LaCrosse tells SNEWS why it put an end to recently acquired END Footwear
A poor economy, quality control issues and other cost concerns prompted LaCrosse Footwear to shut down END Footwear last week. The surprising move came just three months after LaCrosse purchased the fledgling brand.
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A poor economy, quality control issues and other cost concerns prompted LaCrosse Footwear to shut down END Footwear last week.
The surprising move came just three months after LaCrosse purchased the fledgling brand. Click here to read the May 11, 2009, SNEWS® story, “LaCrosse Footwear saves END Outdoor through acquisition.”
Officials from LaCrosse Footwear indicated in May that they intended to increase marketing efforts for END, and also use LaCrosse’s capabilities in IT, sourcing, quality and logistics to grow the END brand. But things didn’t work out as planned, Joe Schneider, president and CEO of LaCrosse Footwear, told SNEWS.
“When we purchased it, we underestimated what it would take to get it to being profitable,” said Schneider. He said that it didn’t make sense to go forward with END as a stand-alone company after LaCrosse “looked at what we were going to have to invest, what the return was going to be, and how long it was going to take to get that return.”
Schneider said that it was going to be difficult to build the END brand amidst the economic recession. “Retailers right now are gun-shy on taking risks,” he said.
Donald McLellan, former director of operations for END, told SNEWS that “most of the obstacles were economy based,” adding that retailers were hesitant to pioneer a new brand.
Schneider said there were also other problems with END, including concerns with its former factory. In particular, there were doubts that END could raise its manufacturing and product standards to the level required by LaCrosse. “To ensure consistent quality, we do certain things with our brands, and we were going to follow that process. And that was going to delay the launch of spring product,” said Schneider.
LaCrosse ran into other problems as well, but Schneider declined to go into detail. “There were certain things beyond our control,” he said. “I’m not sure it was one thing — there were several things.”
Schneider said that after he looked at all the obstacles, he questioned whether there was a better way to move forward with END. “One way is to just take the product and put it under the Danner brand,” he said.
According to Schneider, LaCrosse has not determined exactly which END products will be absorbed by Danner, though he said, “We’ll look at the ones that naturally extend to the Danner product line.”
Paul Curran, former head of media relations at END, said that Danner would most likely incorporate END designs that served hiking, trail running and some water sports. “Road running probably won’t be a major category,” said Curran.
Schneider said the former END product would be under the Danner name, and he is uncertain as to whether the END name will resurface.
He also said “it’s too early to tell” whether Danner will incorporate certain technologies employed by END, such as Ion Mask waterproofing. “We’re evaluating the product now,” said Schneider. “Some of the technology was leading edge, or let’s say not totally proven in certain conditions, and we’re a little bit concerned about that.”
When asked whether Danner would adopt END’s less-is-more approach to building shoes and getting the foot closer to the ground, Schneider said, “You bet.” While he noted that some products might need to be “beefed up a bit,” the basic concepts were good.
What’s less clear is how LaCrosse Footwear will go forward with the environmental philosophy END championed. Schneider said Danner would utilize eco-friendly processes “wherever practical and we can demonstrate and carry it out.” He emphasized that he did not want to make environmental claims and not actually back them up. “We also want to ensure that the quality is up to the levels the consumer is looking for,” he said.
Another question is how the termination of END will affect the efforts of LaCrosse to expand into lighter footwear and reach younger consumers — two of its main goals in purchasing END. “We still believe we need to expand our channels and customer base. We’re looking at the tradeoff of going under the Danner brand or building a whole new brand,” said Schneider. “I’m going to Japan next week because Danner is a very well-known brand over there, and we’ll be talking about which END product would be appropriate to put under Danner.”
Schneider added that an advantage of purchasing END is that LaCrosse now owns footwear designs intended for women. “Fifty percent of END sales were to women, and that’s not one of our strengths,” he said. “Now we have the women’s models, the women’s lasts and all of the development.”
When asked why LaCrosse was not willing to allow END, an up-and-coming brand with lots of buzz, to weather the recession, Schneider said: “We looked at the probability of it not being successful and disappointing the consumer, the retailer and others, and said let’s just lick our wounds now and move on. We didn’t want to take a lot of orders for spring, and then go to another factory, place orders, and a month and half from now cancel them. We’re a company that makes a commitment and we stand behind it.”
Schneider said that when LaCrosse purchased END, he thought the company could make it profitable, saying, “Otherwise, we would not have bought it. As time went on there were certain indicators that said, you know what, we have to look at this differently.”
SNEWS® View: As Schneider told us, END was struggling and “running out of runway” when LaCrosse purchased the company. The transaction happened quickly, and this apparently did not give LaCrosse time to discover all the problems it was inheriting. Fair enough. If LaCrosse hadn’t swooped in, the END brand may have not survived anyway. But considering that retailers and the media were fed quite a bit of sunshine about how END was going to gain a bunch of resources and support, only to be killed a few months later and only a week after Outdoor Retailer Summer Market was over is, well, curious at best.
LaCrosse purchased END to get a foothold in the light-and-fast footwear sector, but we suspect that this will now be more of an uphill climb, partly because retailers are going to question the company’s commitment to the category. Also, END had the potential to give LaCrosse a young, fresh face to present to the market, and the company cannot achieve the same thing by simply pulling some cool designs into the Danner brand. Danner simply has a more conservative image than END, and END was drastically different in the type of product it produced, its offbeat brand image and its fanaticism about treading lightly on the environment. We’re not sure the END branding message or energy will translate to Danner, or that as a result, Danner can become young.
Some people might argue that this is really just a case of natural selection, that END’s footwear concepts were not embraced by enough retailers (it was in about 105 doors), and sales weren’t growing quickly enough, so it met its inevitable fate. But we understand that outdoor specialty retailers were slowly catching on and the brand was beginning to get a little momentum in running specialty stores. We suspect that if END was making a go of it three years ago — and not in the middle of a recession — it would have had time to take root, and its products and eco-friendly philosophies would have flourished.
If there is one silver lining to this cloud, it’s that there seems to be little discord between END employees and LaCrosse. In fact, the folks from END we talked with said that they really like LaCrosse as an organization and hope to find positions within the company, and LaCrosse seems eager to make that happen.