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Smith decided he wanted to bring the shoe to America and wrote a business plan. He secured $20,000 from investors to create a couple thousand prototypes and execute a marketing strategy. He took his footwear to small surf shops in San Diego, Santa Monica, and Orange County, and while local surfers praised the shoes, he was barely able to move any inventory.
"It took us several years to get rid of that first 2,000 pairs," Smith told the San Diego Daily Transcript. "[Buyers] didn't even understand what the product was. They didn't even perceive it as footwear."
Smith continued to serve his surfer clientele, achieving modest annual sales of $30,000 by 1984; he took side jobs to pay his bills while he pursued the business. The booties, known in Australia by the generic term "uggs," eventually caught on in the sports world. Smith began to push the shoes in the ski sector, attending trade shows like the annual Action Sports Convention. The footwear became a category favorite, but still remained a niche product, only sold at surf shops and sporting good stores.
In 1986, a year after Smith officially trademarked the Ugg name in the US (it remains untrademarked in Australia, where ugg is still the name of a general style), he released a campaign featuring the boots worn by a casually-dressed couple. Suddenly Ugg spread across the country — the brand shifted away from its heavy California presence to have representation in Colorado, Minnesota, Illinois, New York, and New Jersey. Sales increased tenfold, and by 1993, Smith was shipping 3,000 pairs of boots a day.
Now, 3,000 pairs is a mere drop in the bucket for Ugg. Unlike other of-the-moment footwear brands that come and go, Ugg has far surpassed all expectations it would be a fleeting trend. In January, Vogue declared that Ugg was "returning," but the brand never actually went anywhere: it's maintained a steady retail presence for years. Ugg's sales have only climbed in the last quarter-century. The $1.3 billion brand is, and has always been, here to stay.
It's universally understood that Ugg boots are not attractive shoes.
"The shoes are engineered for comfort. While men had a million different types of shoes that were comfortable, women didn't."
"There's nothing to this design that would accentuate your legs, or show off your dainty feet," a 2011 post on The Gloss rants. "There's nothing to the design that would make you stand up straighter or accentuate your bottom (high heels do this). There's in fact nothing to indicate that you don't have square, hideous shoe boxes in place of human feet."
"Unfortunately, Ugg boots are not sexy," the Independent quipped in 2003. "Unless you're Mrs. Bigfoot on a lone mission across Antarctica to find Mr. Bigfoot, that is."
But that doesn't matter. Ugg found commercial success because of its unprecedented comfort level.
"Women love the shoe, but it's certainly not because it elevates their feet stylistically," says footwear expert Meghan Cleary. "The shoes are engineered for comfort. While men had a million different types of shoes that were comfortable, women didn't. There was nothing out there that was easy, comfortable, and had a universal style."
The tipping point for the brand came in 1994, when the US Olympic team wore Ugg boots during the opening ceremony in Lillehammer, Norway. According to Adheer Bahulkar, a retail strategist at management consulting firm A.T. Kearney, this gave Ugg a huge boost in sales and name recognition.
"Shoppers scrambled to buy the boots after seeing them on the Olympic team, and the brand saw double-digit growth," he explains. A year later, Smith would sell his brand to Deckers Outdoor Corporation, the same company that owns Teva, for $14.6 million.
It wasn't long before Ugg enjoyed some celebrity cachet. Pamela Anderson paired the boots with skimpy swimsuits on Baywatch. Sting wore a pair on the cover of an EP, as did Melrose Place star Heather Locklear on the cover of InStyle. Oprah put Uggs on her "Favorite Things" list in 2000, and then again in 2003 when Deckers offered the boots in pastel colors, placing the brand on the brink of explosion. That year, net sales doubled from $121 million to $214 million, and Footwear News declared Ugg the "Brand of the Year."
The boots began to surface online for triple the listed price and were spotted on the feet of every It girl, from Kirsten Dunst to Paris Hilton to Jessica Simpson. Even Vogue editor André Leon Talley admitted to wearing the boots "for years." In 2009, while the rest of the American retail market was knee-deep in an economic crisis that was halting the purchases of many shoppers, Deckers saw its strongest year yet with sales amounting to a whopping $718 million. It's since opened Ugg stores in Japan, China, England, and France, and today boasts 140 doors worldwide.
"The boots began to surface online for triple the listed price and were spotted on the feet of every It girl, from Kirsten Dunst to Paris Hilton to Jessica Simpson."
Throughout the brand's continued rise, critics have rooted for Ugg to fail. When Deckers did experience a 30 percent dip in revenue due to a lack of Ugg sales in 2012, the Guardian ran the headline "Ugg boots are over — the fashion world rejoices." But, as Cleary puts it, "Ugg is a brand that is never going to die." Sales jumped right back up.
In Deckers' most recent annual report, CEO Angel Martinez wrote, "In fiscal 2015, we grew sales nearly 15% to a record $1.8 billion highlighted by double digit growth ... The Ugg brand is one of the most iconic and recognized brands in the global footwear industry and highlights the Company's successful track record."
Part of the reason Ugg has had such a long shelf life is its versatility. While its classic boot is the brand's "bread and butter," says retail and fashion consultant Lockie Andrews, the brand has still been able to gain the trust of shoppers and move other styles. Ugg makes shoes for every season; Andrews notes that items like the brand's summer sandals have been runaway hits.
The brand has also figured out how to keep shoppers interested in its hero product, offering that now-ubiquitous classic boot in countless variations. On a recent visit to one of the brand's four New York City locations, tourists beelined to the boot when they entered the store, never mind that it was unseasonably warm outside. Many were interested in updated editions that incorporate fringe, bows, rhinestones, buckles, and shagged fur, in addition to a lighter, less clunky version of the boot called the classic luxe.
"These are pretty exciting because you can change it up, but still wear your favorite boot," teenage shopper Jaymie enthused. "I would buy every one of these if I could."
Ugg also sells accessories like handbags and earmuffs, in addition to boot styles that recall favorites from Sorel and Hunter. It even offers heeled boots made of high-quality Italian leather.
"All great brands have to evolve over time to figure out how to stay relevant," says Andrews. "Obviously Ugg has to offer other product assortments to leverage its brand equity before it tries to find sales through completely new categories. The difference is, unlike other brands that chase trends, Ugg brings its quality and personality to every shoe it creates and that's why it performs so well. That's why we're still seeing a velvet rope with a line wrapped around the corner at its New York City stores. It utilizes its brand commercialization and it wins. "
"Shoppers actually see them as high-end because they are situated near brands that shoppers talk about, season after season."
In addition, its positioning in the luxury category has helped, says Angela Velasquez, a trend analyst and editorial director of footwear publication Vamp. Yes, luxury. When Deckers acquired the brand from Smith, it moved Ugg away from its sporty roots, inking partnerships with retailers like Nordstrom and Neiman Marcus. Today its shoes are placed on shelves inches away from brands like Prada.
"Ugg has a big presence in department stores, but not just any department store," Velasquez notes. "Shoppers actually see them as high-end because they are situated near brands that shoppers talk about, season after season."
Dave Powers, the current president of Ugg, says the brand works hard to maintain the perception of luxury by being extremely selective with its retail partners. "Not just anyone can sell the Ugg brand," he says. "We're pretty strict about who we allow to sell our product. The pricing, the placement, the distribution is all strategic. We've had key, independent accounts over the years, which is why you might see kiosk stores in New York City selling Ugg boots, but mostly we sell in boutiques and high-end department stores."
Despite its strong presence in the footwear segment, Ugg has its heart set on becoming an all-around lifestyle brand.
"We are more than people think we are," says Powers. "Our biggest hurdle is making sure that people consider us that way, as opposed to just being known for the classic boot."
Two years ago, Ugg expanded into home goods, introducing pillows, throw blankets, poufs, rugs, and robes. While Powers admits the category "isn't a major volume driver right now," the brand hopes these newer products will help shoppers turn to it for more than just shoes. Leah Larson, Ugg's creative director, says it will be rolling out additional items over the next two years. She adds that Ugg won't be chasing specific trends, but will instead try to become "the go-to for coziness because comfort never goes out of style."
Powers says Ugg is also working to offer outerwear by 2017. The brand has previously released winter coats through licensing partners, but Ugg is now designing coats with an in-house team in a play to lead the market.
"When consumers think of Ugg, they already consider us an outerwear company," he says. "There's so much opportunity now in that category, so over the next two years, we will be going back at it with a more focused, concerted approach on key outerwear items that will set us ahead."
Aside from battling the big, bad world of counterfeiting — Ugg has taken legal action against some 60,000 sites selling Ugg knockoffs, even developing unique QR codes for every product so customers can confirm their authenticity — the brand's biggest challenge is making more of a dent in the men's market.
"We're really trying to get it out there that we are a men's brand," says Larson. "We see this as an opportunity because there are people out there who don't even know we make men's products!"
Like Lululemon, Velasquez says "Ugg's strong roots in women's footwear scare male customers away." Even with a celebrity ambassador like Tom Brady, who's been representing the brand since 2011, menswear only makes up 30 percent of the Ugg business.
"We see this as an opportunity because there are people out there who don't even know we make men's products!"
"Twenty-five percent of women have a pair of Ugg boots in their closet — that's an amazing statistic," says Andrews. "But of those women, most don't go for a second pair, so it only makes sense for Ugg to go after the men's market. They need that sector."
Part of the strategy to court male shoppers involves Treadlite, a shoe sole technology Ugg launched in February. The brand is adding this light, durable bottom to many of its existing styles, with the hope that male shoppers will seek out Treadlite's comfort and durability. Earlier this month, the brand debuted a campaign centered specifically on the technology.
"We're building the business with our Treadlite products in order to develop a long-term platform," says Powers. "We've had some quick wins, wins in certain styles — we have slippers and boots that are popular sellers. But we need to round out other categories and become famous for those. It's pretty predictable. We just need to create the same footing with loafers, chukkas, and Oxfords."
While Ugg's men's business might not ever grow to the size of its women's, experts like Cleary believe the rise of categories like athleisure will help Ugg continue to stay on top as a best-selling brand. Randal Konik, an analyst with global investment banking firm Jefferies, estimates that Ugg's presence in the menswear market will double over the next three to five years.
"Ugg's longevity doesn't come from a fashion moment. It's seeped in a tradition of product expertise, and that's helped them leverage their brand equity across all categories," says Andrew. "Ugg has a rare staying power. They hold a place in the shoe market that no one else seems to come near."
Editor: Julia Rubin