Stepping Out in New, Successful Direction : Shoes: Robert Greenberg, founder of L. A. Gear, has launched a company that’s building sales from the popularity of trendy ‘Doc’ Martens.
Two years ago, Robert Greenberg was forced out of L.A. Gear, the company he founded and built to nearly $1 billion of sales in the ‘80s, notable for its trendy footwear for women, including rhinestone-trimmed sneakers.
Now Greenberg is back in the shoe business. And this time he is riding a ‘90s trend.
Greenberg’s new company, Skechers USA Inc., based in Manhattan Beach, is one of only two U. S. distributors of the clunky but popular Dr. (Doc) Martens work boots and shoes made in Britain of stiff leather and air-cushioned soles and priced from $90 to $134.
Greenberg is also making several other similar lines of “sport utility footwear”--including work boots and shoes with Skechers’ own brand--for men, women and children and sold by mainstream retailers such as Footlocker, Nordstrom and Macy’s.
A “skecher,” in hip teen-ager lingo, is someone who is antsy and can’t sit still. It is an apt description of Greenberg, a wiry 53, who divides his time between a home in Hidden Hills and another in Manhattan Beach.
Skechers is growing very quickly. Greenberg expects its first-year sales to hit $40 million, with about a 10% profit. He is already thinking about taking the company public with a stock offering early next year, and boasts that Skechers’ sales for all of 1994 could top $100 million.
At L. A. Gear, “I was just on my learning curve,” Greenberg said with a teasing grin.
Skechers has 30 sales representatives around the country and has just formed an international division. A marketing blitz is under way that includes ads on MTV that will run through the holidays.
During an interview in the company’s shoe-filled “war room,” Greenberg tries on a dozen different styles as he talks animatedly, jumping up to test out the feel of each oxford or boot and evaluate the “look” from all angles.
“My forte is spotting trends” and coming up with marketing ideas, Greenberg said. “I’m a product strategist.” His latest innovation: a Skechers’ brand work boot with a hole exposing the steel toe underneath called the “chrome dome.” Grunge-look torn jeans gave Greenberg the idea for the boots, which have been a hit with teen-age and preteen boys this fall.
“The thing that continues to strike me most about Greenberg is that he seems driven,” said Donna HeiderstadtQ, editor of Footwear News, a New York-based trade magazine. “He loves developing something and having it be a success.”
But after L. A. Gear, she said, “he has something to re-prove. I think it’s an ego thing.”
These days, the mustache Greenberg sported when he headed L. A. Gear is gone, along with his intense dislike for having his picture taken. That phobia was once so strong that Greenberg sued American Airlines for running an unauthorized picture of him in its in-flight magazine.
Greenberg also insists that he has mellowed. Son Michael, 30, formerly L. A. Gear’s national sales manager, is president of Skechers. Two other sons--Jeff, 25, and Josh, 20--are also involved.
But Greenberg is chairman and chief executive. “All I want is to build a nice, family business,” he said. “I plan to stay out of trouble this time.”
L. A. Gear got off to a fast start and its stock price, which bounced between $2 and $6 a share in 1986, climbed as high as $50 a share in 1990 (adjusted for splits), before sinking under $10 in 1991. L. A. Gear lost its footing when the company failed to adapt to changes in fashion, and Greenberg expanded into “performance” athletic shoes, as well as apparel. In 1991, annual sales plunged 25%, to $618 million, resulting in a $45-million loss, contrasted with earnings of $31.3 million in 1990.
Then in September, 1991, Roy E. Disney’s Trefoil Capital Investors of Burbank spent $100 million for a 34% stake in the company. Greenberg was forced out four months later. Disney’s point man, Stanley P. Gold, remains chairman and chief executive.
Earlier this month, L. A. Gear reported a $7.2-million profit on sales of $143 million for the third quarter that ended Aug. 31--its first quarterly profit since the third quarter of 1990 and the change in top management.
After he left L. A. Gear, Greenberg took about six months off to relax. But the Boston-born entrepreneur is used to work. He started working in his father’s fruit store at age 10, later became a hairdresser and first got into the rag trade in the 1970s by selling blue jeans and, later, E. T. shoe laces.
He soon started itching to build yet another company. Several other key people who surrounded him at L. A. Gear besides his son Michael are working for him again.
Said Michael: “We wanted to get back in the shoe business. It was a business we understood, and we have lots of friends in the industry. So, here we go again.”
Skechers recently signed a licensing agreement to design, manufacture and market men’s and boys’ shoes and boots for the L. A.-based “urban street wear” company, Threads 4 Life Inc. Skechers’ suede and leather sneakers will be sold under Threads 4 Life’s “Cross Colours” brand. Greenberg will make a pricier line of footwear named after Threads 4 Life designer Karl Kani.
“Now, everybody’s asking when Skechers is going to go public,” the elder Greenberg said. With L. A. Gear, “we gave investors a pretty good ride. There was plenty of time to get on and get off with a nice profit by selling their stock. As Joseph Kennedy once said, only a fool stays in looking for the top.”
