Global Expansion

Globe Australia builds a U.S. base step by step.

With Australian distribution rights for lines such as Birdhouse, Chocolate, and Spitfire, and manufacturing licenses for Mossimo, Stüssy, Four Square, and Fresh Jive, Australia’s Hard Core Enterprises has spent over twenty years building itself into a major supplier of skate, surf, and snow softgoods down under. In the last decade, Hard Core also successfully launched its Globe skate shoe brand in Australia before taking it to New Zealand, Germany, and more recently, the U.S.

But when President Gary Valentine arrived in So Cal to establish Globe U.S. in 1996, the venture was set up on a shoestring, rather than tapping into the deep pockets of its parent. “One of the biggest reasons for our success in Australia and internationally was, instead of coming into a market and throwing money at it, we have always acted as if every venture is a complete start up,” says Valentine, who now serves as president of Globe U.S. “Coming into a new market is about building up from the bottom, it’s about learning every aspect of the market, listening to what retailers want, finding the right sales force, and primarily about being responsive. That’s what has always worked for us and what has made us successful in the U.S.”

It’s been four and a half years since Globe U.S. received its first container of shoes. Since then, the brand has seen double-digit-percentage growth each year and has emerged as one of the top-selling shoes in skate shops. Globe team riders have a reputation for technical and consistent skating, and range in style and experience from veterans like Rodney Mullen to current phenom Danny Gonzalez. The company recently took its next step by launching Gallaz, perhaps the first full line of truly technical skate shoes designed entirely for women. And U.S. sales of Globe shoes now far surpass those in Australia, where the brand was launched seven years ago.

In the mid to late 80s, Hard Core Enterprises was the exclusive Airwalk distributor in Australia. But when Airwalk rolled out the brand to mainstream retailers, the shoe company asked Hard Core to continue distributing Airwalk to ‘core stores. Brothers Steve and Peter Hill brothers grabbed the opportunity to design and manufacturer their own brand for the ‘core skate/surf market, sports with substantial crossover in Australia. “The idea of going up against the resources of Airwalk was intimidating,” says Valentine. “But we already had the accounts and knew retailers would support us. The fact we were already an established distributor meant we knew in advance many of the issues we would have to face, ranging from limited stock availability to international pricing. But learning to really listen and be responsive to retailers, and mastering the sharp learning curve any manufacturing venture entails, helped us build an infrastructure and get things right on our home turf before going international. We knew ultimately we would have to open the U.S. market, but with the U.S. market already facing saturation we knew we would only have one chance, and we would have to get it right.”

Instead of heading straight to the U.S., the brand instead turned to New Zealand. Though it’s the closest geographic market to Australia, New Zealand still represented significant cultural differences with its unique brand-appeal and fashion sensibilities, all of which were overcome by sticking to a gradualist principal Valentine describes as “listening, not steamrolling.”

Germany was elected as the next international market due to its strong skate culture and the existing relationships between Hard Core and German distributors. “Again the process was about building an infrastructure, ironing out delivery, and dialing the product, which in the early days still needed some work,” says Valentine. “The benefit was that we learned to structure ourselves to be responsive to markets in which we were far from faliar. One thing we learned, which has stuck with us, is retailers are not buying our product because we’re spending big money, but because we’re making doing business easy for them with our deliveries, warranties, and sale and return policies.”

However, the U.S. market remained the grail, and when the Hill brothers figured Globe was ready, even the prospect of a glutted market didn’t deter them. “Of course there were difficulties,” says Valentine. “Constantly hearing ‘no’ makes it tough to get a confidence level, but we knew what we had to do. In the first few months the phone would ring, and someone would ask for ‘sales,’ so we’d just transfer the call to whoever hadn’t answered the phone.”

This made it essential to find a sales team that understood the brand and the way Globe planned to approach the market. In many instances, this meant finding reps prepared to accept changes in the way they did things. “When we persuaded Steve Machado, our first employee, to come on board as national sales manager. He’d been in the industry a long time¿it was a big step backward for him to come and work for this two-man startup. I think he was shocked the day before he started when I told him he’d better bring a set of old clothes with him. Not only was there a good chance he’d be sleeping in the office, but there was an even better chance he’d be getting pretty messy unloading containers.”

Valentine points out the company’s cautious hiring policy has paid off, and Globe U.S. hasn’t lost or changed a senior manager since the first day they were hired. The company has also been hesitant to open new territories until they were sure they found the right rep. In fact, a number of territories still remain open. Globe’s in-house sales staff supplies retailers who ask for product, but remains adamant about not having the wrong person knocking on doors.

Another factor in the slow unrolling of the brand nationwide has been the differences in regional markets. Valentine sees the U.S. as numerous different markets. Factors like weather in the Northeast create a very different environment, demanding different product than the consistently sunny So Cal region. Luckily, Globe offers a wide range of product in a similarly wide range of pricepoints¿all the way down to a parent-pleasing 60 dollars, something that makes the brand a staple in many stores.

While product is the same worldwide, and much of the design input comes from the So Cal market due to its size, most finished shoe styles are collaborations between Australian and U.S. design teams. Globe considers this a corporate strength because the product remains international in orientation, less subject to the whims of local fashion, and more driven by technical performance and athletic functionality.

The Globe line consists of fifteen models (including three pro models). Fine-tuning is an ongoing area of focus, according to Marketing Director Jeff Cutler. He points out that the company adheres to a marketing plan that balances the time needed for a product to create an impression on the shelf with the constant need to update the line. Although each model is expected to have a two-year shelf life with a different color or design twist each season, Globe staggers deliveries of new designs, releasing three or four new variations each month while encouraging reorders of popular models. “Ideally, the time on the shelf is limited,” says Cutler. “But previously released products are always available.”

With a commitment to the idea that product design should be driven by technical and athletic advances, the range is constantly diversifying, depending on the specific requirements of the team. Pros Mullen, Chet Thomas, and Gershon Mosley, for example, all have substantial input into their individual pro models. “Take our Chet 4 model or our Sanction, which are now tongue-less while remaining snug and firm,” says Cutler. “If you look at the technical progression of our line, we are increasingly able to deliver a very specific feel, customized to each of our individual riders. Rather than following a single technical progression for all our shoes, we utilize available and emerging technology to allow the diversification necessary to satisfy each of our riders.”

Globe’s team started when Valentine (a longtime Australian pro skater) established relationships with Mullen and Thomas. “After that, our general intent was always to let the boarders build their own team¿they’re the ones out there checking out other boarders,” says Cutler. “We’re trying to build a family and retain very close interaction with all the team members. The relationship is very informal because it’s important the team doesn’t feel like they’re just part of a business relationship. Most of the time spent with the team is outside the office. I personally talk to each of them at least once a week, and Team Manager Andy Meade probably talks to every member every day.”

Cutler adds that most of the team live in So Cal, and that San Francisco-based Danny Gonzalez comes down every few weeks. But there is neither a strategy to restrict the team to So Cal, nor plans to widen the geographic base. “We pick team members for their spirit and attitude,” says Cutler. “Individualism and talent are the two driving features. We don’t really care where they live. One of our team’s strengths and what makes it so essential is just how different the members are as individuals. Take Rodney Mullen and Gershon Mosley: Rodney is a super-genius businessperson, but as long as he keeps giving, kids will keep looking up to him; Gershon is purely driven by love of skating, doesn’t care much for contests, and has no desire to be a media star.”

Globe keeps the team’s personalities in front of the consumers by being a major skate-media advertiser with regular gatefold spreads. Cutler feels this print advertising is effective in projecting the individual team personalities. Extensive print advertising also allows the brand to “dangle a carrot” in front of consumers to keep up excitement for new products.

Cutler anticipates increasing the focus on Internet and interactive marketing. At ASR in Sepember, Globe will release a full-length CD ROM, something he describes as “an expensive undertaking, but signaling a definite shift toward interactive marketing.” He remains skeptical about e-commerce, however, especially given the company’s reliance on distribution and brand building through ‘core skate stores.

The company already has about 850 accounts, but Valenitne sees plenty more room to expand. “We believe we can continue our present level of growth through additional sales in these stores and through opening up new ‘core stores where we’re not yet represented,” he says. Valentine counters the argument that the launch of Gallaz was a ploy to grow the company by adding a new line, rather than by developing Globe further: “If we were just looking for bottom-line growth, we wouldn’t have declined to include Mooks under Globe U.S. We have no short- or medium-term plans for other lines. I think we still have endless opportunities for Globe and Gallaz. I don’t see any signs of sales for Globe plateauing, and our two current lines are where we’ll focus all our concentration.”

The Gallaz line, launched this spring at ASR, came about after Globe discovered its gray-and-white Option model was a top-selling skate shoe among women. Further research showed that while women buy nine times as many shoes as men, most women visit skate stores only in the company of their boyfriends. “We wanted to create ownership of a product for women,” says Cutler, who thinks the line could make as big an impact for Globe as Roxy does for Quiksilver. “I think people were shocked by how ‘ungirly’ the product is.”

The brand has its own offices within Globe U.S., and is staffed entirely by women, who are responsible l progression of our line, we are increasingly able to deliver a very specific feel, customized to each of our individual riders. Rather than following a single technical progression for all our shoes, we utilize available and emerging technology to allow the diversification necessary to satisfy each of our riders.”

Globe’s team started when Valentine (a longtime Australian pro skater) established relationships with Mullen and Thomas. “After that, our general intent was always to let the boarders build their own team¿they’re the ones out there checking out other boarders,” says Cutler. “We’re trying to build a family and retain very close interaction with all the team members. The relationship is very informal because it’s important the team doesn’t feel like they’re just part of a business relationship. Most of the time spent with the team is outside the office. I personally talk to each of them at least once a week, and Team Manager Andy Meade probably talks to every member every day.”

Cutler adds that most of the team live in So Cal, and that San Francisco-based Danny Gonzalez comes down every few weeks. But there is neither a strategy to restrict the team to So Cal, nor plans to widen the geographic base. “We pick team members for their spirit and attitude,” says Cutler. “Individualism and talent are the two driving features. We don’t really care where they live. One of our team’s strengths and what makes it so essential is just how different the members are as individuals. Take Rodney Mullen and Gershon Mosley: Rodney is a super-genius businessperson, but as long as he keeps giving, kids will keep looking up to him; Gershon is purely driven by love of skating, doesn’t care much for contests, and has no desire to be a media star.”

Globe keeps the team’s personalities in front of the consumers by being a major skate-media advertiser with regular gatefold spreads. Cutler feels this print advertising is effective in projecting the individual team personalities. Extensive print advertising also allows the brand to “dangle a carrot” in front of consumers to keep up excitement for new products.

Cutler anticipates increasing the focus on Internet and interactive marketing. At ASR in Sepember, Globe will release a full-length CD ROM, something he describes as “an expensive undertaking, but signaling a definite shift toward interactive marketing.” He remains skeptical about e-commerce, however, especially given the company’s reliance on distribution and brand building through ‘core skate stores.

The company already has about 850 accounts, but Valenitne sees plenty more room to expand. “We believe we can continue our present level of growth through additional sales in these stores and through opening up new ‘core stores where we’re not yet represented,” he says. Valentine counters the argument that the launch of Gallaz was a ploy to grow the company by adding a new line, rather than by developing Globe further: “If we were just looking for bottom-line growth, we wouldn’t have declined to include Mooks under Globe U.S. We have no short- or medium-term plans for other lines. I think we still have endless opportunities for Globe and Gallaz. I don’t see any signs of sales for Globe plateauing, and our two current lines are where we’ll focus all our concentration.”

The Gallaz line, launched this spring at ASR, came about after Globe discovered its gray-and-white Option model was a top-selling skate shoe among women. Further research showed that while women buy nine times as many shoes as men, most women visit skate stores only in the company of their boyfriends. “We wanted to create ownership of a product for women,” says Cutler, who thinks the line could make as big an impact for Globe as Roxy does for Quiksilver. “I think people were shocked by how ‘ungirly’ the product is.”

The brand has its own offices within Globe U.S., and is staffed entirely by women, who are responsible for the majority of brand decisions. But despite their independence, Gallaz staffers will be expected to develop the brand in the way Globe has always done things. “They’ll have the same requirements to launch the brand slowly and be totally responsive to the market, taking it step by step,” says Valentine. “Gallaz will use the same path to success that we’ve shown to work.”

ble for the majority of brand decisions. But despite their independence, Gallaz staffers will be expected to develop the brand in the way Globe has always done things. “They’ll have the same requirements to launch the brand slowly and be totally responsive to the market, taking it step by step,” says Valentine. “Gallaz will use the same path to success that we’ve shown to work.”

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