Footwear Insight

s &OOTWEAR )NSIGHT ^ *ANUARY&EBRUARY FOOTWEARINSIGHTCOM Re-interpreting Comfort By Bob McGee S eventy years after its incep- tion in a Columbus, OH, loft by a woman with a penchant for innovation and comfort, Dearfoams' parent RG Barry is devel- oping a growth strategy it hopes will deliver trend relevant designs for both its core 35-plus-year-old consumers and Millennials and make them available beyond traditional brick-and-mortar locations. "This is not only about respecting the past but also rejuvenating it and bringing it forward to the consumer in fresh ways," proclaims Bob Mullaney, the 20-year shoe industry veteran who was named president and CEO of the small Pickerington, OH, company in November. Over the last decade, RG Barry, named for the sons of founder Florence Z. Melton and the son of an early inves- tor, has gone through tremendous change. The first was the loss of Melton at age 95 in 2007. It was her patent for the Dearfoam slipper and 17 others for everything from cushioning devices for exercise machines to shoulder pads using material that Firestone provided for the helmets worn by tank crews during World War II, that were the basis for the company. According to her obituary, her patent for the foam rubber slipper expired in 1968. Later in life, Melton, whose family migrated to the U.S. to escape the persecution of Jews in Russia in the late 1890s, was involved in philanthropic endeavors that included the establishment of a Hebrew education system across 60 cities in six countries. Her son, Gordon B. Zacks, who joined the family-owned company in 1955 and helmed it first as president in 1965 followed by chairman and CEO in 1979 died on February 1, 2014. Four months later, RG Barry, publicly traded since 1962, agreed to be acquired by an affiliate of Mill Road Capital, MRGB Holdings, for $215 million. The deal, completed in September 2014, divided its equity ownership among Mill Road (50 percent), an affiliate of Blackstone Tactical Opportunities (48 percent) and a consortium of institutional investors (two percent). Among Mill Road's other current investments are: Skullcandy, Noodles & Company and Destination Maternity. But Mullaney, who previously spear- headed Shoebuy.com (now known as Shoes.com) and The Rockport Company when it was owned by the Adidas Group, is strictly focused on taking RG Barry to the next level before its 75th anniversary in 2022. That growth path may or may not include acquisitions. "Any acquisition has to complement our business or our current business structure," Mullaney declared during a recent podcast with Sports Insight Extra. Currently, only a couple months on the job, Mullaney declares RG Barry's focus is on how it can respect its past but also "re-imagine and rejuvenate products, expressions and how we can solve prob- lems for the consumer." Beyond its mainstay brand Dearfoams, which accounted for 74 and 79 percent of annual revenues in FY13 and FY12 (the last two years that sales figures were made public in filings), Barry owns comfort insert business unit Foot Petals and Baggallini, which markets handbags, totes, and other accessories aimed at women ages 34-55. In FY12, overall com- pany revenues approached $160 million. With Mullaney at work developing a corporate strategy for FY19 that is likely to embrace innovation, RG Barry recently got a financial lift from its cor- porate hometown that will enable it to renovate and expand its corporate headquarters. In mid-December, the city of Pickerington agreed to provide the company with $400,000 for building improvements in exchange for a promise to remain in the mid-Ohio community for the next 15 years and increase its work- force there by 20 percent by 2023. O RG Barry's focus as a company is on how it can respect its past but also re-imagine and rejuvenate its products. Dearfoams accounts for the majority of RG Barry's business. PROFILE Listen to a Sports Insight Extra podcast with RG Barry's Bob Mullaney at sportsinsightextra.com/podcast.html

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