Executive Retail Insights: RG Barry CEO Greg Tunney (Jan 2015)

Executive Retail Insights: RG Barry CEO Greg Tunney (Jan 2015)

Each month FDRA interviews footwear executives to get their take on the overall footwear marketplace and other interesting topics.  This month, FDRA interviewed  President and CEO of RG Barry Brands Greg Tunney on how slippers are faring in the marketplace today and what he sees for the future of the business, as well as overall marketplace trends.  Greg joined accessories and slipper marketer R.G. Barry Corporation in February 2006. Under his leadership, the Company consistently has been among the most- recognized and best-performing publicly-owned accessories suppliers in North America. Greg has more than 20 years of senior-level experience in the footwear and retailing industries. He is also FDRA’s chairman.


FDRA: 2014 was a pretty flat retail year for the footwear industry.  What are some effective footwear strategies you saw in 2014 either online or in store?

GT: We deal with all of the major retailers, which entail many diverse doors Walmart- 3,956, Target -1,800, Kohl’s -1,161, etc. The opportunity to maximize sales growth through retail analytics was critical this year.  We continued to see growth through our analytics – growth by clusters, regions and store groups. It’s all about optimization of inventory management down to the door level.  Our key partners continue to look to our retail analytics team to get the right product at the right time at the right price to the right door.  It’s a science that just keeps progressing to a new level each year.  On the Dot.com side of our business, 2015 will mark a significant milestone for our company.  We are implementing the DEMANDWARE Dot.com platform for all of our brands. It will provide the architecture and structure that we will need to compete and succeed in the DOT.com world for the next decade and beyond.  It is a major CapX expenditure for our company, and we are really excited about the opportunity it provides for our brands.

FDRA: The slipper business is a seasonal business.  How do you and your partners approach retail differently when compared with traditional segments of the footwear industry.

GT: I have been in the footwear business for over 25 years, and for 15 of those years I have been associated with the top slipper brands in the industry.  Everyone in the footwear industry thinks they need to be in the slipper category as an extension of their footwear brand.  However, slippers have a unique construction compared to traditional footwear.  The factories are different.  Good shoe factories don’t make great slippers and vice-a-versa.  The other unique aspect of the slipper business is the seasonality.  You have about eight weeks to sell 80% of your inventory in a profitable manner or your dead. It’s a very short season and each year the compression of sell-thru moves closer and closer towards Christmas, making it even more challenging.

FDRA:  Slipper product offerings seem to be far more diverse and robust these days – are companies who distribute slippers starting to customize their products to meet constantly changing consumer behaviors?  And what are some interesting innovations you’re driven at RG Barry over the last several years to meet these consumer trends.

GT: One of the reasons I came to RG Barry almost a decade ago was because I thought the company was in a sleepy category that really had the unique opportunity to be reinvented.  When I arrived, most of the slippers we sold were used in and around the bedroom and bathroom areas of consumers‘ homes.  With the casualization of America we begin developing products that first could be worn in and around the home, going outside to the mailbox, for example.  Then we started making products you could wear to hangout in at Starbucks.  We begin seeing the trend on college campuses where co-eds were wearing slipper-inspired footwear to their classes with sweats or pajama bottoms.  That was really unique seven or eight years ago, but now it’s normal.  We have seen a significant fusion of casual footwear and traditional slippers. When we hit a product that addresses that intersection, we see a tremendous response from the consumer.  It’s been fun and rewarding to watch this evolution.  The category has a totally different vibe for consumers today versus in years past.

FDRA: What do you see as the footwear industry’s biggest challenge in 2015?  Conversely, where are the opportunities for greatest growth.

GT:  I think the industry has many challenges, but I will just mention a couple.  Additional consolidation is long overdue for the footwear industry.  We are way too fragmented and consolidation will strengthen long-term health.  Look at banking, retailing, energy,  footwear/apparel factories and many other industries that have gone through the natural evolution of consolidation.  We need more larger and stronger players, like Nike, who can sustain and drive significant long-term organic growth through investment and innovation.  The other concern for our industry is in the Sourcing/Duties area.  As an industry we have enjoyed for the past 25 years a stable sourcing platform for our industry through China.  We had an unlimited labor pool of willing and able workers; a flat-lined currency; and an infrastructure of factory and ports to support our growth.  Fast forward today and the industry is facing labor shortages in China, high social cost and a currency that is more in line with real market conditions.  During the next 3-5 years the industry will experience a major shift in our sourcing structure away from China and into Southeast Asia – Vietnam, Cambodia and Indonesia.  The passage of the Trans Pacific Partnership will be the major accelerator in the process that will allow significant reductions in tariffs and duties on footwear exports from these countries verses China.  When I began in the industry, America was the largest manufacturer of footwear. We then moved to Brazil, then Taiwan and Korea, a little shift to Mexico with NAFTA and now 80% of all footwear that is worn in America is produced in China.  So, yes it is time for another shift in the sourcing landscape for our industry.

FDRA: Lastly, tell us about the shoes you wear?  What’s in your closet?  What are some of your go-to’s through out the typical work week.

GT:  First, I don’t want to sound like a Shoe Snob, but when I started in this industry one of my first bosses said if I was serious about my career in the footwear industry, I needed to wear real shoes.  I have a very narrow foot so it is hard to find good fitting shoe.  I wear a perfect 10d from Ferragamo and every dress shoe that I have owned over the past 25 years has been a Ferragamo.  Also, when your shoes fit well you don’t need socks, so I usually don’t wear socks with my Ferragamos.  We have a very causal office environment, so during the winter I am usually wearing some retro athletic shoes like the Puma Clyde.  In the summer I am always wearing sandals to the office and I only wear Olakai.  Simply put, Olakai makes the best sandals on the planet.  Last but not least, if I am in the outdoors I am wearing HS TRASK.  The new ownership of HS TRASK are making some absolutely wonderful footwear and staying true to the heritage of the brand that originated in Bozeman, Montana.