RCG Corporation, THE company in charge of The Athlete’s Foot Australia, has embarked on an aggressive strategy to dominate retail and wholesale distribution in the comfort and lifestyle footwear sectors.
The footwear stable has acquired the Australian rights to distribute Merrell, a brand comprising outdoor, comfort and active footwear and apparel, effective January 1, 2010. It will set up an independent wholesale and distribution business for the brand, resulting from an agreement with the US-based owner of the label, Wolverine World Wide.
RCG Corporation executive director Hilton Brett said the company believed Merrell had the opportunity to grow within existing and new customers. Brett said he anticipated the brand would turn over in excess of $12 million in its first year.
Opening Merrell retail stores nationally would be a key focus, he said, and the company is planning one new store in 2010 and 12 stores over the next few years in high-profile shopping centres.
The company has also acquired Shoe Superstore for an initial upfront investment of $1 million,
including working capital. Shoe Superstore has three stores in New South Wales as well as a transactional website. It stocks a number of comfort and lifestyle footwear brands including Birkenstock, Hush Puppies, CAT, Kumfs and Florsheim.
Shoe Superstore would also operate as a stand-alone business and would serve as a foray into non-mall-based comfort lifestyle retailing, Brett said.
“Within The Athlete’s Foot our new stores are focused on the comfort, lifestyle area, so there are synergies between the two businesses as far as dealing with suppliers are concerned.”
He said the company aimed to open Shoe Superstore outlets in high-traffic precincts nationally over the next five years. It would also focus on ramping up its online transactional component.
In further moves to increase strength in the comfort and lifestyle footwear sectors, RCG has been rolling out larger floorspaces in The Athlete’s Foot stores to cater for product growth in this area. Four stores have been converted, with 10 more to be operational by Christmas 2009.
The moves coincide with the release of RCG Corporation’s full-year financial results for 20098/09, which saw the company achieve a record net profit before tax of $7.6 million, up 27.5 per cent on the previous year’s result of $5.97 million. The Athlete’s Foot network recorded total sales growth of 15 per cent to $166.7 million.
RCG Corporation chairman Ivan Hammerschlag credited the sports shoe retailer’s focus on fit and function rather than price and fashion as integral to its success in the difficult financial climate.
There are 136 The Athlete’s Foot stores across Australia and New Zealand.