We design and market Skechers-branded lifestyle footwear for men, women and
children, and performance footwear for men and women under the Skechers GO brand
name. Our footwear reflects a combination of style, comfort, quality and value
that appeals to a broad range of consumers. Our brands are sold through department
and specialty stores, athletic and independent retailers, boutiques and internet
retailers. In addition to wholesale distribution, our footwear is available
at our e-commerce websites and our own retail stores. As of February 15, 2016,
we owned and operated 119 concept stores, 155 factory outlet stores and 117
warehouse outlet stores in the United States, and 82 concept stores, 41 factory
outlet stores, and five warehouse outlet stores internationally. Our objective
is to profitably grow our operations worldwide while leveraging our recognizable
Skechers brand through our strong product lines, innovative advertising and
diversified distribution channels.
We seek to offer consumers a vast array of stylish and comfortable footwear
that satisfies their active, casual, dress casual and athletic footwear needs.
Our core consumers are style-conscious men and women attracted to our youthful
brand image and fashion-forward designs, as well as athletes and fitness enthusiasts
attracted to our performance footwear. Many of our best-selling and core styles
are also developed for children with colors and materials that reflect a playful
image appropriate for this demographic.
We believe that brand recognition is an important element for success in the
footwear business. We have aggressively marketed our brands through comprehensive
marketing campaigns for men, women and children. During 2015, our Skechers brand
was supported by print, television, digital and outdoor campaigns for men and
women; animated and live action kids’ television campaigns featuring our
own action heroes and characters; marathons and other events for our Skechers
Performance Division; donation events surrounding our BOBS from Skechers charitable
footwear program; and print, television, online and outdoor campaigns featuring
our Skechers Performance and Skechers lifestyle endorsees. These endorsees included
globally known recording artists Demi Lovato and Ringo Starr; sports legends
Sugar Ray Leonard, Pete Rose, Joe Montana, Joe Namath and Mariano Rivera; and
television personalities and actresses Brooke Burke-Charvet and Kelly Brook.
For the Skechers Performance Division, we also had Olympians Meb Keflezighi
and Kara Goucher; and professional golfers Matt Kuchar, Belen Mozo, Billy Andrade
and Colin Montgomerie.
Since 1992, when we introduced our first line, Skechers USA Sport Utility Footwear,
we have expanded our product offering and grown our net sales while substantially
increasing the breadth and penetration of our account base. Our men’s,
women’s and children’s Skechers-branded product lines benefit from
the Skechers reputation for styling, quality, comfort, innovation and affordability.
Our Performance lines benefit from our marketing, product development and manufacturing
support, and management expertise. To promote innovation and brand relevance,
we manage our product lines separately by utilizing dedicated sales and design
teams. Our product lines share back office services in order to limit our operating
expenses and fully utilize our management’s vast experience in the footwear
industry.
We believe that our products’ success is related to our ability to recognize
trends in the footwear markets and to design products that anticipate and accommodate
consumers’ ever-evolving preferences. We are able to quickly translate
the latest fashion trends into stylish, quality footwear at a reasonable price
by analyzing and interpreting current and emerging lifestyle trends. Lifestyle
trend information is compiled and analyzed by our designers in various ways,
including reviewing and analyzing pop culture, clothing, and trend-setting media;
traveling to domestic and international fashion markets to identify and confirm
current trends; consulting with our retail and e-commerce customers for information
on current retail selling trends; participating in major footwear trade shows
to stay abreast of popular brands, fashions and styles; and subscribing to various
fashion and color information services. In addition, a key component of our
design philosophy is to continually reinterpret and develop our successful styles
in our brands’ images.
The footwear design process typically begins about nine months before the start
of a season. Our products are designed and developed primarily by our in-house
design staff. To promote innovation and brand relevance, we utilize dedicated
design teams, who report to our senior design executives and focus on each of
the men’s, women’s and children’s categories. In addition,
we utilize outside design firms on an item-specific basis to supplement our
internal design efforts. The design process is extremely collaborative, as members
of the design staff frequently meet with the heads of retail, merchandising,
sales, production and sourcing to further refine our products to meet the particular
needs of the target market.
After a design team arrives at a consensus regarding the fashion themes for
the coming season, the designers then translate these themes into our products.
These interpretations include variations in product color, material structure
and embellishments, which are arrived at after close consultation with our production
department. Prototype blueprints and specifications are created and forwarded
to our manufacturers for design prototypes. The design prototypes are then sent
back to our design teams. Our major retail customers may also review these new
design concepts. Customer input not only allows us to measure consumer reaction
to the latest designs, but also affords us an opportunity to foster deeper and
more collaborative relationships with our customers. We also occasionally order
limited production runs that may initially be tested in our concept stores.
By working closely with store personnel, we obtain customer feedback that often
influences product design and development. Our design teams can easily and quickly
modify and refine a design based on customer input. Generally, the production
process can take six to nine months from design concept to commercialization.
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