Surf Sandal Maker Sanuk Taps Veteran to Step Up Growth
By JENNIFER BELLANTONIO
Irvine-based beach sandal maker Sanuk USA has hired a new chief executive to put a little spring in the sandal maker’s step.
Bob Rief, former chief executive at San Diego-based beach sandal and shoe maker Reef, has been tapped to jump-start sales at Sanuk, which is known for funky designs.
Sales at Sanuk have “leveled out a little bit,” according to Rief.
“That was something to pause and think about because the surf industry is on fire,” Rief said.
Sanuk, which means “happy” in Thai, is looking to grow yearly sales to the $20 million range in the next few years, Rief said. The company declined to say what sales are now.
Rief said he was looking at retiring from Reef when he ran into Sanuk founder Jeff Kelley at the beach. The chief executive’s position is new, and Rief will work with Kelley, who is president.
The beach sandal maker is one of few brands with a great “vibe” and “legs” in the surf industry “that hasn’t been gobbled up by somebody,” Rief said.
Kelley, also a former Reef exec, started Sanuk in 1997 from his garage in Del Mar. The company is known for sandal designs featuring indoor-outdoor carpet, leopard skin prints and other wild designs.
Sanuk also has brought on a new head of national sales, John Vance, who has worked at Huntington Beach-based Quiksilver Inc. and other action sports clothing companies in the past two decades.
Sanuk has the backing of Irvine-based C & C; Cos., which holds the license for Sanuk and Irvine’s Rusty Apparel. The contract apparel maker and distributor counts $100 million in yearly sales.
C & C; “put their muscle behind us to help us succeed,” Rief said. “Many little start-up brands like this fail because they can’t import or they don’t have the credit line to run the company.”
Sanuk has piggybacked on C & C;’s distribution for Rusty, which sells clothes in surf stores.
To boost sales, Sanuk has moved beyond what Rief called “novelty items”,such as funky flip-flops. The company has added more basic styles to its line of men’s and women’s sandals, which sell for $12 to $20 apiece.
A basic sandal includes a rubber bottom with uppers made out of knit and other materials. Leather and novelty sandals sell for around $45.
Women drive Sanuk’s business and make up 60% of sales, according to Rief.
“The leaders in the industry have been focused on guys for a long time,” he said. “When Jeff started the brand, he didn’t want to go up against the giants. He started making unique sandals for girls.”
For growth, Sanuk is banking on girls, who have been driving gains at Anaheim-based Pacific Sunwear of California Inc. and Quiksilver, among others.
“The girls market has been on fire for the last two or three years,” Rief said.
Rief has had a lot of practice building brands. He was one the founders of shoemaker Merrell, now part of Wolverine World Wide Inc. He also was general manager at Nike Inc.’s golf unit when Tiger Woods was signed.
But Sanuk faces steep competition from other sandal makers,including Reef,as well as Quiksilver and other big surfwear makers who also sell beach sandals and other shoes.
Rief said it’s too early to tell exactly how Sanuk’s changes will play out. He said he’s expecting sales to be up 40% to 50% for 2004, based on spring bookings.
“It’s pretty exciting because the support for Sanuk is coming from ultra specialty stores,” Rief said.
Among Sanuk’s pushes: building awareness of the brand in and outside surf circles and converting that to sales of sandals, Rief said.
“That’s a tricky game,” he said. “If you sell to the wrong non-surf channels you’re going to be dead in the industry. We’re very careful about it.”
Sanuk, which has about six people on its executive team and 40 sales representatives, relies on C & C; for customer service, importing, warehousing and invoicing, among other things.
C & C; “has good thinking going because they’re completely prepared on the business side,” Rief said. “It was a textbook opportunity. Sanuk had this great momentum in the surf industry, but it was pretty much unknown outside of it.”
New businesses for Sanuk and a jump in Rusty apparel’s business prompted C & C; to expand its space in Irvine in a recent move, according to Donald “Dac” Clark, C & C;’s president.
The new space is 98,000 square feet and has a bigger warehouse to stack product and process orders, he said.
