Ugg Australia is broadening its footwear range to become truly trans-seasonal whilst transforming into a full lifestyle brand.
Gianni Georgiades Ugg EMEA managing director
“It’s all about the challenge.” That’s what drives Gianni Georgiades, Ugg’s managing director of EMEA. And his current challenge – spearheading the transformation of the iconic sheepskin footwear brand into a trans-seasonal, lifestyle and omnichannel business across the region – dominates his every move.
However, the 39-year-old, who joined in 2010 as EMEA brand director before becoming managing director for the UK and distributor markets in 2012 and rising to this role in April 2014, is the first to admit he’s “certainly not your stereotypical Ugg customer”.
Dressed head to toe in black, the former J Lindeberg and Harrods director says he owns five to six pairs of Ugg’s men’s boots – but he is quick to highlight that none of these are the classic sheepskin. He is leading the brand’s diversification across the region by updating the core classics and supplementing them with a more trend-led collection that can “convert someone like me and my wife [Harvey Nichols’ group fashion buying director Anita Barr]” to the brand.
Owned by US brand house Deckers since 1995 – but first launched in California in 1978 by Australian surfer Brian Smith and business partner Doug Jensen – Ugg has been gradually diversifying its range for the past few years, with its US-based design team introducing new styles such as women’s leather ankle boots, espadrilles and men’s desert boots. However, Georgiades believes this autumn will be the game-changer when the transformation will really take root.
For the first time in its 37-year history, Ugg has tweaked the silhouette of its classic boot, launching the Luxe range in September. Made in Italy, the range offers a slimmer profile and a more tailored take on the original (the Abree boot wholesales at £91.67). Launching on November 11 is the Slim range, which features additional cushioning and a Treadlite sole for extra traction (the Michelle short boot wholesales at £70.83).
Janie clog for spring 16
Georgiades explains: “The next generation [of Ugg fans] is asking us for more.
“What we’re looking for in the long term is an Ugg for all. Everybody loves the sensation and comfort, but aesthetically people wanted something different. It’s like denim: same wash, just choose your style. That’s really what we’re aiming to get to, especially for the next generation.”
He reveals that the classics currently represent around 35% of UK sales “and declining considerably, which is strategic”. His aim is to reduce this further to around 20% in the next four years by pushing more diverse seasonal and trend-led ranges while retaining the comfort USP that “dominates everything we do”. He says: “We don’t want to be a one-dimensional brand. We don’t want to be pigeonholed.”
He cites the men’s sneaker line for autumn 16 as an example, where some will feature the brand’s Treadlite sole and have the outer upper covered in shearling, which is “trend-right but appropriate to the line”. Another key line launching for spring 16 is clogs, meeting the ongoing 1970s trend with styles such as the Janie, wholesaling at £54.17. Wholesale prices across the entire footwear collection range from £27 for slippers to £135 for women’s leather boots.
“The classic Ugg is always there,” he says. “Every year, the customer will come back and buy a boot that they love, so we have already got them in the door. It’s about offering that person more in terms of brand experience, rather than just going for the classic. If you look at our store, classic is at the back as we want people to walk through and see what we have. They are absolutely coming in for other product, but it’s been an education.”
He admits that women’s is further ahead in this process as men’s is still “going through a search process to decide exactly who we are”. It currently represents just 5% of UK sales.
“The guy is battling with the image of the classic boot – it’s not a secret. For a guy, it’s a tough one. If you think of Ugg for women’s, it’s comfy and fluffy, but for a guy there has to be a certain level of aggressiveness in the footwear; there has to be tech.”
Gianni Georgiades Ugg EMEA managing director
Derrick Hoyle, buying controller at one of Ugg’s key accounts Soletrader, agrees that the brand still needs to “crack the men’s market” by concentrating on classic styles like biker boots in good leather with the typical Ugg comfort. He also notes there is opportunity for growth in luxury trainers, where Ugg “haven’t been ambitious and luxury enough” yet.
Despite this, Hoyle says: “We have been working with Ugg for more than 10 years, and autumn 14 was a breakthrough on their trend-led product. This year, everyone has placed better orders on that product and it’s flying. Ugg’s trend-led product is up more than 50% year on year for us so far this season.
“Before, it was a three-months-of-the-year brand so it was difficult to buy as you could have problems if it was a warm winter. By extending the product, they have extended the brand to an eight-month selling window, which is healthier for them and us. They are no longer a weather-dependent risk. Gianni has been leading the team on this; he deserves a lot of credit.”
John Lewis women’s footwear buyer Diane Knight says: “Ugg is a big brand for John Lewis in the autumn.” She goes on to say she is “very pleased they are bringing in more fashion as it is good to constantly update a brand and entice new customers to buy into it”.
Meanwhile, David Spencer, Schuh’s head of buying and marketing, describes the diversification of their collections and amended product flow as “very welcome”.
“The amended strategy on deliveries with more thought given to the actual product and when it might land should help to mitigate the impact of the weather too, with more transitional styles for the early autumn period and the heavier winter product not due until later in the season when the customer is ready for it. We are very pleased with the performance of the brand, with early indications that the amended product strategies are working as we experience growth against last year.”
And the latest figures support this positive trajectory. In the year to March 31 2015, Ugg made just under $1.5bn (£970m) of sales globally, up 15% from just under $1.3bn (£840m) on December 31 2013. The UK comprised around 32% of total EMEA sales.
Wholesale is the largest element, representing $904m (£585m) of global sales compared to $380m (£246m) from retail and $210m (£136m) from ecommerce. The brand has 13,000 doors worldwide, of which around 1,000 are in the UK. However, it does not plan to increase this, rather to ensure it is with the best partners possible.
To further boost sales, Ugg is expanding into new categories, including a home collection this autumn. This comprises sheepskin rugs retailing at £835, a mohair throw for £130 and a wool Luxe Lodge pillow for £178. It is being sold in Ugg stores, online and through Fenwick.
The brand already offers loungewear, featuring dressing gowns, onesies and cosy trousers, but Georgiades dreams of going further with clothing – he wants Ugg to expand into outerwear: “I would love for us to be doing that. I’m thinking shearling jackets, leather jackets, all things that fit naturally with our brand. We have to make sure it’s a global line and that it works for the region, but absolutely for us it’s that next big evolutionary stage of ‘What else do we need?’ Outerwear could be a very big win.”
He’s unable to put a timeframe on the move, but reveals his future passion is to open a full Ugg lifestyle store to showcase its growing offer.
“I would love to see a full lifestyle store – to have home, outwear, loungewear, footwear, kids,” he says, adding that this wouldn’t necessarily open in the US first but could debut in the UK when the customer is ready.
As the men’s collection continues to grow, Georgiades also sees potential for UK standalone men’s stores, as seen in the US with the Madison Avenue store in New York, which is adjacent to the women’s. Men’s currently comprises 10% of Ugg’s global sales.
“We’ve found a formula on women’s that works; we’re starting to find a formula on men’s that works, so there’s no reason if we reach a certain critical mass that we wouldn’t go down that route,” he admits.
Ugg flagship on Glasshouse Street London
More UK stores are also on the cards in the next few years, but Georgiades is unable to reveal specific locations, simply saying: “There are probably one or two cities in the UK that could benefit from having an Ugg retail store.” It currently trades from 11 UK stores.
He does, however, disclose that the ongoing Liverpool One shopping centre pop-up, opened in August, will become permanent if it continues to perform well.
Across EMEA there is greater scope for expansion. Georgiades is close to agreeing a partnership to open Middle Eastern stores, a move which is buoyed by the brand’s growing spring/summer collections but also the region’s preference for marble floors and air con, making the classic boots a popular choice.
He cannot reveal specific territories or how many stores will be opened, saying only: “It’s pretty aggressive. It’s the fastest growing territory in the world; to ignore it would be silly. There are a lot of places in the Middle East where we want a presence, whether it’s Dubai, Riyadh or Kuwait.”
South Africa is also on the hit list for future stores, as is Germany; last year Ugg bought back the German business, transforming it from a distributor to a subsidiary to boost exposure there. The country currently has no Ugg stores and the focus will be on opening in cities including Berlin, Munich and Düsseldorf.
To support this growth, protect against rising production costs and improve the brand’s speed to market, Georgiades is investigating near-shoring of production. Most of Ugg’s ranges are currently produced in China or South America, but he says: “It’s very clear for us that, globally, people have suffered with foreign exchange rates. Costs in China are going up and costs for materials are going up, so we’re looking at opportunities. Whether in Turkey, Portugal or Italy, it really is about mitigating all those effects and speed to market.
“We’re looking to start with a capsule for next winter, enough to make mistakes and recover,” he says, indicating that this could extend to “thousands of pairs”.
Georgiades also divulges that Ugg is now working closely with its key UK retailers to trial a new omnichannel approach, called Infinite Ugg. This will see its branded technology, such as iPads or interactive screens, go into partner stores so shoppers can access the label’s full range.
He explains: “Our partners only really have a certain open-to-buy [financial budget for retail merchandise], so why limit the consumer to just what they’ve purchased? That’s something that we will be launching next year and we’re in talks with a couple of key partners for next winter to trial it. If you want to talk omnichannel, that really will connect all the channels.”
The brand also launched a click-and-reserve trial in September at its Westfield London, Covent Garden and Birmingham stores, which it hopes to roll out in the next six months.
For Georgiades and the Ugg brand, the future direction is clear: it’s about evolution, whether that’s in omnichannel, production or in its lifestyle and trans-seasonal collections. UK retailers and customers alike are already responding positively to this new direction and Georgiades is determined to keep improving on this momentum.