COLE-HAAN GETS THE NIKE AIR ADVANTAGE

Byline: Wendy Hessen

NEW YORK — Cole-Haan is taking the successful technology of its powerhouse parent to bring its 72-year-old brand to a new generation of consumers.
The venerable footwear maker, with annual sales of roughly $200 million, has begun such an attempt, led by some of the same creative team and technology that catapulted Nike into its position as the dominant leader in athletic footwear.
Cole-Haan, Nike’s wholly owned subsidiary, based in Yarmouth, Me., has kept its major overhaul a quiet one, until now. Cole-Haan, long known for exceedingly well-made and comfortable footwear that’s been a commercial success but hasn’t created much fashion excitement, is streamlining its extensive product line and dividing it into three distinct lifestyle segments: city, country and studio.
But the big news centers around its recently granted exclusive rights to use Nike’s famed Air technology for a collection of men’s and women’s footwear. “The sports world is very good at making products that improve performance,” said Gordon Thompson, Cole-Haan’s creative director and vice president of design, who is overseeing the new collection. “We all put a lot of miles on our shoes these days and we see this as an opportunity to combine a product known for its high-quality craftsmanship with innovation. It’s about taking something very familiar and making it applicable to your life.”
The Nike Air concept of using encapsulated gas to cushion running shoes was first used in a 1979 model called Tailwind. By 1980, the shoe had revolutionized the fitness industry and by 1987, Nike had developed the concept by using a two-unit system with separate Air units under the heel and forefoot. Together the units offered more cushioning than ever before. This was also the first time the Air Sole was visible through an opening in the sidewall of the shoe.
During his 10 years at Nike, Thompson oversaw Nike’s 300-member design staff and launches, including its Air Max product line. He was also the creator of the Niketown retail concept. While he readily admitted that combining an athletic bottom on an upscale leather shoe is not especially new, the Cole-Haan edge will be in having the Air technology.
As for footwear firms at all levels who have made attempts to inject that comfort and style into their products, he said, “There is a time for science projects and a time to realize you are designing something that must perform in people’s real lives. There is a heritage and legitimate feeling about Air. It’s the real deal versus the knockoff.”
Cole-Haan’s chairman and chief executive officer, Matt Rubel, agreed with Thompson, claiming that as recently as the last several months, Nike had been generating interest from several other major footwear makers, all based in Italy.
It wasn’t until senior Nike executives saw Cole-Haan’s results that they agreed to give the company exclusive rights to its subsidiary. Cole-Haan has a five-year deal for the Air technology and an option to renew for another five. Rubel joined the company a year ago from Popular Club Plan, where he was president and ceo of the $200 million subsidiary of the Fingerhut Cos.
“From an aesthetic standpoint, fashion and sport have been coming closer each of the last few years, but nothing has combined the world’s premier footwear technology with high-quality fashion footwear,” said Rubel. “We believe this is a catalytic moment, and we intend to bring that idea to a very broad audience.”
Rubel said the firm — which has already sold out of its allocated production run for the first five months — expects to sell 100,000 units in the first six months. Initial deliveries will be limited to Cole Haan’s 14 stores and select wholesale partners, such as Nordstrom and Neiman Marcus, beginning in August.
The collection will gradually be rolled out to 250 U.S. doors. The line will account for 25 percent of the company’s advertising campaign budget, which will be launched in September editions of fashion and lifestyle magazines. Both the Cole-Haan and Nike Air logo will be identified in the ads.
The initial collection has about eight women’s and seven men’s styles, which retail from about $165 to $265. Ankle boots, loafers and a mary jane style are among the first series of looks, all of which incorporate Cole-Haan’s upscale leather uppers with an Air bottom.
The initial styles are all flats, but Thompson and Rubel said the company was trying to offer a diverse range of styles with the Air technology.
“We’ll broaden the range of materials and end-use applications each season and design new Air bottoms every six to 12 months,” said Rubel.
Thompson pointed to the tremendous learning curve that has been necessary for the firm’s craftsman on the Nike and Cole-Haan sides, none of whom had ever tried something like this.
“There are a lot of opportunities here,” he said. “We want the line to be diverse. We’re definitely moving beyond being the home of the loafer. We want this to be a mainstay. For spring 2001, the air bag will be even more obvious and there will be lots of color.”

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