Hoka brand to open first retail stores in New York and LA
Hoka’s sales exceeded those of its sister brand Ugg for the first time in Deckers history, the company said when releasing its first quarter financial results.
Sneaker brand Hoka, famous for its padded running shoes, opens its first retail outlets on Wednesday as it bets on bricks and mortar to help fuel greater growth for parent company Deckers.
Hoka President Wendy Yang told CNBC the shoe maker will open its doors to shoppers at a store on 5th Avenue in New York’s Flatiron neighborhood and at a store on Melrose Avenue in West Hollywood, California. .
The brand has signed shorter-term leases on both stores, Yang said, but will likely look to extend the agreements.
“We want to know more directly from the consumer… about what they like, what they want and how their decision-making process works, on an individual basis,” Yang said. “The most important thing is to create a conversation with consumers in person and let them see the benefits [of Hoka] before buying.”
Stores offer 3D foot scanners to help with sizing. There are also lockers where guests can store their belongings and test their shoes while running around the area.
Hoka’s investments are part of a larger direct consumer push in the footwear industry, as brands from Nike to New Balance to On Running to Allbirds move closer to their customers. Nike, for example, is pulling out of unsuccessful wholesale channels and spending more to revamp its stores and website. On Running opened its first store in December in New York’s SoHo neighborhood, expanding its distribution beyond department stores and specialty running stores where customers can find its sneakers.
In particular, the running shoe industry has outperformed other types of athletic footwear over the past year and a half, according to Matt Powell, senior industry advisor at NPD Group. As more and more dollars pour into the category, brands like Under Armor and Puma are paying more attention to racing than ever before. Allbirds launched a running shoe in April 2020, another vote of confidence in space.
“Until the pandemic, running hadn’t been very good for about eight years,” Powell said. “But there’s no question that more and more people are running. Whenever we’ve had times with a lot of people out of work, we always see running shoes, or running as an activity, coming back to life. “
Hoka’s latest financial results are proof of this change. Although the brand also sells hiking boots and sandals, it is known for its wide assortment of running shoes. Hoka’s revenue in the three-month period ended June 30 jumped 95% to $ 213.1 million from $ 109 million a year earlier. (Deckers sales increased 78% to $ 504.7 million in the same period.)
Hoka’s sales also impressively exceeded those of its sister brand Ugg for the first time in Deckers’ history, the company said when releasing its first quarter financial results.
“Five or six years ago, the only people who bought Hoka were the runners who knew about it,” Yang said. “They were the first to try this crazy new kind of shoe. But that’s not the case now.”
Young consumers are also increasingly buying running shoes as street wear, not necessarily for running, says Powell. And that should drive the category’s growth over the next few quarters, he said.
Sales of performance running shoes in the United States increased by about a third in the first half of the year, according to data from NPD Group. Hoka’s sales grew by around 90%, while On Running’s revenue tripled, the market research company said.
Deckers shares have risen about 47% year-to-date. The company has a market value of $ 11.7 billion.