It was a good product with a catchy name, but the rollout was all
wrong. Greg Tunney knew the Terrasoles brand had great potential for R.G. Barry Corp. But he also knew if the company’s newest
brand was ever going to reach its potential, they’d have to start
over. From scratch. Immediately.
“We literally pulled it off the shelves for a year and killed it,” says
Tunney, president and CEO of the Pickerington-based company.
“We took it out of the marketplace. Then we dusted off that little
brand called Terrasoles, repositioned it, and went after a whole different marketplace with it and a completely different price point.”
The response was immediate. Last fall, 235 outdoor-themed
retailers across the country, including L.L. Bean, signed on to carry
Terrasoles, and sell-throughs nearly doubled expectations.
“The people we’re going after never heard the name
Terrasoles in their life,” Tunney says. “It was completely new
to them.”
That was a good thing. After all, the reason the previous rollout
had been so disastrous was because R.G. Barry, a company long-known for its Dearfoams brand of slippers, had tried to make
Terrasoles, a vastly different, outdoor-themed line of footwear,
part of the family.
“They had Dearfoamized it and killed it,” says Tunney, who
joined R.G. Barry in February 2006, after turnaround artist
Tom Von Lehman spent two years saving the company from
near-bankruptcy.
To ensure nothing else would be “Dearfoamized” at R.G.
Barry again, Tunney has taken some drastic steps since joining
the company. He relegated the Dearfoams staff to its previous
job of designing slippers and built a completely separate division for Terrasoles. He recruited outsiders for all the key positions at Terrasoles — the brand president, designer and marketing team — and even contracted with independent sales
reps to hawk the brand to retailers in the outdoor industry.
“We didn’t use anybody from inside here,” Tunney says, noting that a clear separation between the brands is vital for
Terrasoles ongoing success.
“We wouldn’t even want them having lunch with the
Dearfoams people,” Tunney says. “We say that tongue-in-cheek, but we really mean it. In today’s marketplace, the consumer can sense and smell authenticity a mile away. Unless
your brand is true to its core, true to its DNA, the consumer
will sniff it out in a minute.”
That’s why Terrasoles had to be rebuilt from the ground up.
It’s a reincarnation strategy that Tunney is applying with success throughout R.G. Barry these days. And it’s a key reason the
$105 million company, which was chin-deep in red ink just a few
years ago, has rebounded to record net earnings of $25.1 million in fiscal 2007.
“This is probably a Harvard business case as far as successful turnarounds go,” Tunney says. “Within the apparel footwear
companies, it’s probably one of the top turnarounds I’ve seen
in the last 20 years.”
The Turnaround Management Association appears to agree. The
international organization of business turnaround specialists
named R.G. Barry its 2006 midsize turnaround of the year.
Here’s why Tunney is sure R.G. Barry is back on its feet and
what he’s doing to make sure the accessory footwear developer won’t stumble significantly again.