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K-Swiss Inc. (KSWS) Message Board

  • becarefulwhatyoupay becarefulwhatyoupay Oct 25, 2012 5:49 PM Flag

    where K-Swiss management failed

    Nearly 30 years ago Steve Nichols did a good job buying K-Swiss for a fair price and then expanding the brand beyond its small So. Cal tennis market niche. along the way K-Swiss name caught fire as an inner city trendy brand and the ompany at one time enjoyed a high market cap and multi hundred million dollar cash reserves.
    Where K-Swiss management subsequently failed is in not building nw brand names, such as Royal Elastics and Palladium. These two brand names had serious sales growth potential and could have not only saved the company, but made it grow.
    Instead of growing new brands, K-Swiss management tried to push the K-Swiss name into running shoes and push the k-Swiss "classic" style court shoes. this was a waste of money because the K-Swiss brand name has no authenticity or credibility outside of the small niche performance tennis market.
    Both Royal Elastics and Palladium could have been huge growth brands for K-Swiss company,but the Nichols' were unwilling to invest money and resourcesto build those brand lines and advertise them
    They felt "safer" supporting K-Swiss brand name, but it's not that good a name, and certainly not a versatile name to go outside of the classic core performance tennis shoe category.

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    • You are being kind. For the first ten years as the new owner, Nichol's was able to ride the wave the Brunner's created with the Classic. That momentum was reinforced by a series of great designs and constructions created by a fellow named David Hill; most notably the Si-18 concept and series. Nichols made a huge mistake by replacing Hill with a series of inept sourcing managers. One in particular from India totally screwed up everything by moving production to lower-cost factories and suppliers. In the process, the Classic was changed and lost all of its original style and character. With the loss of the "real" Classic, the sales team was lost and spent the next five years selling crap line after crap line on a hope and a prayer. By 2005, retailers across the country started giving up on the brand and Nichol's was getting desperate. By 2007, Nichol's dropped all pretense of being a performance brand and began emulating Skechers. Thinking a younger leader would do a better job of relating to the new youth market, he appointed his highly inept son, David, to call the shots. The company has been a mess ever since. Everything David has been responsible for has turned to crap, starting with NatGeo, then Royal Elastics, Gwen Stefani, now Palladium and all the bad choices in between. It will not get better under the leadership of David and Steven Nichol's. Steven has no vision and David has no talent. K-Swiss is a dead brand under these two. Boycott KSWS until the Nichol's clan is gone for good.

      • 1 Reply to kashkingya
      • The 'quality of production" issues you mention are more about country of origin rather than K-Swiss employee-related. As athlteic footwear production moved from Taiwan and Korea (quality)
        to China and Indonesia (less quality) all atheletic shoe brands suffered quality issues.
        Steve Nichols back in about 1984 or 1985 was in the right place at the right time. he had excellent industry experience from his family's Brooklyn children's show store operations, and his own executive work for Stride Rite corporation. In K-Swiss he bought a small company with one shoe style and about $10 million annual sales. It was a great opportunity to expand the line to more shoe styles and take advantage of booming Taiwan and Korean shoe manufacturing., while at the same time US consumers were wearing atheltic shoes styles more so than ever before. From 85-90 K-Swiss company grew its annual sales 20% to 25% per year. Then in the early 90's K-Swiss became trendy as as "inner city fashion brand" and sales revenues really exploded higher.
        The late 90's is when Nichols should have recognized that fickle inner city consumers would not sustatin the K-swiss brand name, K-Swiss name is only authentic to tennis , it is not a versatile name like Nike or Reebok or Puma, which can be spread across different shoe product categories.
        Given the limitations of the K-Swiss name, building a second or third name back when the company had deep cash resources, would have been the best course of action. For example Royal Elastics and Palladium are excellent names with the potential to have credibility and consumer acceptance across a wide variety of big volume footwear categories. But in recent years the Nichols' watsed too much time and money trying too push the K-Swiss name where it did not belong, into running, triathelete, lifestyle etc... categories. Consequently, the financial condition of K-Swiss is now too weak to try and resurrect he company with new brand names.