The Exchanges

Q Yeah, I'm sure it's not easy. On the re-acceleration, talk to me about how one approaches that. If we start on product, is it keep same product? Is it innovate? Is it more SKUs, less SKUs?

A When, um, We brought in a new president around 16, 17 for the brand. And my remit to that person was just disrupt this brand. Like you need to change people's perceptions of the brand. And I didn't have an idea of what that was going to be, but it was basically like, Get people to notice UGG in a new, different way. And so, um, Andrea, who was the president at the time, you know, really ran with it and pushed the fashion envelope of it, pushed creativity, you know, brought in a lot of color materials, different influences we partnered with. And next thing you know, it was like, oh, there's something happening at UGG. Like there's something exciting going on with that brand. And then we started introducing, you know, iterations of the classics, new product, That still had some of the DNA of the original brand. And then so, you know, it just started changing people's perception. And at that time we were cleaning up the marketplace to be able to go back out with the right people in the right locations with the right inventory. And now, um, you know, we have a new president of the brand, Ann, who's been here just over a year, and it's all about focus. We're reducing SKUs. We're innovating off the classic in really exciting ways. We're leveraging, you know, some of the best influencers in the world. There's so much excitement about the brand one, but then we have so many best sellin…

AI assessment note: “We're reducing SKUs. We're innovating off the classic in really exciting ways.”

Q But then there's also brand immortality, I think, which is like, you know, Balenciaga, I'm sure you know the brand. When it went through recently in the last year, I can't remember whenever it was, just Brand destruction with some of their campaigns. Balenciaga selling more than ever now. Brand immortality. And so I guess my question is, at what stage does a brand become too big to fail almost?

A I think it's really the legacy brands, you know, newer brands, they don't have that longevity or the history, the archives that a lot of these luxury brands do, and they can reach back to their history as a way to go forward. If you're a young brand and you don't have that, you run the risk of just being, you know, a flash in the pan. But Balenciaga has such a history, you know, all those luxury brands do. And they also have just a baseline of consumers. They'll ebb and flow and they'll grow and, you know, contract a little bit, but it's not, you're not going to walk into a Balenciaga and see a Black Friday fire sale ever.

AI assessment note: “I think it's really the legacy brands, you know, newer brands, they don't”

Q Is it hard for you motivating teams when one or two brands crush it? You know, when you have five kids and two get into Harvard and MIT and the others get into community college?

A There's certainly some of that, you know, and, but we spent a lot of time just making sure that brands know their role in their portfolio and, you know, that their, what their intentions are and what, what their purpose is and they focus on that. But I think more than anything else, we, We try to instill this philosophy that if, if, if some brands win and others don't, Decker's is still winning. You're part of Decker's first. You're part of your brand second, so to speak. And so if Decker's is, is winning, you're, there's still something to be excited and believe in. But yeah, there's always that level of, ah, I wish we got more attention, or we got more resources, or.

AI assessment note: “There's certainly some of that, you know, and, but we spent a lot of time”

Q Oh, there's so many things for me to dig into that. I'm going to let you go on Converse and then I'm going to dig into them. Okay. So Converse, what was that?

A Converse was really about, you know, Tuning into who your consumer is and why they love your brand. You know, we, when I went to Congress, we were developing the first retail concept and we spent a lot of time, you know, months and a lot of money spending time with consumers, understanding what it is they loved about our brand. Once we figured that out, it just unleashed this whole opportunity of connection with our consumer. It was all around the idea of unleashing creativity. Because what we found is that consumers love the brand because it makes them feel creative for whatever reason. People used to write on, you know, their Converse, Chuck Taylors. I used to do that when I was a kid in classrooms. And we just obsessed around the consumer and we created experiences around what those consumers were into and why they love the brand. And I think, so the biggest thing I learned there was really just, you have to obsess the consumer and you have to bring Those experiences to them. Um, but on a, you know, on a leadership side, Timberland and I learned the power of service and giving back to your employees and community. At Converse, I learned that, um, I hate a political environment and it's a very unhealthy way to work in a business.

AI assessment note: “Converse was really about, you know, Tuning into who your consumer is”

Q so that makes sense. So, okay. Let's not acquire because we have great assets, which we actually can optimize and make into even better assets. Yeah. Just pushing your strategic thinking here. Why not cut two others? You mentioned poker. You mentioned, uh, the two others, I'm sure probably account for minimal revenue in the grand scheme now compared to the others. Why not cut them and just focus? Yeah.

A We just announced that we're going to, um, you'll look for a buyer for one of our brands to nook. Right. And so we're really placing a bet on Teva. You know, when we look at acquisitions, um, we've looked at, you know, a lot of smaller outdoor brands out there because we feel that's a, that's a category in a space that, uh, has opportunity. And honestly, when we looked at Teva and compared to all these, you know, these brands that we could have potentially purchased, Teva has the best global awareness. It has the best margins. It's, it's an iconic heritage brand. So we just, we're treating that as an internal acquisition. It's a good question. You know, we don't need the smaller brands to be successful. I like them because they're, you know, they have potential. Um, we learn from them. They're great development opportunities for employees. We can test a lot on these brands without making big, you know, mistakes. And you never know, you know, some of these smaller brands could end up being massive, just like Ugg and Hoka.

AI assessment note: “I like them because they're, you know, they have potential. Um, we learn from them.”

Q How do you do that, Dave? Do what? Distribution. Build brand love. Build seeds of community.

A You got to start with the core runners and the run specialty channels. You know, if you are an athlete or you're a runner and you go into a running store, best hope is that the salesperson on the floor pulls your shoe out of the back room and says to the consumer, you need to try this on. That's where it all came down to for us is The salespeople started recommending Hoka to people because of the way it performed. That's where it's all. That's where it happens. And then it just kind of builds from there. But if you have to win market share in that channel and be important in that channel before you can expand out. And, you know, I think with our technology and our performance, we've been able to do that.

AI assessment note: “You got to start with the core runners and the run specialty channels.”

Q But then there's also brand immortality, I think, which is like, you know, Balenciaga, I'm sure you know the brand. When it went through recently in the last year, I can't remember whenever it was, just Brand destruction with some of their campaigns. Balenciaga selling more than ever now. Brand immortality. And so I guess my question is, at what stage does a brand become too big to fail almost?

A I think it's really the legacy brands, you know, newer brands, they don't have that longevity or the history, the archives that a lot of these luxury brands do, and they can reach back to their history as a way to go forward. If you're a young brand and you don't have that, you run the risk of just being, you know, a flash in the pan. But Balenciaga has such a history, you know, all those luxury brands do. And they also have just a baseline of consumers. They'll ebb and flow and they'll grow and, you know, contract a little bit, but it's not, you're not going to walk into a Balenciaga and see a Black Friday fire sale ever.

AI assessment note: “I think it's really the legacy brands, you know, newer brands, they don't have that”

Q Final one. And then we will discuss AG, which I want to, but Barney, yeah, I don't know how to ask this kind of, you need to be on, right? It's a, it's a, it's a competition. Do you feel that? And if so, what do you need to do to beat them?

A I mean, we don't wake up every day thinking how we're going to beat on what is on doing. You know, I have a lot of respect for, um, the team there, what they've done to create that brand, how they built the product. It's fun to watch, honestly, um, as a competitor, but we're fighting for the same fame, same shelf space, market share consumer. So naturally we're, you know, competitors, so to speak, but I think we both come at it With different approaches, different technologies, and we just got to stay true to ourselves. Honestly, Between the two of us, our market shares are still relatively small globally. There's so, so much potential for both brands to do incredibly well. Do we talk about, you know, beating them and performing better than them and staying ahead of them? Sure. You know, we do that with every brand we compete with, but I think there's just tremendous opportunity for new, fresh brands like Anand Hoka to take massive market share. And, you know, if you look at where Under Armour used to be, Adidas used to be really important. In running Nike. I mean, these are massive businesses that if you take 10% share, that's billions of dollars.

AI assessment note: “we're fighting for the same fame, same shelf space, market share consumer.”

Q Can I be so rude? So rude. Yeah, yeah, yeah. Would you blame your parents for that? And the reason I say that is just because, like, I would want my children to know they can do anything, and that that president role they can get if they work hard. Is that their fault?

A I, you know, we were just talking about this the other day with some friends about this. I grew up in New England, you know, which is the part of the country in the U S that's very kind of old school, conservative set in its ways. And, you know, I'm one of the only or few people in my extended family that have left New England and, you know, pursued something beyond what was available to me there. And so I think, I do think that there is a mentality in my parents that was like, you can't do that. Like, That's, that's crazy, you know. So I, I wouldn't blame them for it, but I think that the, the small thinking was part of my family culture, for sure.

AI assessment note: “So I, I wouldn't blame them for it, but I think that the”

Q Final one. And then we will discuss AG, which I want to, but Barney, yeah, I don't know how to ask this kind of, you need to be on, right? It's a, it's a, it's a competition. Do you feel that? And if so, what do you need to do to beat them?

A I mean, we don't wake up every day thinking how we're going to beat on what is on doing. You know, I have a lot of respect for, um, the team there, what they've done to create that brand, how they built the product. It's fun to watch, honestly, um, as a competitor, but we're fighting for the same fame, same shelf space, market share consumer. So naturally we're, you know, competitors, so to speak, but I think we both come at it With different approaches, different technologies, and we just got to stay true to ourselves. Honestly, Between the two of us, our market shares are still relatively small globally. There's so, so much potential for both brands to do incredibly well. Do we talk about, you know, beating them and performing better than them and staying ahead of them? Sure. You know, we do that with every brand we compete with, but I think there's just tremendous opportunity for new, fresh brands like Anand Hoka to take massive market share. And, you know, if you look at where Under Armour used to be, Adidas used to be really important. In running Nike. I mean, these are massive businesses that if you take 10% share, that's billions of dollars.

AI assessment note: “we just got to stay true to ourselves.”

Q Dave, what have been some of your biggest hiring mistakes? So like for me, as an example, I've often looked, especially as a young founder, looked at a great logo and gone, they must be brilliant. And actually they weren't a fit. What are some of your biggest hiring mistakes?

A You know, I think you get caught up in their experience versus their values. I think that's the biggest thing, and I've hired a few people over my course of my career that I was just influenced by others that really thought they were, you know, the best candidate, and I kind of went along with it, versus really, you know, putting my foot down and saying, hey, I just have a funny sense about this person, or these are red flags for me. I just need, and I've learned, I got to be firmer in my convictions and my beliefs about How this person is going to add or detract from our culture separately from, hey, they have the level of experience that we're looking for.

AI assessment note: “you get caught up in their experience versus their values.”

Q I ask you, again, it's a really interesting comparison to Hoka. Hoka, we offer great runners, well not great, but we offer like the hardcore runners, and we stay there, and we solve their problem. Ugg is not that, but as you said, there was a positional reshift in terms of focus, and the messaging to surfers didn't continue. How do you think about that when you compare the two?

A To me, Hoka is It's very polarizing from a, an aesthetic standpoint and a fashion standpoint. I've met very few people, if any, that have said they put it on and were disappointed. And at the end of the day, it comes down to how they feel and how they make you feel emotionally. That's what we've found in this, in our consumers is they love how it feels on their foot, but it also is, it's, And this is going to sound corny, but it's like a warm hug or it's like a, their cozy blanket when they put it on. They just feel completely relaxed and really at ease when they wear the brand. And so we've been able to tap into those two insights to build what we are now, a two billion dollar plus brand.

AI assessment note: “at the end of the day, it comes down to how they feel”

Q you're absolutely right. I mean, I think some of those technology founders have done very well from those acquisitions, and you applaud them. Can I ask, when you look at two such high growth brands in the portfolio, how do you trade off resources between each of them, given both of them probably being quite starved of resources just because they're growing so fast? How do you manage that trade-off?

A Yeah, that's one of the things that we, you know, have done, I think, really well over the past six or seven years is, Is focus our allocations and resources against those two brands. You know, when I came in to the CEO role in 2016, you know, we were, we were a company that kind of spread a little bit to everybody, right? So we had seven or eight brands. Hey, everybody, here's what you need each region. Here's money each channel. And what we've been able to do over the last five years is really focus our resources. You know, the good news is we have very healthy profit margins. You know, we're in 18 Percent operating profit.

AI assessment note: “focus our allocations and resources against those two brands”

Q I ask you, again, it's a really interesting comparison to Hoka. Hoka, we offer great runners, well not great, but we offer like the hardcore runners, and we stay there, and we solve their problem. Ugg is not that, but as you said, there was a positional reshift in terms of focus, and the messaging to surfers didn't continue. How do you think about that when you compare the two?

A To me, Hoka is It's very polarizing from a, an aesthetic standpoint and a fashion standpoint. I've met very few people, if any, that have said they put it on and were disappointed. And at the end of the day, it comes down to how they feel and how they make you feel emotionally. That's what we've found in this, in our consumers is they love how it feels on their foot, but it also is, it's, And this is going to sound corny, but it's like a warm hug or it's like a, their cozy blanket when they put it on. They just feel completely relaxed and really at ease when they wear the brand. And so we've been able to tap into those two insights to build what we are now, a two billion dollar plus brand.

AI assessment note: “To me, Hoka is It's very polarizing from a, an aesthetic standpoint”