store, and they’re doing like $4 million,” he reports. Perhaps even more reassuring is the fact that Boot Barn’s growth is not being driven entirely by fashion sales. In fact, if the chain excludes women’s fashion sales, the business overall is still performing exceptionally well. Sales, compared to two years ago, are up 71 percent. “Even if we take zero credit for all the women’s product that has some fashion tailwind to it, we’re still up 63 percent,” Conroy says.
Boot Barn stores strike a delicate balance between function and fashion, blue and white collar, core and casual customer, and men and women. The key is to appeal to a diverse audience without alienating anyone—to look upscale enough for a customer spending $500 on alligator skin boots while not turning off a guy buying work boots for $179.
Conroy says his team has been laser focused on getting that balance just right. It includes segmented categories within the stores that are separate yet inclusive. So, for example, there’s the alligator skin boot that could be worn with a suit at a charity gala and, two shelves below that, the work boot for the guy who swings a hammer for a living and wears them six days a week. “We want to expand our ocean of customers, but we can’t lose sight of our core customer,” Conroy says. The use of targeted marketing helps ensure that “A guy working on an oil rig won’t receive a promo about the latest fringe purse by Miranda Lambert.” Conroy adds, “Based on the success of our recent store openings, I believe we’ve found that balance.”
Byron Wortham, president, Core Brands Sales for Rocky Brands (Durango, Georgia, Rocky and Muck) says Boot Barn’s ability to appeal to both function and fashion customers under one roof is a key to its success. In addition to a consistent floor plan and aesthetics, he cites the merchandise team’s understanding of the fashion shift brought on by the pandemic. “With the proliferation of work-from-home, people wear what they want all day long, and boots are part of their lifestyle. CEOs are also wearing boots and jeans in the boardroom,” he says. “Boot Barn understands this and has created a more upscale and lifestyle-oriented environment in its stores. They are not a traditional western store. This has allowed them to capture not only core western consumers, but also new consumers who may have previously made their purchases at an upscale department store.”
Prasad Reddy, CEO of Twisted X, says Boot Barn is doing a lot of things right. That includes product presentation (appealing), customer service (tremendous), stores (clean) and merchandise mix (really good). “It’s a combination of all those aspects that has led to Boot Barn’s exceptional growth,” he says. Another factor, Reddy says, is Boot Barn’s expansion into new markets. “They’re expanding where western footwear hasn’t traditionally been, but consumers are hungry for this product based on the wave of western fashion trends we see,” he says, adding that this is helping Twisted X broaden its reach. “Boot Barn is the only western retailer that’s nationwide, and that exposes our brands (includes Black Star and Wrangler) in states where we’re not as prominent, which gives us the opportunity to reach and retain new consumers.”
Let’s Get Physical
Another factor contributing to Boot Barn’s success is its firm, albeit old school, belief that its customers prefer to shop in its stores. While many in the investment community believe the world has moved on to a DTC/digital landscape, Conroy begs to differ. “The numbers within our company, and the industry overall, show that most of retail is still conducted in traditional stores,” he says, adding, “I just don’t understand how so many people have convinced themselves of something that is so blatantly untrue.”
This is one instance, however, where Conroy doesn’t mind the prevailing misconception; it works to Boot Barn’s advantage. “I love the fact that everybody thinks the world is going online, because we’re going to continue to open stores,” he says. “We’re attracting customers from more mainstream channels partly because those retailers drank the Kool-Aid that everyone is shopping online.” That belief, he says, has led to a vicious cycle of neglect. “As those stores underperform, they pull out inventory and reduce staffs, and then they underperform more, and then they pull out more inventory and more labor…if you do that enough times, you’ll destroy your concept,” Conroy says.
Boot Barn, by contrast, remains focused on its profitable brick-and-mortar channel. “Most of our customers interact with us in our stores, we make more money in that channel, we have a more loyal customer there, we’re more competitive, we have higher exclusive brand penetration,” Conroy says. “And while we want to grow our digital business—and it’s growing quite nicely—we spend half of our time with our digital team figuring out ways to get more customers into our stores.”
Over the past several years, Boot Barn’s split between in-store and online sales has remained steady at 85 percent to 15 percent. It’s a ratio Conroy is happy to maintain. Opening stores is also a relatively affordable growth strategy. “The parameters for us to build a profitable store are pretty modest,” Conroy says. “So, more stores per capita in markets that have already experienced the Boot Barn brand, plus more stores in states people wouldn’t necessarily think can support a store—and we wind up with a lot of opportunity.”
The fact that those new stores won’t be in malls is another part of Boot Barn’s strategy. It’s no secret that mall traffic is depressed, and there are few signs of a rebound ahead. Ron Owens, brand manager for Dingo, a division of Dan Post Boot Company, believes Boot Barn’s destination format bodes well for attracting new customers. “There’s a percentage of consumers who aren’t returning to malls because they’re concerned about crowds and crime,” he says. “In a lot of cases, it’s a younger, more fashion-minded consumer. So, it’s an opportunity for Boot Barn to pick up a new customer.”
Conroy believes he’s holding a royal flush when it comes to Boot Barn’s odds for continued success based on macro trends spanning film, music, fashion and consumer demographics combined with winning management philosophies. Speaking of philosophies, Conroy’s guiding approach to management stems from a life lesson his father taught him: “keep it simple, stupid” (a.k.a. the KISS approach). While opening stores isn’t exactly simple, Boot Barn has its formula down pat. “People always want us to call out some glamorous, technical strategy, but really our No. 1 strategy is to keep building more stores,” he says. “It cuts back to ‘keep it simple.’”
He expects those stores to be busy for years to come. Conroy believes western movies and country music are gaining popularity for the same reasons Boot Barn is. “There’s no causality here,” he says. “The customer base is huge and vibrant, and both we and Yellowstone are tapping into it.”
Those who dismiss flyover country are failing to recognize the “largest consumer market that’s been hidden in plain view for 100 years,” Conroy points out. It’s the guy who buys $179 work boots, wears through them like running shoes and, in eight months or so, comes back to buy another pair. It’s the gal who loves line dancing and buys new pairs of boots every few months. In short, it’s America.
So what if investors don’t see or believe it? That’s fine with Conroy. Boot Barn sees a world of opportunity. “Our business may not be some DTC, digital-native disruptor, but we’re thrilled with our strategy,” he says. “We’ll just continue to execute against it and keep growing—even if some people still think we’re a fad.”
The Right Stuff
Boot Barn CEO Jim Conroy: the right person, with the right approach, for the right company at the right time.
Jim Conroy knew Boot Barn had huge growth potential before he joined as CEO almost 10 years ago. But this born-and-raised Long Islander isn’t a cowboy boot whisperer, nor does he come from a long line of Shoe Dogs. The Ivy League grad did, however, take some advice his wife offered after a recruiter contacted him about the Boot Barn opportunity.
“My wife convinced me that this market is a lot bigger than I’d thought,” he says. “Having grown up in New York, I had no clue.”
Conroy’s wife, on the other hand, grew up in the Midwest and, after college, was a photographer at various newspapers around the country, including in Springfield, IL, and Baton Rouge, LA. “She told me, ‘Most of the country wears this product either all the time or often enough. It’s not just people in Texas and Wyoming who buy cowboy boots and jeans.’”
Conroy was completely sold after his interview with Boot Barn’s board of directors. “I had an immediate connection,” he says. “The board was very competent, but also very humble. They wanted to grow a business, and they were looking a bit outside the box.”
That made Conroy a perfect fit. For the previous five years, he’d served as COO and interim CEO for Claire’s Stores. Prior stops included Blockbuster Entertainment Group, Kurt Salomon Associates and Deloitte Consulting. In short, he was not a western guy—or a typical merchandise-turned-management exec. “Oftentimes in retail, the hire is a product merchant type, but they wanted somebody who could grow a business, run a team and lead a company,” Conroy says.
Boot Barn, when Conroy arrived in November of 2012, was a privately held, 86-store chain doing about $180 million in revenue in eight states west of the Rocky Mountains. The board’s initial plan was to grow to a point where a slightly bigger private equity firm or company would acquire it. Within months, however, Conroy lived up to his outside-the-box billing and pitched going public. Despite initial hesitancy about whether investors would understand the concept and whether the chain could become big enough, he convinced them. Boot Barn went public in October 2014, and it’s been nothing but growth since.
Part of that success has stemmed from putting the right people in place and letting them do their jobs. “I love developing people and giving them growth opportunities,” Conroy says. “Promoting people is my favorite thing in the world.”
Take CMO Laurie Grijalva, promoted to her current position in 2014. “Laurie is an incredible merchant,” says Ron Owens, brand manager for Dingo and 50-year market veteran. He praises Boot Barn’s merchandise mix for serving both core and fashion customers without alienating either. “The fact that core customers aren’t buying in lieu of authentic cowboy boots but in addition to is proof,” Owens says. “That customer needs an authentic cowboy boot, but she also wants something in pink or blue that’s fun and fashionable. Boot Barn’s merchandise team understands that better than anybody.”
Prasad Reddy, CEO of Twisted X, also has high praise for Boot Barn’s leadership team. They’re all on the same page and share that vision with key vendors, he says, and that’s crucial. “Because they share strategic information, we can support them in product and marketing,” Reddy says, adding that the team is always open to new ideas. “They’re willing to test new concepts instead of just saying, ‘This doesn’t belong here.’ When it works, it’s great for everyone and, if it doesn’t, it’s still a good learning experience.”
Conroy says he’s “lucky, blessed, happy and fortunate” that his management team has stuck together. He credits the loyalty, in great part, to Boot Barn’s corporate culture, which mirrors his personal motto: “assume positive intent.” Translation: Boot Barn doesn’t bicker or backstab. “We don’t have political infighting,” Conroy says. “We don’t, for example, fire off angry emails. Let’s just assume that person wasn’t being antagonistic in that email, rather they were just asking you a question and maybe you interpreted it wrong. We don’t have any of that negativity.”
Conroy prefers to focus on Boot Barn’s many positives. Case in point: an employee who was recently promoted from district manager to regional director. “That’s a huge deal; she’s going from overseeing 10 stores to 90,” he says. “There are a lot of these stories because we’re growing. It’s the greatest feeling.”
If Boot Barn continues on its growth trajectory, there will be lots more opportunities to promote employees for jobs well done. It’s one of the many reasons Conroy plans to stick around. “If I think about why I came here, why we went public and why I’m still excited, it’s all the same answer: the opportunity for growth is enormous.” —G.D.