Supra President on New Chinese Owner
As of this week, Supra has a new owner.
Xtep International Holdings Ltd, a Chinese sportswear retailer, completed the acquisition of KSGB, the multi-brand company comprising the Supra, K-Swiss, and Palladium brands.
Xtep bought KSGB from E. Land, a large South Korean conglomerate.
Xtep began its business in the 1990’s, producing athletic footwear for other well-known brands, and created the standalone Xtep brand in 2002. The Xtep brand is centered on running but maintains a fashion sportswear brand for image-conscious Chinese consumers. The Xtep brand grew over 20% in 2018, with retail sales of close to $2B across 6,400 Xtep retail stores.
“With KSGB now part of the Xtep group, we are ready to take these iconic brands to the next level of growth and prosperity.” Xtep Founder, Chairman, and CEO Mr. Ding Shui Po said in a press release.
We checked in with Supra President Steve Harden to find out what this all means for Supra. Steve joined Supra two years ago after working at Oakley, Adidas and K-Swiss.
What does this deal mean for Supra?
Steve Harden: As part of the XTEP family, Supra will now benefit from the extensive resources within our newly formed collection of brands, including research and development, supply chain, and expertise in retail and the customer experience.
This is a game changing opportunity for Supra. As an independent skate/lifestyle brand, it’s a daily challenge to compete with global brands with deeper pockets and extensive product development teams.
Under XTEP’s ownership, Supra will be able to tap into resources like never before.
How has Supra been performing? How did 2018 turn out for the brand?
Steve Harden: The skate footwear category has indexed down over the past three-to-five years, with the exception of Vans and other global brands that have entered this competitive space.
Supra, which is always pushing the limits and viewed as an outsider, performed better than the class, but was part of the downtrend.
Two years ago I was recruited to change this trajectory, and we have. First by narrowing our SKU count and focusing on what got us to the dance – being different, using premium materials, and rising above the norm to defy the odds.
While we are not where we want to be yet, we are focused on celebrating what makes Supra different than virtually every other footwear brand in the marketplace.
Our mantra “Rise & Defy” is our rallying cry in everything we do. We ask ourselves every day, “how do we rise and defy our way through our challenges, and how do we create the best damn product possible, that will empower consumers to Rise & Defy past their own struggles in life?”
What is the current target market for Supra?
Steve Harden: Supra remains at the forefront in design and use of crazy and cool materials. In order to do that, you need to have confidence in the products you use.
We’re not just talking about using the best, most durable materials. We’re also talking about who we partner with, how they interact with their consumers, and do they have the mentality to pass the “Rise & Defy” test.
Supra’s target market, while ever changing, is a combination of skate and streetstyle. Skate is a subculture unto itself with an independent, counter culture, don’t-bother-me mindset. Paralleling skate culture is streetstyle, where music meets art, entertainment and individuality through a skate lens.
At Supra we’ve literally opened our aperture to conceive the intersection of skate and streetstyle in a curious, fun and inclusive way.
When Supra was at its zenith from 2008 to 2015, our No. 1 silhouette was Chad MU$KA’s Skytop franchise. A high-top of extraordinary proportions, it was mocked and laughed at as not skateable, until it was, and became the No. 1 seller of high-top skate shoes ever.
With Muska in the Supra stable for life, we are creating Skytop VI that will launch in late 2020. We also have a couple of exciting drops that will celebrate Chad in compelling ways and will undoubtedly create buzz, awareness and Supra brand heat that hasn’t been felt in the past four years.
While traveling the planet over the past 12 months, I saw that everyone talks about Chad Muska – in Asia, Europe, the U.S., South and Central America, and, surprisingly, in Russia.
We are excited about the opportunities for the future of Supra, and our new owner Xtep will provide the resources and means for us to Rise & Defy the odds to once again be the reigning independent skate/streetstyle brand.
Can you please remind us what happened to the KR3W brand?
Steve Harden: KR3W was once the leading denim brand for skate consumers. It was the first denim brand to incorporate stretch materials into denim products and the skate community enthusiastically embraced KR3W from the very beginning.
When Supra and KR3W were sold in 2016, the new owners decided to sideline KR3W to focus on Supra. Since then, we’ve continued to sell KR3W exclusively online at www.kr3w.com, with marginal success. However, during my global travels, people asked about KR3W a lot.
We’re excited about having new ownership that brings a whole new realm of research and development, investment and the desire to recreate KR3W.
Be on the lookout for a relaunch of the KR3W brand in mid-2020.
Is Supra still selling apparel?
Steve Harden: Yes, Supra is developing and selling apparel. Primarily T-shirts, hoodies, hats and accessories, with limited cut-and-sew. As Supra gains traction with our new, focused approach with footwear, we’ve seen increases in distribution of our apparel, and in sell-through.
Supra apparel is also the fastest growing category at www.suprafootwear.com.
I believe one of the perceived key advantages of former owner E. Land was growing Supra in Asia since E. Land was a South Korean company. Did that happen, and is there that same opportunity in China with the new owners?
Steven Harden: The planned expansion into Korea and China under E. Land did not materialize due to internal conflicts and priority shifts.
However, the future looks bright for Supra in China, where new owner Xtep is a powerhouse. It is the No. 2 athletic/lifestyle brand and operates more than 6,500 stores.
And there are other significant opportunities for Supra in the APAC region.
For example, we recently appointed the Accent Group as Supra’s distributor in Australia. Future demand is substantial there, with the Accent Group reordering Spring/Summer 2019 product three times, and tripling their Fall/Winter 2019 projection.
Japan, where we operate two standalone Supra stores, remains a bright spot in the APAC region, and influences additional distribution in Asia.