Independent family footwear retailer Tradehome Shoes, which celebrated its 100th anniversary last year, is in rapid expansion mode, launching new stores across the U.S.
So far in 2022, Tradehome has opened five locations — in Rogers, Ark.; Spokane, Wash.; Columbus and Cincinnati, Ohio; and Vienna, W.V.
Another two stores will bow this month, in the Mall of America in Bloomington, Minn.; and in Chattanooga, Tenn., followed by two more doors later in the year. That will give the company a total of 132 doors in 23 states by year’s end. And in 2023 and the years to come, it aims to add 10 to 12 stores annually.
At a time when many shoe retailers have closed their doors or been acquired by national chains, Tradehome has bucked the trend, posting record sales numbers in 2021, according to president and CEO Justin Kehrwald. “Previously, 2019 had been the strongest year for us. And we beat 2019 by 46% in 2021,” he said, adding that growth has come from same-store performance as well as new markets.
Founded in 1921 in Superior, Wis., Tradehome Shoes is now headquartered in Cottage Grove, Minn., a suburb of Minneapolis. For the majority if its history, the company was privately owned, but in 2014, it transitioned to being 100% employee owned, or what is referred to as an ESOP, whereby all Tradehome workers have shares in the company and receive profits directly.
Corporate strategy is made at the executive level, though as Lorne Streiff, director of marketing and e-commerce, pointed out, “As a leadership group, we look at our role as being the support staff for the stores and the personnel. I believe that helps them to feel appreciated. And so our turnover is much lower than the industry average. Once people find us, they like to stick with us.” (Tradehome also pays 20-25% above the starting wage in the communities where it opens.)
And the fact that workers have a vested interest in the business also has helped weather the supply chain crunch, explained Kehrwald. “Our warehouse employees are owners as well, so they see it as a badge of honor when we get a product out and it sells well, even before the brand has posted it on their site,” he said.
Other than the ownership structure, Kehrwald said Tradehome has a traditional business model based on fitting customers and providing high-level service. “We try really hard to deliver the old-school, independent shoe retailer service. We just do it in highly foot-trafficked shopping centers,” he said.
The average store layout is 1,300 square feet of showroom space and 1,300 square feet of stockroom. Tradehome also operates a nascent e-commerce site that launched in 2020 and serves as a complement to the brick-and-mortar stores.
As the company continues to expand, localization is a key piece of its strategy. Each store has an owner-operator who is empowered to create a regional-specific assortment and develop their own floor plan, and forge partnerships with local medical professionals, nonprofits or running groups. “We really want them to feel like they are the face of the company in each of our markets,” said Kehrwald.
The company also strives to offer a unique selection of top brands, including sneakers from Hoka One One, Brooks and On, and casual looks from Birkenstock, Hey Dude and many others.
Brand partners say the Tradehome formula is beneficial on multiple fronts.
“Full-service retailers like Tradehome help drive brand awareness and create brand loyalty,” said Katie Wagner, VP of Americas sales for Hey Dude. “We’ve seen high conversion rates of our new product introductions at retailers like Tradehome, and that has a lot to do with the trust associates have built with their customers to make product recommendations that exceed expectations.”
While Tradehome is bullish on its future prospects, its leaders acknowledge that the competitive landscape has changed with more brands going direct to consumer. Kehrwald said his team has had “tough conversations” with vendors about price integrity and consumer acquisition, and have cut ties with some that treated the retailer as a competitor rather than a partner.
Ultimately, though, Kehrwald and Streiff — who both started on the sales floor — believe the responsibility lies with the stores. “Our analogy has always been, it’s not the gate going up, it’s the curtain going up,” said Streiff. “You have to create an environment that invites people in.”
Added Kehrwald, “If someone buys a shoe from Zappos that we carry, shame on us for not being entertaining enough to shop with us.”