To reach $1 billion revenue goal, HOKA opens pop-ups in NYC and L.A.
The footwear brand is betting big on retail with two pop-up locations in New York and Los Angeles that should smooth the path to its ambitious revenue goal.
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Last May, the leadership team at Deckers Outdoor Corp. outlined an ambitious sales goal for its booming footwear asset HOKA ONE ONE. The company’s CEO, Dave Powers, said Deckers was targeting $1 billion in annual revenue for the brand.
That would be quite the achievement for a shoemaker that was founded in 2009, acquired by publicly traded Deckers in 2013, and had spent the past decade somewhat in the shadows of the parent company’s flagship asset, lifestyle brand UGG.
Based on recent sales growth, however, it was only a matter of time before HOKA outpaced its portfolio mate in terms of revenue. And in August, on the fiscal first-quarter earnings call, Powers announced that HOKA indeed surpassed UGG after the brand’s sales surged 95.5 percent to $213.1 million.
What’s more, he added, the brand accomplished this with balance across regions and channels. HOKA’s wholesale sales growth was 114 percent while DTC sales grew 91 percent.
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“This quarter represented a significant milestone for Deckers and HOKA as the brand’s revenue slightly surpassed that of UGG for the first time in the company’s history,” Powers said. “As has become standard for HOKA, growth was balanced across the brand’s ecosystem of access points with all regions and channels of distribution experiencing impressive growth.”
Based on the latest news out of the brand’s Goleta, Calif., headquarters, HOKA is now poised for even greater heights.
On Wednesday, the brand debuted two pop-up retail shops in New York and Los Angeles, helping it “welcome consumers from all walks of life to experience the brand up close and personal this fall.”
The brick-and-mortar move was designed to increase HOKA’s traction with consumers and introduce the brand’s signature style of a cushy outsole to a new generation of runners, walkers, and hikers. What’s more, it should bolster HOKA’s omnichannel prowess as it strides toward $1 billion.
“HOKA has engaged its base via direct-to-consumer as well as other wholesale channels for 11 years and running,” the company said. “This is the official introduction of the first 360-degree HOKA retail experience. Inviting total immersion, the pop-ups boast secure 3D foot scanning devices by Volumental, providing unparalleled insight into fit and comfort while intuitively suggesting individual styles.
“The experience is complete with smart lockers, enabling customers to start the day for a run or enjoy the store hands-free. Customers will also purchase exclusive apparel (which has only been available on HOKA.com until now) in person. Additional experiential programming will translate the look, feel, and culture of HOKA like never before.”
The goal for the pop-ups, the company added, is to “incite a two-way conversation with customers, maximizing the opportunity to interact with the product, learn about it in a physical setting, and ultimately embrace its benefits before purchase.”
These pop-up retail outlets appear to be on-brand for HOKA, which “continues to build its consumer base through a combination of disruptive product innovation, emotionally connected inclusive marketing, and a consistent consumer experience based on the premium quality of the brand’s products and distribution partners,” Powers said.
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Jonathan Komp, an analyst with Baird, is among those who are bullish on the brand. He wrote in a note to investors that HOKA saw “strong growth in new customers (+72 percent increase in site traffic) and repeat customers (2X+ purchasers grew +46 percent), and the June Clifton 8 launch was well-received (features new mid-sole foam; already a top 5 style on HOKA.com). Looking ahead, Decker’s now sees Fiscal 2022 (estimated) revenue of $850M (+50 percent) and outlined significant multi-year whitespace across categories, channels, and geographies especially with current awareness among runners only in the mid-20 percent.”
Will these retail pop-ups help HOKA pick up the pace with consumers? The brand believes they will not only help drive new business but also give HOKA key “consumer data insights and data trends to inform how the company navigates the retail landscape moving forward.”
“We have been encouraged by the loyalty of consumers who buy online,” Powers said. “During Q1, the number of consumers who purchased HOKA two more times increased 46 percent versus the prior year. Through these repeat purchases, HOKA is expanding closet share with existing consumers as the brand is seeing adoption across multiple categories. To help achieve this goal, the HOKA team is building innovative products in trail, hike, and fitness categories. We are focused on our long-term strategies to increase consumer awareness and adoption of the HOKA brand to build a multibillion-dollar global performance brand over time.”