Sneaker Culture Gazes Inward, Decker Debuts Ahnu, The Collapse Of The Ye School Of Design Emily Oberg Joins Substack
Finance: Foot Locker, A&F and Birkenstock
A Sneaker Culture Reckoning
Since Donald Trump’s chaotic appearance at SneakerCon in Philadelphia in mid-February, sneaker culture has been going through some soul searching with various people on social media weighing in on the state of the culture.
I didn’t catch this until today, but Shawn Stussy, who founded Stussy but sold his half of the brand in 2009, let his thoughts be known shortly after the event on Instagram where he declared, “sneaker culture is officially over.” He followed up with a second post where he described events like SneakerCon as the product of "the culture surrounding what a large group of us started unknowingly" which "has become exactly the THING we wanted no part of..."
By the end of the post Stussy had softened considerably, adding, “sneakers, shoes, and boots will always be something I am into and watching and hoping something comes along to catch my eye and inspire me to participate in…”
As an old scenester myself, I get where Stussy is coming from, mainly because there’s no siren song like that of the good ole days, and yet, life marches on and in reality no generation has a hold on best times ever. The youth, indeed, will always win.
I’m not sure if Kith founder Ronnie Fieg was responding to Stussy, but he also wrote at length at the current state of sneaker culture, taking to X where he first wrote, “Sneaker game isn’t dead. Sense of individuality is coming back.” He following up with a second post explaining further, postulating that the very real and novel disruption caused by the internet through instant and greater accessibility over the past two decades, is winding down.
Fieg added, “Many no longer want the social ad or influencer dictating why they like certain products. It really is a renaissance of sorts. And here is what is cyclical, SUBSTANCE. People will always react to substance. This is the era that will force brands to be on their toes and to never take the customer for granted. It will force brands to measure their work with a gauge of substance rather than social reach. It is coming back to the age of touch and feel. I'm here for it. Kith was built on it.”
A sewing instructor I had frequently told the class that sex and technology are what dictate fashion trends. In other words, new forms of technology that enable designers to innovate as influenced by current sexual mores combine to shape designs.
While the rise of social media isn’t a form of textile or production innovation, it certainly has shaped marketing and how people shop, so it’s interesting that Fieg is theorizing that it’s level of influence is downshifting. In this case, my instructor’s formula might be turned on it’s head. Sex stays as a relevent influence, but less technology is what is moving people (and possibly because they’re not having enough sex!).
All Things Ahnu…Sort Of
Decker Outdoor Corp. today unveiled new sneaker brand Ahnu with the Sequence 1 silhouette ($225-$255), a silhouette described as "guided by the fusion of performance and aesthetic." Plans include eventual expansion into court, skate and basketball silhouettes.
Repeating what I wrote on X: Decker Outdoor owns Ugg, Hoka, Teva and Sanuk, so I see Ahnu as a brand it can use to capture more lifestye share during the warm weather seasons when Ugg is less popular.
Ugg has a lot of loyal wholesale partners, who will at least try out the brand, along with a strong design and marketing team, and I could see where Ugg concluded, why overpay for a brand when we can build one ourselves.
If Ahnu sounds familiar, it's because it's an outdoor brand Decker acquired in 2009 but shuttered in 2018. Decker is not relaunching the brand but decided to stick with the name because of trademark issues.
Tear Down The Wall
London-based brand accelerator Tomorrow Ltd. has acquired A Cold Wall with founder Samuel Ross no longer associated with the label he founded in 2015. Founded by Stefano Martinetto, Tomorrow Ltd. has also invested in Martine Rose, Charles Jeffrey Loverboy, Coperni and Machine-A, a boutique located in London.
Ross is a product of the fashion school of Ye, having worked for him at his creative agency Donda. He was amentored by Virgil Abloh, also a Donda alum, who frequently lauded Ross as a designer with sky-high potential.
While it sucks if Ross lost control of his label, bigger picture it feels like during this period of reckoning we’re seeing a collapse or at least a shrinking of the industrial-athletic aesthetic championed by Ye, Abloh and to a lesser degree Demna Gvasalia.
Looking around the landscape as seen through the lens of Been Trill founders, New Gaurds Group is in collapse, meaning the future of Heron Preston is in question; meanwhile Matthew Williams (who sold a majority stake of his label 1017 Alyx 9SM to Hong Kong entrepreneur Adrian Cheng in November) got bounced by Givenchy, and jjjjoundd designer Justin Saunders remains relevent, but only through his occasional collabs.
Off-White, which recently promoted Ib Kamara to creative director, is still standing mainly because it’s owned by LVMH, but without Abloh’s leadership, it’s clearly a shadow of its former self.
Former Donda designer Jerry Lorenzo retains influence and his Essentials label is still very popular, but let’s face it, his partnership with Adidas has been greatly diminished since he stepped down from the role of directing basketball (a role for which he was allegedly being paid close to $20M a year), and four years after signing with the brand, only a smattering of product has been released.
Even Ye himself seems to have lost his magical hold on his following (though even still, Vultures hit No. 1 on Billboard’s Hot 100 chart), as evidenced by pricing on yeezy.com where all items recently were reduced in price to $20 and are still sitting. At the same time, Adidas’ final tranche of Yeezy launches are not selling at nearly the rate they used to.
I don’t think this reflects a lack of talent as much as the challenges in keeping a small or medium-sized fashion business afloat for longer than 10 years. Ye showed his groundbreaking Yeezy Season 1 collection (which included design input from Abloh, Lorenzo and Gvasalia), in February 2015, which is about nine years ago, a period in line with timing for a label to be born, make a splash, draw collaborations with global brands, inspire copycats, hit a peak, attract investors, face trend saturation and finally, hit the headwinds of poor management and shifting fashion and technology trends.
It’s been my observation that brands and retailers that stay in business for over 10 years (bonus points if they retain their independence) have to be viewed as special and are no doubt run by some very smart, nimble-minded and committed-to-the-point-of-crazy people.
Emily Oberg Muses On Her Come Up
Sporty & Rich founder Emily Oberg has joined Substack where she will write about “the things inside of my brain that I feel are worth sharing— wellness trends I’m trying, recipes I’m eating, books I’m reading, things I’m feeling and so on and so forth.”
As a millennial creative, Oberg has been relatively reticent when it comes to sharing her backstory, so my ears perked up when she opened up about her mother in liu of sharing a caesar salad dressing recipe:
“My mum, my grandma and my aunts are some of the best cooks I know. My mum, whose name is Heidi, was a single mom since I was a baby. She also worked full time and I remember her mostly being busy, but no matter what, she always made time to cook us a homemade dinner each night. It was nice, and I realize now how hard those times must have been for her. I’m not married, I don’t have kids and I feel like I can barely take care of myself half the time so, respect.”
She also writes about her work history at Complex and Kith, starting Sporty & Rich with her ex-boyfriend who is now the company’s CEO, and how she views taking investment money.
Sharing a heartfelt moment many can no doubt relate to (including and especially Shawn Stussy!), she mused:
“Change is inevitable, but scary as fuck. I think if I had one superpower, it would be to keep things the same forever. One of my favorite lines from one of my favorite movies Cinema Paradiso is ‘don’t give into nostalgia,’ but my problem is that I do give into it, and sometimes I let it get the best of me. I have such a soft spot for the past and how things used to be, I mean, don’t we all romanticize how good things seemed, even if in reality, they weren’t?”
Finance
Loose Laces
Foot Locker reported Q423 earnings today, and though the quarter itself was better than expected, the outlook was viewed as a bummer and the stock was down 30% by the end of the day it reported, erasing all the gains it had made thus far this year.
The problem lies in the fact that the financial objectives, known as the “Lace Up” plan, which were announced in March of last year, are now projected to take an additional two years to achieve than originally anticipated. In the company’s earnings announcement, CFO Mike Baughn explained, “We maintain conviction in the longer-term earnings potential that our “Lace Up” plan will generate and reiterate the 8.5%-9% EBIT margin target communicated at our March 2023 Investor Day. Given our lower starting point exiting 2023, we expect a two-year delay in achieving that goal and now see reaching that target by 2028."
During the call, CEO Mary Dillon highlighted Nike first, but also touted that sales of brands ex-Nike were 40% in Q4 versus 37% last year.
Additional brand comments…
Nike: “We’re excited to return to growth with them later this year as we focus on our core pillars of basketbal kids and sneaker culture.”
New Balance: “Now our fourth biggest brand grew again in excess of 100% with strength across genders and franchises.”
Ugg: “Played a meaningful role in our business this holiday with must have styles such as the Tasman and Ultra Mini, Ugg was one of the most in demand footwear brands, especially for our fashion-forward expressionists, led by the teen girl consumer.”
On, Hoka and Asics: “We will continue to scale these brands through door expansion and allocation increases…and we are especially pleased to introduce Hoka to kids earlier this quarter at our Kids Foot Locker and Foot Locker banners.”
Adidas: “We also continue to see momentum with the Adidas Terrace trend. We saw strong sell-throughs of key silhouettes such as the Samba, Gazelle and Campus as our inventory and in-stock positions improved throughout the quarter. Our investment in these Adidas franchises will continue to drive growth into 2024, as we elevate the in-store presentation and connect with consumers in our spring trend campaign and our back-to-school messaging.”
A Chin Gets Checked
Since I mentioned Abercrombie’s rise in a prior newsletter, I’d like to note that the brand’s success continues mostly unabated, with the brand reporting comps up a stunning 16% (Abercrombie: up 28% and Hollister: up 6%) Commenting on results at Abercrombie, CEO Fran Horowitz herself was amazed, stating, “Wow, the team delivered their 11th consecutive quarter of sales growth with an impressive 30% sales increase year-over-year. We continue to find new ways to win with our target audience, resulting in great balance and consistency in addition to growth acceleration. Similar to Q2, we saw growth in units, AUR, genders, regions in both stores and digital direct channels.”
As shiney as the numbers were, it wasn’t a perfect quarter Hollister fell slightly short of expectations, leaving investors to wonder if the brand’s fairytale ride might be over with the stock sliding from a five-year high of $145 less than a week ago, to a close of $127 today.
Cold Comfort
Birkenstock reported Q1 earnings last week, the German comfort brand’s second earnings announcement since going public in October. Given that half the people reading this know David Kahan, the brand’s Americas CEO and everyone’s fave, I’d like you to know that he was on the call and also answered some questions.
The quarter was solid but by no means amazing with revenue of revenue of €303M euros handily stepped past expectations of €289.1M eruos while margins of 26.9% just squeaked past expectations of 26.4%.
Birkenstock’s IPO price was set at $46 and it closed the day at $41. Despite it’s shakey debut, it received a a slew of upgrades in early March, this despite the fact that LVMH-associated (Alexandre Arnault is on the board) L Catterton, which purchased Birkenstock with Financiere Agache in 2021, retains a less-than-stellar reputation for taking companies public. And yet, six months after going public, the stock is now priced at $45, a not bad 10% growth since its IPO.