What a difference five years can make.
In 2013, British powerhouse Kurt Geiger came charging into the U.S. with an aggressive strategy: to open dozens of flashy retail stores in key markets around the country. Like many other U.K.-based companies, it saw America as a lucrative opportunity but didn’t fully understand the complexities of operating in the market.
Real estate leases were costly, deliveries were problematic, and the product was too expensive for a brand that had little international recognition. A year later, the label closed shop and ventured back across the pond.
“We were a little naïve in the past and thought we could just turn up and open doors,” said CEO Neil Clifford. “We were driven a little bit by [then-owner] The Jones Group. We had to be quick, and we thought we could do it all from London. You can’t. You need people on the ground. Now it’s a different story for us.”
With the support of Cinven, its fourth private equity owner, Kurt Geiger will officially make its anticipated stateside return this week. The U.S. effort is just one part of a multipronged growth push at the company, which expects to rack up annual revenues of more than 370 million pounds ($485 million) by the end of 2018.
Watch on FN
While many footwear firms are putting on the brakes in a challenging retail climate, Kurt Geiger is carefully expanding its namesake label into new global markets and investing in burgeoning categories like bags and men’s. At the same time, it continues to nurture its luxury department store business, which has undergone a seismic shift with the explosion of the sneaker category. (High heels, by contrast, have become a harder sell.)
The changing landscape was top of mind for the company as it formulated its U.S. strategy. While Kurt Geiger previously targeted the market with sexy sky-high stilettos, it’s offering a much wider range of heel heights this time around. Price points are noticeably lower, too, with the sweet spot between $125 and $165. And bags account for 40 percent of the initial orders, proving that the company has opportunity beyond shoes.
The launch will include 100 key department stores and online destinations, including Nordstrom — Kurt Geiger’s largest partner during its previous stint in the U.S. — and Dillard’s, as well as Zappos.com.
Success won’t be easy during a particularly challenging time for retail, but the company is taking a distinctive approach to help it compete effectively in a fast-changing climate.
For one thing, it has no immediate plans to open stores. Instead, it aims to establish a sizable wholesale presence and is ramping up e-commerce and digital marketing. A showroom is open for business on lower Fifth Avenue in New York, and warehouses on both coasts are set up to facilitate deliveries. “We had to understand how to make the brand commercially viable, how to make the shoes better and price them properly,” said Steven Sousa, a former top Michael Kors exec, who joined Kurt Geiger as international director last year as part of a major talent push.
Michelle Ryan, who previously held roles at Jimmy Choo and Burberry, came on board as buying director, while Giuseppe Guillot, formerly of Yoox.com, is now overseeing sourcing and logistics. “When you get new talent, the too-difficult pile becomes smaller,” Clifford said. “We had a lot of things we needed to get done but didn’t have the bandwidth or experience to do them.”
While the beefed-up team has been working hard behind the scenes, it is determined to bring the brand to the forefront through a digitally focused global campaign — its biggest advertising effort to date. An eclectic group of British characters star in the ads, including veteran actress Joan Collins, eccentric designer Zandra Rhodes, models Alex Wek, Alice Dellal and Reece King, among others. (For more on Collins, see sidebar.)
“We wanted the message to be about inclusivity,” said Rebecca Farrar-Hockley, Kurt Geiger’s longtime chief creative officer. “Although everyone is British, we celebrated diversity, with people of all different skin colors and at every age. In fashion, there’s no age limit.”
As the brand works to build more awareness globally, the campaign will be a crucial part of connecting with consumers. Celebrity endorsements have also proved to be valuable, both in generating buzz and fueling sales. Last December, Meghan Markle paired Kurt Geiger’s black over-the-knee boots with a navy wool maxi coat and midi skirt for her first official royal engagement with Prince Harry in Nottingham, England.
“An item like [Markle’s boots], which retails for about $295, is [a great value for consumers]. It shows that we can produce good-quality product at a competitive price,” Clifford said.
Kendall Jenner has also given her stamp of approval to $195 white ankle boots from the brand (see opposite page). The model wore them about a dozen times last year, leading to a surge in demand and prompting them to sell out. “Kendall is, by far, the biggest millennial sales driver,” Ryan said.
While women’s has always been the priority, the brand is turning its attention to men’s, a category that has also taken off for the company’s luxury partners. “We’re pushing ourselves to have more fashion,” Clifford said, noting that the male shopper is particularly engaged in the label’s airport stores. “We owe it to ourselves to do a better job with men’s.”
The Luxury Retail Equation
Kurt Geiger’s most powerful weapon has always been its diverse business model, which has allowed the company to weather tough times more effectively than its competitors.
While its own brands have clearly become more important, Kurt Geiger continues to stand out as one of the most formidable high-end retail forces. (Its department store business with Harrods, Selfridges, Liberty and others accounts for 40 percent of overall revenues.)
“They’re fabulous at creating something unique for each of their destinations. Their biggest strength is the ability to see where the commercial successes lie,” said retail veteran David Walker-Smith, chief product and trading officer for House of Fraser.
At Selfridges, the company has been at the center of a dramatic shoe evolution. “Kurt Geiger shares our vision to make retail exciting again,” said Sebastian Manes, buying and merchandising director at the London-based department store. “They are always open to partnering with us and creating innovative concepts.”
The companies saw huge growth potential in the booming luxury sneaker market and teamed up on a 1,776-square-foot standalone space in the London flagship. Opened in February, it is positioned within the huge second-floor Shoe Galleries. There are more than 700 sneaker styles available for purchase — spread out over two sections.
“We started talking about that together three years ago. Our partnership is almost like a joint venture. [Kurt Geiger understands] how to manage a business,” Manes said.
Last month, the company also made a splash with the debut of its branded shop-in-shop on the Selfridges floor. Designed by London architect Jamie Fobert, it features a natural color palette detailed with dusty-pink and metallic-bronze accents.
Shoes, some of which are exclusive to Selfridges, are showcased on natural leaf forms that reflect the city’s green spaces.Next up: the unveiling of a new Manolo Blahnik boutique, which will occupy the former Christian Louboutin space in a prime corner location on the floor (Louboutin is relocating).
“It’s going to be a very different space than before and a new way of displaying [our shoes],” said Kristina Blahnik, CEO of Manolo Blahnik International. “Neil and Rebecca, and their team, have always been approachable and willing to think outside the box.”
Clifford and his execs are also working with Harrods to continually evolve its shoe business. He hinted that there is room for more growth within the Shoe Heaven women’s concept, and a men’s project is in the works as well.
“We are reinvesting and growing our space in both Selfridges and Harrods,” Clifford said, noting that digital expansion is one of the biggest opportunities for both stores.
Across the portfolio, Kurt Geiger continues to build its presence with shoe stalwarts like Blahnik and Gianvito Rossi, and ready-to-wear juggernauts such as Gucci, Balenciaga and Valentino.
But it’s equally passionate about finding the next big stars. Farrar-Hockley said one player that is rapidly rising in the department store business is Malone Souliers — which is attracting a diverse group of consumers who hail from many different countries.
“Kurt Geiger has consistently worked with us to develop intelligence on what works best for which consumer at each specific point of sale,” said Roy Luwolt, founder of Malone Souliers, who hinted that additional expansion plans with the retailer are in the pipeline. “This sits in line perfectly with the strategy of the brand — we don’t want to assume [what the customer wants]. We prefer to listen, learn and respond.”
The Road Ahead
Armed with valuable experience, Kurt Geiger is banking on a smoother ride in the U.S. market. But it’s also determined to play on the global stage and is eyeing the Middle East, Australia and Europe in a major way.
“Cinven has encouraged us to think bigger, and that’s a good thing,” Clifford said. Still, the company is careful not to “overburden itself with debt,” the CEO said, noting that the board owns a significant chunk of the company. The fickle economy and potential impact of Brexit will undoubtedly continue to create uncertainties for the brand. The weakening of the pound has benefited Kurt Geiger in the short term, but the company understands that change is inevitable.
“It’s about speed, innovation and agility,” Clifford said. “As we grow, we don’t want to lose our entrepreneurial spirit.”
