A Case Study and Introduction to a New Outdoor Brand | HOLO Footwear

Source: HOLO Footwear

arch attempts to find a path to discussions on new brands. What typically happens is I see the brand out in the wild and then I begin to research the company. I look at articles and follow the founders quietly. I attempt to remain unbiased by not engaging founders of small brands and not inboxing and reaching out to employees and C-Suites of larger companies. This enables me to make a hypothesis and come to conclusions about brands. If I’m wrong in my assumptions/analysis it’s not because of information from other sources, but because of my own time and effort. This enables me to predict how a brand will progress in their journey more accurately.

Why is this important to note in this introductory post on HOLO footwear? I have been asked about the brand since its inception in 2020. I’m a skeptic and a turtle. That means I slow things down before I buy into or believe what is being sold. My first introduction was a year after attending a conference on sustainability in Los Angeles. I went on to visit the BLOOM facility and I began documenting sustainability in the sneaker and footwear industry. Once I saw that HOLO was an eco-friendly brand, I began digging. When the words sustainable appear I’m always hesitant to buy into the label, especially when the price point is too low. Making a product more sustainable doesn’t have to be expensive, but as an analyst, I’m different than other analysts. I’ve owned footwear brands and I understand the cost of production. Times have changed and utilizing PET and recycled materials is much less expensive than when arch was a footwear company. I say this to explain why I was slow in writing about HOLO. The pricing was far too low. That shouldn’t have been a bad thing, but I’ve covered brands that are using materials like Braskem, Mirum, Clarus and the pricing of those brands with truly sustainable footwear are much more expensive, so I paused on HOLO.

HOLO, over the last three years, has slowly increased their SRP from an average of 64 dollars to 100 dollars with the Troy Mid. This was a sign that the brand was showing a shift. Which is important because after writing about the problems with the SAC/HIGG MSI, I was focusing on sustainability with a more critical eye and HOLO as a small, minority owned brand appeared to be green-washing and I did not want that to be the first thing I wrote about the brand.

Brands Utilizing SAC/HIGG MSI as Evidence of Sustainability Will Have to Adjust Claims 

Instead of dropping a post and having to call out the brand and then investigate, I avoided writing something which could be seen as negative. I also avoided writing about the brand because for two years there wasn’t a website, but the footwear was being carried at Nordstrom. I found this to be incredible. Why would the lack of a website prevent me from documenting and sharing a post on HOLO?

When the company added wholesale accounts with REI and Macy’s I took notice, but there still wasn’t a website and I thought this to be peculiar. A brand without a website always feels like a dropship brand from China. No website is a red flag. Then 2022 happened and slowly as the site became more active, the company moved from Portland to the Midwest. The governor of Michigan touted the new jobs and opportunities. I finally realized I had to give HOLO an analysis.

Upstart vs Legacy

In HOLO, I saw an opportunity to measure an upstart outdoor brand against an industry leader. Merrell is rooted in the same state that HOLO moved into. Juxtaposing and finding a way to discuss HOLO with Merrell to generate a discussion came together. HOLO presents what I call an erosion factor to the industry giant. I could label this as a corrosive factor. Merrell is a big company and a leader in the outdoor arena. While the brand is a shining star inside of Wolverine Worldwide, the parent company is going through a round of layoffs. Merrell has hired a new CMO and inventories are increasing. I compare this to a recent discussion on Nike. I explained the Swoosh was a castle protected by a moat. I then used the analogy of slow erosion by upstarts like On and Brooks.

HOLO moved to Grand Rapids, Michigan. With the brand in the same state as Merrell and being celebrated by the government for bringing in jobs, could this chip into Merrell’s foundation? Some of the older styles from HOLO at retail look a lot like Merrell. While Merrell is a giant next to HOLO (I don’t know HOLO’s income) the footwear showing up in the same locations as Merrell helped to build out an analysis/introduction.

3 Points of Consideration

As always, I look towards resale as an indicator of brand heat and brand recognition. Do not think about resale as you would with Nike and hyped products. I’m talking arbitrage and brand sell through at retail which leads to closeouts and products finding their way on to 3rd party platforms. A healthy company will allow MAP to be reduced after a specific amount of time. If the brand is a solid company, this will lead to an ability to find data for sneakers being sold on a variety of sites from Amazon to eBay. HOLO isn’t very big, but with distribution at a variety of big retailers, there is enough product available to gauge interest.

1. Results for “holo footwear” at REI | REI Co-op REI carries HOLO next to the abundance of brands they have. The company currently has 13 listings for HOLO. 3 of the products show up on deep discount. 23% of SKUs isn’t bad at all for a startup outdoor brand. Remember the erosion factor? HOLO next to Merrell creates an opportunity for disruption.
2. HOLO Footwear Men’s Artemis Trail Runner – HOLO Footwear (holofootwearinc.com) HOLO’s e-commerce is new. I measure brands on a 3–5-year window when looking at how the brand is performing online. HOLO has had under a year to generate traffic and funnel traffic to their site. In a number of articles online, HOLO’s founder speaks about being intentional with their support of their wholesale partners. Hence the small number of visitors to the site (see below). This is also why there aren’t many styles with broken sizes on the site.

3. The absence of 3rd party data and the overabundance of promotional items on Nordstrom.com Nordstrom is the oldest account HOLO has in wholesale. One quick glance at the product on the site is troubling. There are 15 listings. Only 4 of these items is listed at SRP. Every style carried is at 35% off. This could be for two reasons, since this is the oldest account Nordstrom has been allowed to decrease the price, or the shoes aren’t selling through very well. I would have to assume that HOLO isn’t capable of taking on RTVs to prevent a steep discount of their product which is also potentially a problem. Without a strong and active DTC channel, taking the product back from their wholesale accounts could collapse the company.

The final aspect of this introduction/analysis is the lack of 3rd party. Why would this be concerning? When prices have been reduced at a store like Nordstrom, arbitrage comes into play. The same buyers who browse and purchase products to be resold at Marshalls are the same people who visit Nordstrom’s Rack and any retailer with deep discounts. With a 35% markdown, there is room for a buyer to potentially sell these products on a platform like eBay. Look below and you’ll find three listings. The average price is incorrect as it contains anomalies. There have only been three sneakers sold in 3rd party under Men’s+HOLO Footwear. The average price is actually 50.61 cents.

By comparison, a brand launched last year, Ponto, using the keywords Ponto Sneaker+Men’s shows 11 pair sold with zero anomalies. The average sold price is equal, but by my estimate Ponto is reaching a larger audience faster without any wholesale. Note the dates of these two data dives.

The Wrap-Up

HOLO is an impressive startup. According to Pitch Book the brand has garnered almost 3 million in funding. They’ve landed in some of the biggest and best retailers in the world. The brand has also become a rising tide in Grand Rapids, Michigan. With the information presented here what do you think of the brand? Do you like the style and pricing? Do you predict that this brand could become a thorn in the side of Merrell? I’ve avoided using the fact that it’s minority owned throughout this post to allow you to come to your own decision about showing support, but it appears HOLO is trending in the right direction. There oldest account is showing a lot of promotional energy, but their newer accounts aren’t. They are increasing the SRP and the site holds their visitors for six minutes (which is unheard of for a startup not in social media). Is HOLO on the rise?

Notes from Pitch Book: