The
Walking Company forges a profitable retail market for comfortable, technically
advanced shoes and accessories.
To say that walking has become an American way of life is an
understatement. Everyday, in cities, people pound the pavement on their way to
and from work. In suburbs, they march through malls in search of great sales.
In the rural countryside, they trek over trails in an effort to commune with
nature and seek new adventures. While all this walking might make Americans a
little healthier, it can also leave a person's feet aching and sore.
Even though walking has
been the most basic means of transportation since the beginning of human life,
it seems feet have been virtually forgotten. From flimsy loafers to bulky
hard-sole boots to constricting narrow pumps, American have long tortured their
toes. In the 1980s and through the 1990s, however, Americans have finally begun to
wise up: They're putting away their massagers and purchasing everything from
athletic sneakers to ergonomically designed hiking boots to wide-toed sandals.
Suddenly, comfort rather than style has become the selling point for most shoe
buyers.
"The lifestyle today is one based more on a
comfortable, outdoor lifestyle," says Steve Adler, co-founder and president
of The Walking Company, a lifestyle
retail chain that specializes in high-end walking shoes and gear.
"In the 1980s, we noticed there was a change in the
landscape in shoes." Around that time, sneaker companies, such as Nike, Converse
and Adidas, started marketing athletic
shoes specifically designed for various sporting activities. Leather basketball
shoes emerged; cushioned running shoes started hitting store shelves. Adler, who
ran a family-owned shoe business in California, and an associate, Jim
Argyropoulos, who ran apparel manufacturer Cherokee Shoes and Clothing and sold
merchandise to Adler, noticed that the comfort these shoes provided enticed
Americans to wear them as everyday attire, despite the reasons for which they
were designed. Thus, the sneaker and shoe business has turned into a
multi-billion dollar industry.
"When I was in high school, no one wore athletic
shoes," says the 39-year-old Adler. "You wore some kind of boat shoes
or penny loafers. Suddenly, we started seeing people wearing these white-based
athletic shoes for just walking around. Jim's observation was that people were
wearing these shoes for one reason: comfort. Air Jordan's, for example, are
probably worn by more people walking around the street than playing
basketball."
That changing market has created a new opportunity for
thrifty entrepreneurs. Adler and Argyropoulos, who now serves as The Walking
Company's chairman of the board, also realized that an even newer trend was on
the horizon. Granted, sneakers have come along way since the days of canvas
hi-tops with flat rubber soles, but even the fancy new units aren't for
everyone. "When you wear white athletic shoes with Khakis and jeans or anything
like that ... it looks kind of stupid," Adler says.
That's why, in the late 1980s, the two shoe veterans created
the concept for The Walking Company, which sells high-end shoes designed for
comfort but tailor-made for the 1990s and beyond. The chain sells a vast array
of shoes that can be worn with nearly any everyday outfit — from casual
professional to Generation X-chic. Also available is a large stock of hats,
gadgets, apparel and walking sticks, all designed to make everyday walking an
enjoyable experience.
Merchandise in The Walking Company often features a unique
European-American flair. The reason is that today's high-end walking shoes in
America were born from European designs. In fact, Adler and Argyropoulos
developed the plan for the retail chain, which markets its own line of walking
gear as well as other high-quality brand names, after Argyropoulos' return from
a European vacation.
While in Europe, Argyropoulos noticed an obvious lack of
sneakers. "He said, 'The only time I saw a person wearing a white-based
athletic shoe was either a European who was going to play tennis or an American
tourist'," Adler recalls. The observation struck the American shoe expert
strangely, especially since he knew that the technology used in sneakers was
often copied from European shoe designs.
"We thought there might be something in all this,"
Adler continues. When they researched European designs, they found that the
European companies, such as Birkenstock,
were making non-athletic walking shoes. Often, they provided the same comfort
and support as the American sneakers but provided more function and style as
everyday wear.
A walking shoe can be anything from an athletic shoe to a
casual shoe, Adler explains. "The inside, the gut, of the [European
casual] shoes are every bit as technical as the most technically advanced Nike.
They have the air. They have the gel insides. They have the arch supports. They
have the all the intricacies on the technical side, which make a great shoe.
The only thing we found wrong with the European shoes was that they were
ugly." Nevertheless, they saw the future of footwear. Combining the
European designs with an emerging American lifestyle, the men had the foresight
to jump on the walking-shoe bandwagon early and opened their first store in
Southern California on July 1, 1991. Today, The Walking Store can be found in
63 regional malls throughout the country. Adler says the reason the new style
of walking shoes has caught on is that American consumers are now purchasing
shoes for a more casual lifestyle, and even for more formal environments.
"We felt that 'Casual Friday' (a popular trend in American
corporate life that allows workers to dress down at work one day during the
week) would become 'Casual Everyday'," Adler says. "Also, the younger
people that were starting to come into the workplace grew up in the '80s and
were used to wearing athletic shoes everyday. It was going to be hard for them
to start wearing hard-sole shoes like their dad'. We thought they were going to
want to wear something more comfortable. Now, instead of the secretary in New
York walking to work in sneakers and a dress, which looks goofy, she can wear
something that's comfortable and goes with the dress."
Today, more and more companies are adopting
casual-professional work environments. Take a look at your office. Workers are
becoming more comfortable and leaving their coats and ties in the closets.
Casual retail clothing stores such as Old Navy and The Gap are growing at rapid
rates. Slacks and dresses are being replaced with jeans and Dockers. As it
turns out, Adler and Argyropoulos were one step ahead of the times.
Adler and Argyropoulos didn't take the retail world by
storm. Rather, they crept into the lives of comfort-seeking consumers.
Their first store, which the two men self-financed, opened
in Pasadena, Calif., and struggled to stay afloat. According to Adler, the
store is no longer in existence, but points out that the store also fell victim
to some bad luck. Shortly after it opened, the store endured a couple of
earthquakes and a fire. But the two men were resilient and built four other
locations within a year. All were small with approximately 1,000-square feet of
space and sold only what the men considered high-quality walking shoes. Often
the shoes carried a high price tag, which may have scared off consumers not yet
used to buying high-priced footwear.
The four stores eventually made enough for the owners to
expand their inventory, and from there they took off running. "Once we got
up and running as a shoe store, we saw that the trend was becoming more than
just shoes," Adler says. "Now, people don't like to just sit around
the house. They like to get out and do different things, whether it's mountain
biking or hiking. People want adventure now, so there's a whole adventure
travel growth area that we've gotten into." To appeal to those adventure
travelers, Adler and Argyropoulos introduced clothing and accessories,
including walking sticks, hats, backpacks, fanny packs and other gadgets.
"Anything that makes your life more comfortable," Adler explains.
That doesn't mean the proprietors have abandoned their
high-end inventory. The Walking Store doesn't sell just any accessories, just
as it doesn't sell just any shoe. According to Adler, if the merchandise
doesn't serve a purpose, the store doesn't carry it. "Everything has to be
technical and have a reason to be," he says. "If we have a hat, it
has to provide real sun protection where the brim has to be a different color
that reflects UV rays. The walking sticks aren't just wooden sticks for looks.
They actually work. It's easy to say that, but you never used to find a store
that cared about the products they sold."
Additionally, Adler and Argyropoulos test everything their
stores carry, right down to the instructional books. They also trained every
worker to know the ins-and-outs of the walking business, awarding them points
for accumulated skills. Adler says that the company promotes based on skills
and knowledge rather than seniority, so every customer is getting the best
possible information and service when they enter the store.
"It's that type of feel that we've developed throughout
our stores," he says. "That's how our company has grown." Now,
the company, which at one point had trouble filling a single 1,000 square-foot
store, is already filling 6,000 square-foot locations after only six years of
operation in a new merchandise category.
The company has also
recently added a series of free seminars on walking, proper walking apparel,
and the importance of a health exercise program for corporations and other
groups.
Adler compares his stores' growth to similar growth
experienced by specialty chains such Foot
Locker, the national retail athletic shoes and clothing store. He says Foot
locker was able to grow in the '80s because their base merchandise category,
athletic shoes, became more understandable and commonplace to consumers.
Eventually, he sees The Walking Company experiencing the same success. "If
you're wearing a pair of Skechers today, you'll wear a pair a pair of walking
shoes soon," he says.
The reason athletic shoes became a booming business is not
entirely attributable to the manufacturers. Before Foot Locker was established,
sneakers were sold as peripheral items in multi-purpose department stores. Once
the shoes were made convenient to the public, sales grew dramatically in a
short time.
Adler says the same happened for walking shoes. "I
think people were always into it, but it was never offered to them," he
says. "It's very expensive and very difficult to make this type of
footwear, and it takes a long time." Also, The Walking Company has become
a big hit because concentrates solely on conquering a category rather than
cross-merchandising its stores. In the beginning Adler and Argyropoulos decided
that they would become a category killer. "Foot Locker came out and said,
'We are going to be a small store, and we're going to carry everything in the
category of athletic shoes,' and no one else could do that at the time,"
Adler explains. "Although Foot Locker hasn't grown with the times, other
companies such as Just For Feet and
Sneaker Stadium made super stores for athletic shoes and became category
killers."
When The Walking Company was able to add the periphery
merchandise to fill the category, it indeed became a category killer, Adler
says. Just as he and his partner had planned, the process has attracted
attention from malls seeking to fill space with high-volume stores.
One of the difficulties for marketing walking gear is price
points. Right now, shoes can cost upwards of $200. "You're not going to be
able to buy a great $50 technical walking shoe," Adler says. "We're
trying to bring the price points down to $100."
Adler expects the price to eventually fall enough to meet
expectations of more mainstream consumers. He says younger buyers are more used
to paying high prices for sneakers and are less prone to sticker shock
concerning walking shoes than older customers. Eventually, younger buyers will
probably make up the bulk of the company's customers.
Adler says that there is growing interest from developers to
place The Walking Company stores in several additional locations throughout the
country. He maintains that the company will be particular about location,
adding that location is the most important factor to sustaining growth.
The company has begun to
take its business to the streets as well, opening up stores in downtown Seattle
and San Francisco. The third non-mall location is in the Georgetown area
of Washington, D.C. "We're just starting to expand in that area,"
Adler says.
Adler won't say how much the privately held company has
already grown in terms of sales and profits, but admits that growth has been
"tremendous over the last four years." He also says the comp store
increases have also been "great."
"I think we're just starting," Adler says. "I
don't think we're even close to post-peak. [Walking] is lifestyle, and I think
any footwear out there that isn't technically made for comfort is going to be
history."
Company: The Walking Company
URL: www.walkingco.com
Founders: Steve Adler and Jim Argyropoulos
Industry: Walking footwear and accessories
Location: Chatsworth, Calif.
Founded: 1991
Revenues: undisclosed
Copyright © 2000 by Virtual Advisor, Inc. All rights reserved.