Working model Hoka to open first retail shops in New York Metropolis and LA

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Hoka’s sales recently surpassed sister brand Ugg for the first time in Deckers history.

Source: Hoka

Sneaker brand Hoka, famous for its cushioned running shoes, is opening its first retail locations on Wednesday as it relies on brick and mortar to fuel parent company Deckers’ growth.

Hoka President Wendy Yang told CNBC that the shoe maker will open its doors to shoppers at a location on 5th Avenue in New York’s Flatiron neighborhood and a store on Melrose Avenue in West Hollywood, California.

The brand has signed shorter leases for the two stores, Yang said, but will likely try to extend the deals.

“We want to learn more directly from the consumer … about what they like, what they want and how their decision-making process works, in one-on-one meetings,” said Yang. “The greatest thing is to have a face-to-face conversation with consumers and let them experience the benefits [of Hoka] before the purchase.”

The stores offer 3D foot scanning devices to help with sizing. There are also lockers where customers can store their belongings and test shoes by walking around the area.

Hoka’s investments are part of a larger direct-to-consumer push in the footwear industry as brands from Nike to New Balance to On Running to Allbirds get closer to their customers. Nike, for example, is pulling out of unsuccessful wholesale channels and spending more to revamp its stores and website. On Running opened its first store in New York’s SoHo neighborhood in December, expanding its distribution beyond department stores and running specialty stores where customers can find its sneakers.

In the past year and a half, the running shoe business has outperformed other types of athletic shoes in particular, according to Matt Powell, senior industry advisor for the NPD Group. With more dollars pouring into the category, brands like Under Armor and Puma pay more attention to running than before. Allbirds presented a running shoe in April 2020, another vote of confidence in space.

“Up until the pandemic, running wasn’t very good for about eight years,” Powell said. “But there is no question that more people are running. Whenever we have been unemployed in times with many people, we always see running shoes or running as an activity.”

Hoka’s latest financial results demonstrate the shift. While the brand also sells walking shoes and sandals, it is known for its extensive range of running shoes. Hoka’s revenue increased 95% for the three-month period ended June 30 to $ 213.1 million from $ 109 million a year ago. (Deckers revenue increased 78% to $ 504.7 million over the same period.)

Hoka’s sales also impressively outperformed sister brand Ugg for the first time in Deckers history, the company said when it released its first quarter results.

“Five or six years ago, the only people who bought Hoka were the runners who knew,” Yang said. “You were the first to try this crazy new shoe. But now you don’t.”

According to Powell, younger consumers are also increasingly buying running shoes as streetwear, not necessarily for running. And that should keep the category growing in the coming quarters, he said.

Sales of performance running shoes in the US increased by about a third in the first half of the year, according to the NPD Group. Hoka’s sales rose about 90% while On Running’s sales tripled, the research firm said.

Deckers’ stocks are up about 47% since the start of the year. The company has a market value of $ 11.7 billion.