Financially struggling brands are taking a shot at reinventing the footwear industry, as they seek to capture consumers’ attention and retain a coveted place in the market.
The world’s biggest brand has invested $100 million into an Australian footwear brand, Teva Sandals, which it hopes will attract new customers to its line of high-performance, high-fashion footwear, the company said in a statement on Thursday.
The footwear line was launched in 2013 and Teva has become a household name for female athletes in recent years, with its high-end shoe range becoming one of the most recognisable brands in the world.
It is expected to be one of Teva’s most profitable products, with a forecast profit of about $1.4 billion (AU$1.9 billion) for the three months to the end of March, according to analysts at J.P. Morgan Asset Management.
Teva’s new footwear line is one of three footwear lines being developed by Teva.
The other two are the high-quality women’s shoes and women’s trainers, and the company is also developing an innovative new men’s footwear line, which Teva will sell exclusively to athletes.
“The opportunity for Teva is to be at the forefront of footwear innovation in Australia, and that’s a good thing,” Teva chief executive Chris Pang told analysts.
“We have a very strong core of strong brands, including Nike, that we think can be a strong competitor for our competitors.”
The new footwear brands have been unveiled alongside Teva in a partnership with The Australian Brand, which was formed in 2011 and will be run by former Australian Olympic swimmer Sarah Dutton.
Nike is one partner, with other brands including Adidas and Reebok.
The Australian Brand’s chief executive, David Lebovic, said the partnership would help Teva build a brand that “delivers a great value proposition for the consumer”.
“The partnership with Teva marks a very significant step forward for our brand, and a fantastic opportunity for us to grow our brand with great brand recognition,” he said.
Nike has been a major player in the Australian market for several years, including its $7 billion acquisition of the Australian footwear company Vibram FiveFingers in 2013.
The company has been growing its footwear business by around 15 per cent a year since 2013, according the Australian Brand.
“We believe that the partnership with Nike will deliver the brand a strong foothold in the emerging Australian market, with an opportunity to continue its momentum,” Lebovic said.
Teva has also been aggressively expanding its footwear range, with the introduction of high quality women’s and men’s shoes, trainers and sandals last year.
In a separate statement, the Australian Brands board said it welcomed the announcement of the partnership between Teva and the Australian brands, but it had yet to decide how the investment would be invested.
“In our view, the partnership will provide the company with the necessary flexibility and capital to build its footwear portfolio, but we have yet to have a clear vision of how the investments will be spent,” it said.
Teva’s new women’s footwear, for example, will be available in a range of colours including gold, silver and copper, with gold being Tevas best-selling colour.
Its men’s and children’s footwear will be sold in four-wheel drive, as well as in high-gloss, high gloss, leather and sandal colours.
The new Teva footwear will also feature a range that has not been seen in the company’s range in many years.
It will be made in the same way as the shoes made by the Australian brand, with some of the same colours and materials.