Ugg Has A Risky Plan To Deal With Retailers That Don't Want To Sell Its Products

Business Insider

Sales of Ugg boots are plummeting amid speculation that the boots are going out of style

Deckers Outdoor, the parent company of Ugg, has a risky solution for fixing the flailing shoemaker, Joel Schectman at The Wall Street Journal reports

It's shifting away from its wholesale bread-and-butter and doubling its retail store footprint. 

"Many retailers are unwilling to sell Decker products, beyond the classic UGG boots, limiting sales of UGG sandals and sneakers geared towards spring, fall and summer," Schectman reported. 

Deckers aims to have 200 stores by the end of 2015 — that's more than double its current 78 locations. 

This isn't the first time Ugg has attempted to distance itself from its signature boots. The retailer hired football player Tom Brady as a celebrity spokesman in an attempt to bring in male customers. 

But Ugg has struggled to expand product offerings in the past because it couldn't compete with department stores' more-established brands in categories like gloves, heels, coats, or sandles. 

"Large retailers aren’t going to shelve UGG coats and scarves instead of more established brands,'” Scott Krasik an analyst with of BB&T Capital Markets, told Schectman

And that's where Ugg's plan gets risky.  While having more retail stores will allow Ugg to stock anything it wants, the question remains of whether consumers will shell out for items that aren't boots. 

But Ugg might be able to pull off the expansion because its brand power is powerful, Randal Konik, an analyst at Jefferies, wrote in November

"Google search trends, Facebook likes and unique visitors to the Ugg website all show that the brand is still healthy and relevant,’’ he wrote.

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