Ugh! Ugg backlash

By Stephanie Kang
The Wall Street Journal

For the past two years, Ugg boots have been a manufacturer's dream. Smooth-on-the-outside and fuzzy-on-the-inside, the sheepskin creations won a thumbs-up from Oprah, waiting lists at many retail shops and a seemingly endless parade of celebrities photographed in their heel-less clodhoppers.

But it didn't take long for the zeitgeist to rise up and retaliate against what it had created: Fashion magazines and TV shows that once showcased Uggs have moved on to cowboy boots, vintage-rock T-shirts and other trends. Defamer.com, the influential Los Angeles gossip Web site, has called them "the human rights violation known as 'Ugg boots'" and in May, it declared its "obsession with trying to futilely beat the fuzzy-footed fashion slaves who wore them."

The situation presents executives at Deckers Outdoor Corp., Ugg's manufacturer, with a marketing challenge: What happens to an "It" item the year after it was "It"?

Deckers, based in Goleta, Calif., has responded by unleashing a slew of new Uggs products in hopes of transforming it into a full-fledged brand, not just a super-hot fad. Holiday shoppers in stores like Neiman Marcus and Marshall Fields will find Ugg boots in about 20 different styles, including studded, embroidered, buckled and covered in Gore-Tex. Prices range from $40 for a tiny infant Ugg bootie to $300 for bushy "Fluff Mommas." Deckers also has rolled out or expanded lines of slippers, clogs and moccasins and is looking to expand further in sizes for men and children. The company also wants to grow in the Southeast and abroad.

But it won't be easy for Deckers to repeat Ugg's success of recent years. A mix of short supply and strong demand, pumped up by photographs of Ugg-clad celebrities such as Gwyneth Paltrow and Kate Hudson, resulted in a frenzy for the flat-footed boots and helped fuel much of Deckers' meteoric sales growth in 2004.

Now, Deckers' President Angel Martinez says the company is focused on leveling the highs and lows. "The difference between a brand and an item is a brand has sustainability and evolves with consumer preference," he says. "We continue to bring new consumers to the franchise with ongoing product development."

Ugg also is branching out beyond footwear. It recently launched leather- and sheepskin-lined handbags, coats, vests, hats, gloves and scarves, which, in many cases, start at prices far above the $120 price tag for the classic Ugg boot.