Andrea O’Donnell on UGG’s evolution, expansion into apparel
Feb 6, 2020
Deckers Brands is a giant. A conglomerate with a solid footwear portfolio, which includes Californian boot brand UGG, running specialist Hoka One One, and sandal labels Teva and Sanuk. Last year, its revenues surpassed the $2bn mark (€1.8bn). But what is the company doing to boost sales? As UGG launches its 12x12 collection, sold by Japanese sneaker brand Atmos, Andrea O'Donnell, president of fashion lifestyle at the group since 2016, talks with FashionNetwork.com about the company’s strategy, the investment in brand collaborations and focus on sustainability. The next phase of growth will see UGG accelerate its men’s collection, expand its clothing offer and possibly acquire new brands that complement the group’s portfolio.
FashionNetwork.com: What have you been focusing on since you joined Deckers Brands as president of fashion lifestyle, and what is the strategy behind your plan?
Andrea O'Donnell: My main focus for the past four years has been the brand and the product. From the brand’s identity and the way we market it to budget decisions, I’m responsible for all product activities including strategies across all categories, design and pricing.
At UGG, my first responsibility was to understand what we had on our hands and where we were going in terms of growth. So first, I focused on the brand, which was until recently firmly positioned as a classic and functional boot brand, without a real fashion focus. The goal was to elevate the narrative, and steer it towards our Californian lifestyle roots, which allowed us to do many other things differently. Additionally, I brought in a new design team. Nobody needs more things, right? So the product needs to be truly beautiful. We had to rethink the brand and the product. We already had a sneakers offer, but it was focused on mainstream shopping centres. I realised that if we wanted to grow rapidly in this segment, which is a significant market, we needed to do things differently.
FNW: What is the basis of this renewed approach? How did the collaborations with brands like Atmos, Bape, Heron Preston and White Mountaineering come about?
AO: We made several attempts in the sneakers segment and, in January last year, one of our styles started taking off in Japan. When something like this happens in this market, you can be sure you have something good on your hands. In April I met Hommyo at Coachella, the founder of Atmos, and he told me he was optimistic that UGG could be seen as a sneakers brand. If we wanted to enter a mainstream market dominated by Nike and Adidas, we had to do something unexpected, with a clear fashion approach.
At the same time, I knew that we had to learn fast, so connecting and collaborating with industry specialists has always been a fundamental part of the project. The collaborations have an important commercial element regarding marketing and PR, but for us there is another equally important part, which is that we can learn a lot from the top creative players we are working with. So we adhere to a long selection process, and our collaborators need to have a show in one of the main fashion weeks as well as powerful distribution networks. UGG is mid-way through a transition, we are evolving, changing how we define ourselves and our products.
FNW: How would you describe this identity evolution? Why was it necessary?
AO: We are commonly recognised as an Australian cold-weather brand [UGG was actually founded by Australian Brian Smith in California in 1978]. Therefore, the most important issue is to change the narrative of our brand towards a California lifestyle firm. The original classic boot was provocative when it launched as it had a rather unusual shoe design. Now we are a fashion brand, which implies an important change in terms of how we present ourselves compared to three or four years ago. At the time, the main focus was on functionality. Everything revolved around our boots for the cold winter months. It might seem like a small adjustment, but for us it has been very significant. Now we approach customers with a new tone, telling them that not everything is about numbers and profits, but emotions. It's about beauty and storytelling. I think these have been the most important changes.
FNW: How have the industry and consumers reacted to this transformation?
AO: I think one of the things we didn't do for a long time was investing significantly in marketing. This has changed because, obviously, if you want to evolve the way you interact with the consumer, you need to be visible and talk about it. Throughout the last year we have worked in this area and I think we are making good progress, especially in America. Additionally, this has radically changed the way we are seen among fashion influencers. Five years ago, in the US, they were not particularly interested in the brand. Now they care a lot. Beyond this market, I think there is more to do in the rest of the world.
FNW: What are the brand's future challenges? Known as a footwear specialist, do you plan to branch out into new product categories in the future?
AO: This September we’ll launch a clothing collection, which we’ll start showing to the press from March. For each collaboration we are preparing, we are also designing a clothing collection. Clothing presents a great business opportunity. It’s an ambitious category, but we have a good emotional connection with our customers, which is unusual for a footwear brand. When you have a connection like this, you have permission to allow yourself certain things. We had already entered the segment, which currently accounts for about $100 million in sales , but we want to boost this growth. Up until now, the collection has been small and mainly focused on loungewear. But this is about to change, with an impressive range that embodies the values UGG stands for. It will be very tactile, soft, colorful and with a Californian vibe.
FNW: And what about the lesser known menswear collection?
AO: Menswear continues to be important, but it accounts for just a small part of our business. We haven't really advertised it much but we are investing significantly resources in this category and are progressively giving it more prominence in our campaigns.
FNW: Last year, Deckers Brands made record revenues of $2.02 billion. What is the company doing in terms of sustainability?
AO: The truth is that we have been working in our supply chain for a long time and we publish a lot of information on our website. For example, all sheepskin used is a byproduct of the food industry. We don’t have farms or kill animals in our production chain. We work hard with our factories to maintain the artisanal side and ethics of our company. We carry out many initiatives, but we are quite discreet about it.
Regarding the product, the Spring Summer 2021 collection introduces a sustainable sandal with an outer sole made from sugar cane, as well as styles with biodegradable soles. And for the Winter 2021 collection, we will probably promote our initiatives more, being the first time we talk about it openly to the consumer.
FNW: Why haven't you taken this step before?
AO: There is a lot of talk about greenwashing. When we speak publicly we want to be 100% sure we have done the necessary work and research, in addition to working with some of the best experts in the market so we can lead the conversation. Until then, we will continue to do what we are doing, which is already quite good. A shoe is not going to save the planet, of course. And I don't want to give that impression until that’s really the case.
For example, we are spending a lot of time trying to understand how to do things completely differently and how to incorporate sustainability into our design culture. This year, we are implementing the LCA program [Life Cycle Assessment], which designers can use to verify the sustainability of all materials used in footwear, so they can understand the extent to which the products they are creating are sustainable. This is one of many initiatives we are currently working on.
FNW: Looking ahead, is Deckers Brands considering acquiring or developing a new brand?
AO: We are evaluating all options. I think we are always studying the potential of other brands and improving our own. Our investment priority continues to be UGG, as it is one of the world's leading footwear brands, and Hoka One One, which is recording strong double-digit growth. The plan is to strengthen these results and assess a possible acquisition or the launch of a new brand. We have no complaints, we are certainly very busy!
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