361° International Ltd.’s recent arrival to the U.S. market is another step toward the China-based footwear and apparel company’s ultimate goal: becoming a top five global sports brand in a short period of time.
Such unabashed drive is what convinced Jim Monahan to leave the executive suite of Asics America Corp. for the president’s post at 361° USA in Irvine.
“I was very fortunate to work with a phenomenal brand over the last 20 years, and it will always be a brand that I’ll respect,” said Monahan, who rose to president of footwear at Asics America, a unit of a Japan-based parent.
“But having the opportunity to put something together special like this, to introduce a brand into the market and have it grow from nothing into something very substantial, going from zero sales to goals we set forth, was absolutely a personal challenge and one that I wanted to undertake with a small group of professionals that I respect,” he said.
There’s also room for reality checks.
“We will work our butts off to make it happen, and when it does, we’ll celebrate,” Monahan said. “But we’ve got a long way to go and a lot of work to do before we do any celebrating.”
Not New
A big share of Monahan’s workload these days is explaining to potential wholesale distributors that 361° is not a startup—its parent has a market value of about $600 million and operates some 7,000 brick-and-mortar stores.
“Our marketing budgets are beyond what would be expected of a new company,” he said. “And that’s an important [aspect] I’ve been talking to retailers about—we are not a new company. We are an international sports brand that’s coming here to the U.S. that’s venturing into Europe, that’s already in the Middle East, that’s already through various regions of Asia. This is a brand that’s on a global expansion and certainly has resources to do it, and is very active on the international sports stage.”
Monahan was referring to the parent company’s sponsorship of the Rio 2016 Summer Olympics in Brazil, for which the brand will supply apparel, footwear, and accessories to torchbearers, volunteers, technical and other officials.
It also sponsored the 17th Asian Games that took place in Incheon, South Korea last month.
Making a Mark
The U.S. subsidiary is out to make a mark, as well, with an inaugural marketing campaign featuring the Cleveland Cavaliers’ Kevin Love that launched a couple of weeks before its online store went live on Nov. 1. The campaign, developed by Ed Goldman of Hal’s Napkins Corp. in Blue Jay, Calif., promotes the brand as one that delivers “one degree beyond” what’s expected.
“We are constantly looking at our resources and trying to figure out how we can make as many touch points with consumers as we can, whether that’s through social media or more traditional media,” Monahan said.
He would not provide specifics about the media spending but said 361° USA is “well-funded.”
361° may not be an easy sell in the U.S., even with a large budget.
“Even though they had success in China, the American consumer is different and is already established in what they like,” said Joe Lourenco, co-owner of the New Balance store at South Coast Plaza and Snail’s Pace Running Shop, which has locations in Fountain Valley, Mission Viejo, Brea and Monrovia.
Marketing definitely helps, Lourenco said, but “how the product performs, that’s what it really comes down to. If it stacks up to everything else that we have on the wall, it will make it a successful shoe.”
Exceeding Expectations
Monahan said building a consumer base for a newcomer in an industry saturated with “extremely good brands” will require “product solutions that exceed customers’ expectations.”
“There are opportunities, there are windows in the market not all brands are truly addressing,” he said. “You just need to turn over the stone and find them.”
361°’s shoes—the Chromoso and the 361-Sensation models—feature the brand’s “Quick Dynamic Defense” proprietary technology, a three-layer midsole that provides “stability, rebound and comfort while maintaining a lightweight feel.” They retail in the range of $60 to $120 and are made specifically for the U.S. market.
The different product line and pricing level offered in the U.S. market give the parent company an “opportunity to raise the overall image of the brand,” Monahan said, something it struggled to do on the domestic front.
“They are positioned as midlevel in China—nothing wrong with that—but as international brands like Nike and Adidas have come into their market, it’s put a lot of pressure on the business,” he said.
Jynwel Capital
361° is not the only one looking outside the homeland for business prospects in the footwear industry.
An investor group that includes China-based private equity firm Jynwel Capital is launching an effort to buy Reebok from Adidas AG for about $2.2 billion, the Wall Street Journal reported last month.
Meanwhile, 361° USA’s team of five, supported by a staff of independent sales reps, is courting sporting goods stores and independent running stores, as well as department and family footwear stores. So far it has signed distribution deals with Off Broadway Shoe Warehouse and Dunham’s Sports in Troy, Mich.
“Our goal is to have presence in every major channel of distribution in the country by year’s end,” Monahan said. “Down the road, having our own flagship stores is certainly the goal we will have out in front of us, but it’s not something we’ll attack immediately.”
