Comments on: The Airwalk Syndrome…returning?

By: forsenorse

forsenorse — Thu, 03 Sep 2009 20:14:13 +0000

Good question. I have to look at a brand like Patagonia with what I perceive to have controlled distribution, but managed to remain “core” and still grow. In talking to a “core” retailer recently they mentioned that the best brand at managing distribution and thus providing protection against eroding margins for the retailer and the wholesaler…just happens to be one of the largest brands…Nike, with Nike 6.0. The core market may be dwindling (SIMA research showed 156 shops closed from 2006-2008….wait until 2009 wraps up!) but a lot of brands can still find growth in the core and the “accepted” (hey, at least these aren’t the mass discount chains) national retailers like Macy’s, Zumeiz, the Buckle. What good is revenue growth for a private company if profitability drops.

By: doubleb

doubleb — Thu, 03 Sep 2009 20:07:07 +0000

Great thoughts Jeff. I honestly don’t have the answer. I know with my agency, we’ve had the option to expand in a number of ways, but held off because I didn’t think it was sustainable.

The result was, for a period of time, we put in a lot of extra time… but eventually things got back to a normal growth level and we were ok. But we’re a small PR firm (with big results , not a global agency.

From a brand standpoint, it’s a lot harder, I’m sure. There are a few brands out there in skate I see following the slow/sustained growth model and starting sub brands at the same time to increase their presence. Of course, these guys are not near the revenue of some of the larger ones.

There’s also the downside of when a mass retailer cuts down their big buys from the action sports world.

Again, it’s a dicey path to head down and one not easily navigated. If I had all the answers, I’d start my own brand.

By: Jeff Trainor

Jeff Trainor — Thu, 03 Sep 2009 19:49:20 +0000

Well put, over distribution has always been a brand killer. The list of brands which have fallen victim to the temptation of easy money from national retailers is a long one. So the question is this, if your business is in a position where you are unsuccessfully scrambling to make up lost revenue from “core” channels which ultimately may land you in the grave yard, what harm is there in finding sanctuary in the pockets of a national retailer? In other words, you’re damned if you do and you’re damned if you don’t. It seems the only option which allows the business to survive and maintain its integrity is downsizing operations to fit the new demand. However this approach has its problems too. Aside from the obvious being layoffs and restructuring, voluntarily decreasing market share and therefore revenue may ultimately lead to the demise of the brand. Is going vertical the only way to maintain core integrity, maintain/grow market share, and stem off over distribution?

By: doubleb

doubleb — Thu, 03 Sep 2009 19:32:43 +0000

Interesting piece Erik.

I’ve been watching their re-emergence for a while and whenever I see them re-issue a style from the 90′s, I get nostalgic for when my body thought it was ok to fall down stairs over and over again.

It’ll be interesting to see what happens with Airwalk in terms of what consumers purchase the product. I have to believe that with the influencers, they’re still going to be looking at not just price, but the team backing the brand and the places they see it.

You know the saying core is poor, but you don’t necessarily have to sell in every door to be successful. Smart, sustainable and controlled growth won’t necessarily please Wall Street, but it could stem big layoffs down the road.