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Skechers | New distributor | South AfricaLeft: Stanley Kotkin (left) and Laurence Slotsky, directors of Footwear Trading, which was one of Skechers’ first two international distributors. Right: New Skechers distributors: Ahmed Habib, Brand Folio’s South African Country Manager and Steven Swaby, Skechers Brand Manager.
March 2016

Skechers changes local distributor

after two decades

Skechers recently ended their relationship with one of their oldest international distributors, Footwear Trading. The brand will now be distributed by their successful Middle East distributor, Brand Folio, which recently added Africa to their portfolio

After 22 years, during which they introduced, built and established the Skechers brand in Southern Africa, forged strong and personal relationships with the owners, received numerous merit awards, and were recently inducted into the Skechers Hall of Fame, Footwear Trading’s distribution agreement was unexpectedly terminated.

At the end of February this year, the Middle East distributor of Skechers, Brand Folio LLC, became the new South African distributor of the brand.

This is part of the Dubai-based company’s agreement with Skechers to add Africa, including South Africa, to their Middle East and CIS (Commonwealth of Independent States, formerly part of Russia) portfolios.

Brand Folio has been distributing Skechers in the Middle East since 1997, during which time they grew sales from 11 600 to more than 6-m pairs per year and became the top-selling footwear brand in the Middle East.

Recently they acquired the African and CIS distributorship where the goal is to create a similar trajectory in these newly acquired regions as what was done in the Middle East, according to their website. Part of the strategy is to make a big push into the African market by building new stores throughout the continent.

Footwear Trading, which was one of the two very first international distributors to show confidence in the brand 22 years ago, had no idea that negotiations were underway to end their close relationship, says Stanley Kotkin. “Our perception of the relationship was always positive and strengthened by the fact that there had been no contract renewal in the last 10 years, nor had there even been a visit to our territory from a company representative during this time.”

Footwear Trading, the local licensee/ distributor of other prominent footwear brands like Jeep, Levi’s, Fila, and Diesel (apparel and footwear), is currently in discussion with Bounty Brands. The company, now worth more than R1-bn, has acquired brands like Vans, Hurley, Jeep clothing etc. for local distribution. The distributors (Chappers Sports Direct and Musgrave Agencies) continue to manage the brands as before.

It was during these negotiations that the Footwear Trading directors learnt that Skechers was about to pull the rug from under them.“It was a massive shock,” says Kotkin, “in fact, it was the biggest let-down of my working career.”

Introduce full range

The new distributors started introducing the brand’s full range —1 800 SKUs across 19 categories — to local retailers with a brand showcase event in February. Their first stock will be arriving for Q3, for July-August intake.

Brand Folio’s South African Country Manager, Ahmed Elias Habib, and Brand Manager, Steven Swaby, are keen on showing the South African retail market the full depth of the brand: fashion, lifestyle as well as technical performance.

They will be based in Johannesburg, from where they will distribute and market the brand.

Swaby has more than 20 years’ experience as retail buyer in countries around the Gulf and in Russia for, amongst others, the Landmark stores group.

South African Habib got to know the local retail market through family members who own stores in Johannesburg, and has worked in the African athleisure market for more than two decades as distributor and agent for international brands.

In Saudi Arabia and Dubai Brand Folio sold more lifestyle footwear than any of the other big athletics brands, says Habib.

“We are well established as wholesalers and supply more than a thousand doors,” says Swaby. These include 85 monobrand Skechers stores, managed by their partner The Apparel Group, with more than 1 200 stores of their own. The Dubai-based group also supplies an impressive range of top brands like Nine West, Tommy Hilfiger, Kenneth Cole, Aldo, New Balance, Birkenstock, to name a few.

Brand Folio hopes to repeat their Gulf growth success in South Africa through extensive marketing of the brand to make it more visible among consumers — they plan on utilising the full gamut from magazines, to billboards, taxi wraps, sponsorships, TV, social media and point of sale — as well as showcasing the brand in its entirety to retailers.

They also want to ensure that the right type of merchandise is supplied to the right type of store. Because of Swaby’s experience working for Skechers overseas and as retail buyer, he will be able to advise retailers to buy well, comments Habib. “When a retailer buys wisely, we sell and he sells. Everybody benefits.”

The Apparel Group will also look after the retail side in South Africa and will follow the international strategy of rapidly expanding the number of brand stores.

“They want to open 35 stores in South Africa in the next 3-5 years and expand and revamp the current Skechers stores, where possible,” says Swaby. “Where the stores are too small to accommodate the range, they will be moved to bigger premises.” The idea is that these stores, showcasing the full brand offering, would become Skechers catalogues, he adds.

Reach all stores

Their aim is to market to a wide selection of stores in South Africa, from major chains to independents in remote areas. While it would be ideal for retailers to visit their showrooms to view the full range, they understand that smaller retailers will find it difficult to leave the store and travel and will therefore appoint sales reps to service remote areas.

But, a sales rep will unfortunately not be able to travel with close to 2 000 SKUs and will therefore only be able to show retailers a selection from the full range.

Of the more than 1 800 styles on offer, 800 are for women, 600 for men, 170 for boys, 260 for girls and 100 for infants. Nearly a quarter (48%) of Skechers’ quarterly sales is to women, 30% to men and 22% for kids.

While lifestyle fashion will be the core of the range, all categories will be covered, including casual and technical performance products.

“Skechers technical running has had the biggest growth in the US of all technical running shoe brands,” says Swaby. The brand is now ranked #2 in athletic footwear sales in the US with global sales of about $3-bn.

Sales have been growing with double digits over several years — in the third quarter of 2015 they attained the highest quarterly sales in the company’s history, namely $856.2-m (27% growth), mainly due to Skechers’ international wholesale business revenues growing 53%. In the first nine months of 2015 international sales constituted 40% of total sales and the brand predicts that international sales will contribute half of all sales over the next three years.

Globally, retail sales by the 714 international Skechers stores grew 33% in the 3rd quarter — the majority of the stores are owned by franchisees, distributors or are joint ventures.

“Skechers is for the people who play on the field, but also for the people in the stadium,” says Habib. “We want to give performance and comfort.” He describes the comfort offered by a Skechers shoe as “putting soles on socks.”

While the brand can compete well on technology, this technology offers good value as it is available at a more affordable price than other technical athletic footwear, points out Swaby. The technology, which has won Skechers several awards — including from Runner’s World and the UK Footwear Industry — is available across all the ranges, adds Swaby (also see below). “Skechers is for the athlete who wants to look good in the gym.”

The Skechers Performance Division recently announced a multi-year agreement to become the title sponsor of the Los Angeles Marathon, and is also the sponsor of the Houston marathon. Elite marathon runners like Olympic silver medallist Meb Keflezighi and Kara Goucher, as well as golfer Matt Kuchar, further lend credibility to Skechers as a technical performance brand.

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