Shoe brands’ secret to success? Going slow

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Subscribe to enjoy similar stories. Hoka sneakers, On shoes, Ugg boots and Birkenstock sandals don’t look very much alike, but they do have one thing in common: They have all been flying off the shelf. What are they doing right? Getting a shoe’s comfort, performance and style right is important.

But these brands also have taken a page out of luxury brands’ playbook by being choosy about where they make their shoes available and pacing growth. Deckers Outdoor, which owns both Hoka and Ugg, has seen healthy growth at both brands. Sales at Ugg, its largest brand, rose 16% last fiscal year and are expected to grow by a further 7.4% in the current fiscal year.

Revenue at Hoka, its second-largest brand, has managed an impressive compound annual growth rate of roughly 50% over the last four years, while its competitor, On, averaged compound growth of more than 65% over the comparable period. Revenues for both On and Hoka are expected to expand by some 25% this year. Sandal brand Birkenstock is set to increase revenue by a double-digit percentage in each of the next few years.

Industry analysts say Deckers stands out for the meticulous way it allocates inventory. The company learned its lesson through Ugg boots, which were popular in the early 2000s before fizzling out. The company made a decision in 2016 to stop distributing through certain retailers, pulling back from some 200 stores.

Instead, it narrowed its distribution through larger partners such as Amazon and Macy’s. That effort, alongside buzzy, limited supply launches of some styles—such as the Ultra Mini Platforms—helped boost brand cachet. Deckers applied those learnings to Hoka, which it acquired in 2012.