Can UGG Australia Continue Its Rapid Growth?

August 26, 2013 — Leave a comment

UGG Australia took off in 2000, when Oprah Winfrey included the boots in the annual listing of her favorite things. Suddenly UGGS were a smashing success. They became a fashion must-have especially with college and high school girls. UGG Australia was one of the fastest growing brands of the past decade. The Oprah buzz was just one of the reason’s for the UGG Brand’s rise to fame. In 2003, Footwear News magazine named UGG Australia “Brand of the Year.” Other celebrities wore the boots on television and movies including Kate Hudson, Jessica Simpson, Kate Moss, Pamela Anderson and Kim Cattrall. It seems that UGGS are on every young girls Christmas shopping list. Experian reports that UGGS was the number one searched term during the 2012 holiday shopping season. Sales exceeded $1 Billion worldwide in 2012.

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The origins of Australian sheepskin boots is tough to trace.  Surfers wore sheepskins to keep their feet warm after catching a wave before they were ever commercially produced. UGGS as we know them landed in the US with the Aussie surfer Brian Smith, who hauled a few dozen pairs of his UGG Australia-brand boots to California in 1978.

The boots attracted a devoted clientele in California surf shops and speciality stores. When winter came along, UGG boots were sold in ski shops and were seen in lodges from Mammoth to Aspen. By the mid 1980’s, The UGG Brand became a symbol of relaxed California culture.

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UGG didn’t find a mainstream audience until Deckers Outdoor Corporation bought the brand for $15 million in 1995. Decker’s bought the brand to complement its successful Teva sandal business. At the time, the company wanted a product line they could sell in the winter and keep their sales force busy. Under Deckers, UGG evolved from a brand focused on an outdoor lifestyle into a fashion powerhouse. From 1995 to 2012, UGG sales grew from $18.3 million to over $1 Billion.

For years, many people have predicted the demise of the UGG Brand. 2012, was the first year that UGGS sales didn’t increase. The challenge for UGG Australian going forward is convincing consumers to buy more products than just boots. UGG has expanded into a number of product categories including sneakers, leather coats, gloves and handbags. UGG has also launched a men’s line and uses New England Patriots Quarterback Tom Brady as the spokesperson. Going forward, UGG Australia will need to focus on creating a true lifestyle brand that can become an umbrella for a range of products.

Have UGG Australia sales peaked? 

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