Ecco Sko A/S

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Ecco Sko A/S

Industrivej 5
Bredebro
DK-6261
Denmark
Telephone: (+45) 74 91 16 25
Fax: (+45) 74 71 03 60
Web site: http://www.ecco.com

Public Company
Incorporated: 1963
Employees: 9,000
Sales: $493.9 million (2002)
NAIC: 316219 Other Footwear Manufacturing

Ecco Sko A/S is one of the world's top ten shoemakers and a worldwide leader in the "comfort" shoe segment. Based in Denmark, Ecco is also one of the few fully vertically integrated shoemakers, controlling the entire shoemaking process from tanning to design to manufacturing and even retail sales. The company produces casual, classic, and sportswear shoes for men, women and children, as well as clothing and accessories. Ecco's production takes place in a number of factories around the world, including Denmark, Portugal, Brazil, Indonesia, Thailand, China, and Poland. Together, the company's plants turn out some 12 million shoes each year. The company also operates sales and distribution subsidiaries around the world, including in the United States, Europe, and Australasia. In addition, Ecco has long played a pioneering role in the use of automated production techniques, and its robot-equipped production lines have been compared to those of the automotive industry. The automated production process enables the company to produce shoes exactly to its specifications, underscoring its commitment to quality. To complement its manufacturing base, Ecco operates research and development and design centers in Denmark and elsewhere. Its shoes are available at more than 1,000 retail stores worldwide, including some 500 franchised Ecco-branded stores. The company also owns and operates two flagship stores, one in London and the other in San Francisco, where it presents its full line of shoes, clothing, and accessories. These two stores also serve as test-marketing outlets. The United States, Germany, and Sweden are the company's major markets, and some 90 percent of its sales of approximately $500 million come from outside of Denmark. In the early 2000s, the company has been expanding its traditional markets—the 30-to 49 year-old segment—launching the Receptor sports shoe line, a children's shoe line, and other designs to attract more youthful segments. Founder Karl Toosbury remains at the head of the company, which is wholly owned by the Toosbury family.

A More Comfortable Shoe for the 1960s

Karl Toosbury sold his home and his car in order to set up a shoemaking business in Bredebro, in the Danish countryside. Joined by wife Birte and later by daughter Hanni, Toosbury set out to produce a new breed of more comfortable, high-quality shoe. Toosbury named his company Eccolet Sko and created the brand name Ecco. Production began in 1963 and found a ready market. By 1965, the company had already expanded its factory.

Toosbury himself played the major role in the company's fast-growing sales, traveling extensively to promote its brands and designs. Word of the new type of shoe quickly reached the other Scandinavian markets, and in 1966 Eccolet began exporting shoes to Sweden, Finland, and Norway. From there, the company extended its sales into the rest of Europe, with Germany providing a particularly receptive market for Ecco's "comfort" shoe styles.

From the start, Toosbury's emphasis on high quality and advanced design features led Eccolet into vertical integration. The company opened its own tannery, while investing in research and development and design initiatives. The latter played a role in the company's growing European sales. In 1968, for example, Eccolet produced its own version of the then fashionable knee-high boot.

Another strong success for the group came with the launch of a line of clogs in 1972. The clog collection remained a strong seller throughout that decade and was later revived at the beginning of the 2000s. The company's growing sales led it to expand its Bredebro factory again, stepping up production by some 20 percent in 1973.

Toosbury had also laid plans to develop an international manufacturing base, and in 1974 the company opened its first foreign production facility in Brazil. In order to maintain strict control of production quality, Eccolet adopted automated production techniques, becoming one of the first in the shoe industry to install CAD/CAM machinery and related equipment for its shoe production.

Eccolet's expanded production capacity positioned the company for its first big-hit shoe design, the Joker, launched in 1978. That shoe put the company on the map as a top producer of quality comfort shoes.

At the end of the decade, Ecco had become a fully international brand—more than 50 percent of its sales coming from outside of Denmark, with Sweden and Germany providing the strongest foreign markets. At the same time, Ecco had become something of the national shoe at home.

New Markets in the 1980s and 1990s

The launch of a new shoe design, Free, gave Eccolet a new hit in 1979. That design, a more youthful version of the Joker shoe, also became the first of the company's designs to sell more than a million pairs. The success of the Joker and Free designs helped carry the Ecco brand still farther abroad, and in 1981 the company agreed to license its brand to Japanese Achilles Corporation. The Japanese market proved highly receptive to the Danish shoe designs, and by the end of the decade Japanese Achilles had sold more than ten million pairs.

Back at home, Eccolet entered the retail arena as well in a bid to further its vertical integration. In 1983, the company oversaw the launch of the first Ecco store in Denmark. From there, the company expanded the chain worldwide to more than 500 franchised stores. Eccolet also developed an in-store boutique design, which was rolled out to department stores. At the same time, the company carefully courted the independent shoe retail channel.

In 1984, the company opened a new, larger production plant in Portugal. With some 1,200 employees, the new factory was capable of production levels as high as 18,000 shoes per day. The factory also incorporated new robotics technology, as the company continued its drive to achieve full automated production.

In 1986, Eccolet set up a new, dedicated sales and distribution subsidiary in Sweden. By then, the company had already begun to eye a new market: the United States. Eccolet's move into the United States came slowly, as the company began testing its designs in 1988.

Many European shoemakers had already attempted—and failed—to crack the U.S. market. Eccolet, however, carefully prepared its full-scale entry into the country. The company recognized the importance of building a good relationship with the independent retail channel, including providing strong sales support. Eccolet also spent some time observing the market and quickly reacted by adapting its own designs to match the U.S. consumer's preference for sportier shoe styles.

In 1990, Eccolet launched its U.S. subsidiary, Ecco USA, in Salem, Massachusetts. Marketing of the group's shoes was at first limited to the more Euro-centric Northeast region, yet California, with its openness to new styles and trends, became another important early market for the company in the United States.

Success was immediate, and just a year after its official launch, Ecco USA had already placed the company's stores in 120 different retail channels. Eccolet now began preparing the national rollout of the shoe brand, backed by new, sportier designs created to appeal to American tastes, such as the new Track outdoor shoe line launched in 1992.

Continued Success in the New Century

Eccolet's growing sales encouraged the company to add to its manufacturing base, opening a new facility in Indonesia in 1991. That plant, with 3,500 employees, became the company's largest. Two years later, Eccolet formed a new production and distribution joint venture, this time with Bangkok Rubber Co, a subsidiary of the Saha Group. Eccolet nonetheless controlled the new company at 95 percent.

Eccolet continued to experience success with such offerings as a line of sandals launched in 1994 and new classic women's and men's business shoe designs at the end of the 1990s. By then, Ecco—the company changed its name from Eccolet in 1999—had opened a new research center, called Futura, in the town of Tonder in Denmark. The company had also opened new production centers in Poland and in China.

Furthermore, Ecco made moves closer to consumers. In 1998, the company launched its first flagship store, on Oxford Street in London. The large-scale store featured the complete range of Ecco shoes, as well as accessories and clothing items, and provided a testing ground for new designs, as well as a means of generating feedback from the company's customers. The success of that location led the company to open a second flagship store in San Francisco.

By the turn of the 21st century, the United States had become Ecco's single largest market. The company recognized that success in the United States would also translate into higher sales elsewhere in the world. Therefore, Ecco was now determined to take on the giants of another important shoe category—sports shoes.

Company Perspectives:

Our business drive and thinking behind ECCO is the result of continuous new ideas, dynamism, capability, and forward movement—and about being part of our own movement.

The company released a new line of mountain/hiking boots in 2000. In 2001, Ecco unveiled a new sports shoe offering—the Receptor series of athletic shoes. The Receptor series tuned into the U.S. market's preference for casual shoes while maintaining the company's enhanced comfort features and high-quality standards. The success of the line encouraged Ecco to expand the series, adding golf shoes by 2003.

In 2004, the company prepared to take on industry leaders Nike, Reebok, and addidas with the launch of a new Receptor RXP series running shoe. Backing up that launch was a strategic alliance with sportswear maker Newline in January 2004. The company also announced plans to open a new manufacturing operation in India by September of that year. By then, the group had brought a new state-of-the-art tannery in Holland online. Ecco appeared set to step comfortably into the future as a global footwear leader.

Principal Subsidiaries

Ecco New Zealand Ltd.; Ecco Sweden AB; Ecco Thailand (95%); Ecco UK Ltd.; Ecco USA Inc.

Principal Competitors

Nike Inc.; adidas-Salomon AG; Reebok International Ltd.; Brown Shoe Company Inc.; C and J Clark Ltd.; Svit A.S.; Wolverine World Wide Inc.; Stride Rite Corp.; G.H. Bass and Company.

Key Dates:

1963:: Karl Toosbury establishes Eccolet Sko to manufacture shoes in Bredebro, Denmark.
1966:: The company begins exporting to Scandinavian markets.
1972:: A successful line of clogs is launched.
1974:: A production facility in Brazil is opened.
1981:: The company introduces Free design, its first million-seller, and enters the Japanese market through a production license to Japanese Achilles Corporation.
1983:: The first franchised Ecco retail store is opened.
1990:: A full scale entry into the United States begins with the opening of a subsidiary in Massachusetts.
1993:: A joint-venture manufacturing and distribution subsidiary in Thailand is created.
1999:: The company changes its name to Ecco Sko.
2001:: Receptor sports shoe line is launched.
2004:: Ecco Sko signs a strategic alliance with sportswear maker Newline and begins construction on a new production site in India.