Great Strides: The Walking Company

 

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.

 

European Influence

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.

 

The Next Steps

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.

 

Speeding Up Growth

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.

 

Marching Toward the Future

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 Snapshot:

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

 

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