JUNE 22, 2002
Vans: Skating on Air
Fourteen year-old boys have three things on their mind: sports, music, and girls. Our goal is to own the first two . . . the third, we’ll let the kids handle on their own. — Gary Schoenfeld, president and CEO of Vans
Early evening April 22, 2002: Gary Schoenfeld, the CEO of Vans, was standing in the middle of the star-studded, invitation-only crowd that had turned out for the Hollywood premiere of Dogtown and Z-Boys, a documentary about the history of skateboarding. Smiling, Schoenfeld noticed that many in the crowd were wearing the specially-designed Dogtown shoes the company had sent to all invitees.
Vans was best known for selling footwear and apparel to skateboarders and surfers; the company also sold products for other alternative sports, including snowboarding, BMX bike-riding, motocross, TM
wakeboarding, and supercross (Vans called these activities “Core Sports “; see Figure A for a description of each sport). Vans had financed the Dogtown film at the request of one of its sponsored athletes, skateboarding pioneer Stacy Peralta.
Now, as Schoenfeld looked over the crowd, he could not help but feel a sense of satisfaction. After seven years at Vans, Schoenfeld had managed to turn the company around, revitalizing the brand and transforming Vans into a $350 million business (see Exhibits 1 through 3 for additional financial information). In a market in which the customers were notoriously fickle and few brands ever topped $100 million in annual sales, this was quite an accomplishment. At the same time, Schoenfeld was keenly aware of how fleeting success could be. Exactly 20 years before, the company had gotten a big boost from another movie, a cult classic called Fast Times at Ridgemont High. Eager to capitalize on the increased demand for its products, Vans had expanded too rapidly and had ended up in bankruptcy. While Schoenfeld was determined not to repeat the mistakes of the past, he felt strongly that Vans was at a crossroads: I believe that at $350 million, we’re not maxed out. I look at Nike as a $9 billion brand. Can we be 10% of what Nike is? Yes, that doesn’t feel uncomfortable to me. On the other hand, I’m not running the business to become a $1 billion company. We’ve got to proceed incrementally, so as not to alienate our core customer base.
________________________________________________________________________________________________________________ Senior Researcher David Kiron of the Global Research Group prepared this case under the supervision of Professor Youngme Moon. Authors give thanks to Research Associate Brenda Cheng for her assistance. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
Vans: Skating on Air
Already, Schoenfeld had broadened Vans’ product assortment and expanded its distribution system. The company now sold everything from women’s sandals to outdoor hiking shoes, in retail outlets ranging from company-owned stores to mass-market chains such as Foot Locker and J.C. Penney. The company was also involved in a number of entertainment-related ventures: In addition to financing Dogtown, Vans operated a snowboarding camp in Oregon, it licensed content to videogame developers for Microsoft’s Xbox and Sony’s Playstation, and it was in the process of starting...
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