Boot Barn Holdings Inc. Chief Executive James Conroy stepped into his post six years ago with little knowledge of the Western and workwear retail sector.
“Having grown up in New York, we were pretty far away from the Western industry,” said Conroy, who previously served as chief operating officer of retailer Claire’s Stores Inc.
“But I came out and interviewed and had a really great connection. It’s been a fun ride.”
The city slicker has made the transition smoothly. Over his tenure, the Irvine-based company’s sales have tripled to $678 million for the fiscal year ended March 2018.
The company’s performance over the past year in particular helped Conroy earn the Business Journal’s nod for Businessperson of the Year in the retail category.
Boot Barn’s (Nasdaq: BOOT) upward trajectory has taken place through organic growth and acquisitions.
The company plans to boost its retail presence with 23 new locations by the end of its fiscal year in March, as it looks to achieve a long-term goal of operating at least 500 stores.
It currently has 224 locations in 32 states.
Local workforce also grew over the past year to 243 employees, up 36%. Companywide staffing increased nearly 20% to 3,753.
The specialty retailer ranked eighth among large firms on the Business Journal’s latest list of fastest-growing public companies in Orange County, with two-year revenue growth of nearly 16% to $700.6 million.
It was the only apparel-related company to appear on the October list, bucking a trend that’s seen numerous area and national clothing makers and retailers retrench.
Conroy said his secret to the company’s success is “rule with an iron fist.” Jokes aside, he credits his team and their agility at rolling out new initiatives.
“In the wild, the big don’t eat the small. The fast eat the slow,” he said.
“We make decisions extremely quickly and we execute well. We don’t sit and strategize on things you can try and test so I think of all the things that we have focused on over the last six years it is execution and speed.”
For example, the company introduced its “range finder” in-store tablets to about 20% of its shops this past Christmas as a test. If successful, it will roll out the technology that helps customers find the best footwear for their needs systemwide. Conroy said it took a day to decide on the technology and a week to introduce it.
Perfect Fit
Ken Meany founded Boot Barn in 1978 in Huntington Beach.
The family-owned business grew to 32 stores before Meany and his son and former company chief executive, Patrick, sold a majority stake to Newport Beach private equity firm Marwit Capital Partners in 2007 for an undisclosed sum.
Four years later, Los Angeles-based firm Freeman Spogli & Co. acquired the chain. At the time, Freeman purchased an 89.1% stake in Boot Barn. It ended its majority ownership last year when it sold 40% of its stake, according to regulatory filings.
Boot Barn then went public in 2014 to help pay down debt and grow its retail presence, raising about $87 million on the sale of 5 million shares, which was about 16% of the company.
Its share price has a history of following the price of oil, as a large portion of its business comes from customers tied to that industry.
At one point, shares nearly tripled last year reaching a high of $31 in September when oil prices were up, but recently declined to about $18 per share amid the down market for both stocks and oil prices.
Boot Barn’s market cap is about $500 million.
The company recently reported second-quarter earnings of 16 cents a share, beating analyst estimates of 9 cents. Revenue of $168.1 million also beat the $161.4 million analyst consensus.
Quarterly net income was $4.5 million, up from $1.1 million year-over-year. Same store sales also increased by 11.3%.
Boot Barn projects same store sales to grow 5% to 7% for the third quarter ended Dec. 29. It also anticipates net income per share of 56 cents to 60 cents.
Saddle Up
While its Western wear and boot category makes up about 70% of the company’s sales, Conroy said its workwear and boots category has been growing and it’s also tackled a new customer segment—fashionistas.
It introduced a new women’s apparel and boot segment, called Wonderwest, geared towards a younger, more fashion-forward customer. Part of that effort included a national rollout four months ago of its Idyllwind brand of shoes, clothes and accessories created in partnership with country music star Miranda Lambert.
Conroy said the decision to introduce a third category to its business was the result of “art and science.”
“Through some analytics, we saw that we had this emerging fashion customer,” he said. “We also have a creative team that identified a market need to go after the festival country music fan, which is younger and more female.”
The company also hired a new creative director, Isha Grijalva, two years ago, who has broadened its marketing message from its traditional Western-style core branding to one that taps into an Americana lifestyle.
“We often say that our customer builds America, feeds America and protects America and those three segments are the very fabric of what the country is made of,” Conroy said.
While Boot Barn has—like every retailer—taken steps to develop and grow its e-commerce business with the introduction of tablets in its stores, Conroy makes it clear that its brick-and-mortar business is still strong.
“I think a lot of retailers have become blinded to the headlines that everything is going online,” he said. “The data in Boot Barn indicates that most retail transactions are still conducted in a store, and we haven’t lost sight of that. We’re stitching our digital business with our retail business well [but] most people interact with Boot Barn in a store so we have to ensure that we pay enough attention there.”
