Hi-Tec Looks to Outdoor Specialty and Innovation to Re-Position Brand

Mr. van Wezel, 33, took the helm at Hi-Tec from his father in late May just as the company was relocating its global headquarters to Amsterdam in its quest to evolve into a European brand. From there, and Hi-Tecs new U.S. headquarters in Portland, OR, van Wezel will plot to dislodge Wolverine World Wides Merrell unit as the top brand in outdoor footwear.

We feel that by investing in product we can really give ourselves a shot at that, said van Wezel in a telephone interview last week before heading to the OutDoor Show in Friedrichshafen, Germany.
Hi-Tec generated $239 million in sales in 85 countries in 2010 and is on track to hit $250 million this year.  Roughly 45 percent of last years sales came from the United Kingdom and Europe, while 25 percent was generated in North America and 30 percent from the Rest of the World region. Hi-Tec was founded by van Wezels father Frank in 1974 in England, but the company moved its headquarters from London to Amsterdam at the end of May to have access to the continents leading creative talent and establish itself as a genuine European brand.

The moves are part of a long-term strategy that is being driven in part by rising costs in China.

If China exports inflation it changes the dynamics, van Wezel suggested in the interview. As costs increase, it becomes even more important for a product to have good shelf appeal because you have to demand a higher price. You need to have stronger brand in this period and this is forcing us to become better and invest more in product, because if all your focus is on price, you will come out of this far worse.

This, of course, will require changes in distribution in the U.S., which figures prominently in Hi-Tecs plans.

As a publicly-traded company in the 1990s, Hi-Tec shifted to a growth model that emphasized increasing sales to big-box stores. The companys products are now available in more than 10,000 U.S. retail outlets.

There were distribution decisions that were not necessarily good for long term for the brand, he said. Now that its a family-owned brand again, (Frank van Wezel took the company private in 2000), we have very quick decision making and its not all about turnover. Its about distribution. Im in it long term to make this brand in seven years as great as it possibly can be, so I want the best distribution.

While that wont mean cutting off existing big box retailers, it will mean renewed emphasis on innovation to create more product for specialty channels. 

In spring 2010, for instance, Hi-Tec became the first consumer products company to adopt ion mask nanotechnology, which had been developed for the U.K. Ministry of Defense for chemical warfare applications.

Eleven outdoor and athletic footwear brands have since adopted the technology, including Nike, Adidas, K-Swiss and Teva.
We are proud Hi-Tec led that technology, said van Wezel. It replaced DWR finishes where chemicals can be quite harmful and there is a lot of waste.

In March, 2010, Hi-Tec hired Merrells creative director Charles Willis.

The USA for me personally is a big focus because I think you can achieve growth in the U.S. quicker, van Wezel said. In America if you do something right with distribution it can snowball a lot quicker.

The company is also moving aggressively in Europe.

After 36 years of being in the UK, we wanted to change and saw European markets as a huge opportunity for growth, he said. So we decided to locate in Europe and employ Europeans and become a European brand. Our culture will become more European.

Hi-Tecs European near-term strategy is focused on tapping European designers to increase sales in the Benelux countries, Scandinavia, Germany and Austria.  At both the OutDoor and Outdoor Retailer shows, the company will focus on the reintroduction of its Sierra Sneaker, a new collection of Italian-designed footwear for women called Harmony and Infinity, a high-end line of trail running shoes featuring the ion mask technology.

 
Weve gone from selling product for a price to selling collections, van Wezel said. Some collections will be for mom- and-pop stores, some will be for big-box stores and other ones will be for specialty outdoor.

The Sierra Sneaker and Sierra Lite, which helped establish the light hiker category in the early 1980s, will  continue be sold into full-line sporting goods and outdoor specialty stores. The New Harmony collection aimed at European women looking for more style in their outdoor footwear and the Infinity collection will be sold through outdoor specialty stores.

We have not got the marketing dollars of Nike or VF that can drop $10 million into a brand, so we have to be authentic and real and that is through product and distribution, said van Wezel.  Retailers will see a marked change with the product coming to market.