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The
following Associated Press article appeared in the business section
of my local newspaper.
Keds
"feeling good" again after returning to its roots
A shoe company is reinvigorated under new president
Joanna Jacobson.
Joanna
Jacobson
By Sharon L. Lynch –
The Associated Press.
Lexington, Mass – Joanna Jacobson could star in a Keds ad.
The 38-year-old mother
of three comes to work in slim-fitting khakis, a cable-knit sweater
and tan tennis shoes. A little casual for a company president perhaps,
but it’s a look that fits her busy job, as the head of Keds.
"I know what it
seems like Keds has become Joanna Jacobson, that’s not it,"
she said in a recent interview. "This is a brand I think that
is for women who are young at heart."
Now in its 82nd
year, the brand many American women view a synonymous with tennis
shoes is savoring a comeback after several rough years.
Keds sales skyrocketed
in 1987 with the release of "Dirty Dancing," a film in
which actress Jennifer Grey danced her way into Patrick Swayze’s
heart while sporting white sneakers.
After peaking in 1993
at about $300 million, sales declined by double digits as distribution
problems plagued the company and designers strayed from Keds’
traditional base with chunky styles.
Jacobson who took the
helm in 1996 after serving as senior vice president for marketing
at Converse Inc, dubbed the mid-90s a "total disconnect"
from retailers and customers.
So she has taken Keds
back to its roots.
The new shoes are a better
version of Keds old standard-issue canvas sneaks; they are made
of softer cotton uppers and carry substantially more insole padding.
To promote the new direction,
Keds is undertaking a $9 million advertising blitz, its largest
ever. It’s blanketing prime time TV and retail floors nationwide
with images that hearken to Keds’ glory days.
One commercial depicts
Keds-wearing young women gathered in a bridal shop for their fittings.
Another shows a mother hurriedly primping in her bathroom mirror
as several children clamor at the door.
Keds Relaxed Fit, "To
give your toes what the rest of you can use – a little more
room," the voice-over says.
Analysts credit Jacobson
and her new management team with brining Keds Corp., a wholly owned
subsidiary of Stride Rite, back to the cutting edge of specialty
retail.
"We think the brand
has truly turned around," said Steve Richter, an analyst with
Tucker Anthony. "The product is substantially better and …
the advertising is really exciting."
Stride Rite earnings
for the second quarter exceeded analysts expectations. They predicted
earnings per share to be about 14 cents – flat compared to
the same time last year – but it was 6 cents higher.
Earnings in the Keds
division increased 10 percent over a year earlier, offsetting startup
costs for marketing Levi’s Nine West Kids and Tommy Hilfinger
women’s product lines, which will be introduced during the
fall.
"The combination
of improved products, and effective marketing produced or first
quarterly sales gain at Keds in several years," said Stride
Rite’s chief executive officer, Robert C.Siegel, who is retiring
in January.
Stride Rite stock is
trading at more than $15 share on the New York Stock Exchange, up
from less than $7 in 1996.
The new ad campaign,
Jacobson’s first major one with Keds, capitalizes on name recognition
and long-standing customer loyalty.
"We wanted to do
it in a way that kind of reconnected almost emotionally with women,"
she said noting that the current "Feel Good" campaign
is reminiscent of the company’s successful slogan "They
feel good" of the late ‘80s and early ‘90s."
"It’s what
women want today, to feel good about themselves, feel good about
their lives," Jacobson said. "Women right now are busier
than they have ever been … but they are positive about it."
So far, it looks like
her tactic is working.
Reorders from retailers
who stocked Keds this April were 86 percent higher than for the
same month last year, Jacobson said.
"The good news was
the brand was intact, it just needed to be updated, to be dusted
off.
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