By SARA GERMANO
Robert Greenberg doesn't do things halfheartedly. For 20 years, the Skechers (SKX)
Greenberg's latest full-speed project is leading Skechers headfirst into the huge running-shoe market, an area dominated by the well-heeled Nike and Adidas. He's hired America's top marathon runner, Meb Keflezighi, to wear Skechers during his race at the Olympics. Greenberg says his company can make shoes that are similar in quality to the big brands' and can sell them at lower prices; the technology evolved from research Skechers did when developing Shape-ups. "Our marketing is lighthearted and fun, but this is a serious product," he says, exuding the frenetic energy of a start-up entrepreneur.
Some analysts, however, are skeptical. While Greenberg hopes the running shoes can make up half the firm's sales ($1.6 billion in 2011) within three years, Wedbush Securities' Corinna Freedman isn't confident that its running shoes are taking off. The firm's track record -- it often makes a huge profit one year, then falters the next -- also raises some analyst eyebrows.
Greenberg, 72, makes no apologies. Worldwide, everyone wears athletic shoes, he says, and people want American brands. In Skechers' Manhattan Beach, Calif., headquarters, Greenberg recently took SmartMoney through the showrooms, pointing out glittery shoes that have a built-in spinning wheel ("You can turn like a ballerina," he says) and new pairs of running models. The Boston native talked about why there's room for another athletic-shoe brand and how much longer he plans to stay in what he calls "the hardest business in the world."
Who is the Skechers customer?
Thirty percent of our business is just children -- if I could do one thing for the rest of my life, it would be to make little girls shoes. I love it. But the Skechers customer is the whole family. I'm always looking at what people wear. It's hard for me to look above a knee when I see people. When I go to a ball game, I get an aisle seat and check out 80 people who are walking by.
Why did you get into the performance-shoe business? Didn't you try this when you ran LA Gear?
LA Gear was the lightweight version of an athletic-shoe company. Now I'm trying to be a heavyweight. We sell 70 million pairs of shoes a year, so we have some fans. It's not going to be that we took down Nike or Adidas, but we want a piece of the performance business. To grow [revenue] beyond $1.6 billion, we need to be in that market.
How will the Shape-ups experience change how you market shoes?
Everything changes you all the time. Now I understand more about how the government works. We as a company believe we did nothing wrong. We simply duplicated what a company called MBT did. The height of Shape-ups was the most money we ever made in a year. Unfortunately, the cost and time it would have taken to prove ourselves right would have been more than double the cost of settling with the government.
And now you have a lot of unsold Shape-ups ?
The inventory [surplus] was from the crash and burn that happened afterward -- there was twice as much product in the marketplace as needed. A lot of companies were making versions of that shoe, and the retailers bought too many of them.
You're not a chief sponsor of the Olympics, so why endorse Olympian Meb Keflezighi?
Meb was presented to us by an agency. It turned out really well. He came in and worked with our guys on performance shoes for a few months and helped let us know what to do a little better.
What will be the next big trend?
The Ugg thing is getting tired; there has to be a break. The whole goal is finding what customers don't already have in their closet. What will be popular for fall are hidden-wedge shoes for women. Colorful footwear is also happening, so we're making lots of colored mesh sneakers. If you buy one fuchsia shoe, how many things can you wear with it? You have to buy the other colors.
You're 72. How long do you see yourself in this business?
The shoe business is the hardest in the world. There's nothing you wear that fits like a shoe. If you put a dress on that doesn't fit, you can take it in. But shoes have to be the right size, length and shape. I made enough money to retire at 40, and I'm still not retired. As long as I'm healthy, I don't want to miss any of the action.