One of the first instances of visible “statement socks” in the mainstream media was a photograph of George H. W. Bush wearing vibrant, pink socks with a dark gray suit. This was the first time that many recognized the progression and appreciation of the ‘statement sock’ in the men’s fashion scene. Many men today have embraced this trend, seeing it as an opportunity to follow conservative work dress codes while still maintaining some level of individuality, with a splash of color around the ankles.
With this trend maintaining its upward swing in the men’s fashion department, it was only common sense for businesses to seize this opportunity to become involved in the sock industry. Wasting no time, Shoes.com, a Canadian-based, multimillion-dollar online shoe retailer, acquired Richer Poorer, a smaller and less-established sock company based in San Juan Capistrano, California. While the terms of the buyout were not disclosed, it can be established that Richer Poorer has revenues that were known to be under $10 million a year, in comparison to Shoes.com’s annual revenue standing in the $250 million range.
Shoes.com Chief Executive Roger Hardy defended and explained the bold buyout, saying, “Richer Poorer has built a culture founded on hard work and hustle and a brand that resonates with the Shoes.com customer.” In addition to supporting the hard work that Hardy saw in the fledgling company, the main factor driving the sale seemed to be the emerging market of everyday commodities, such as socks and ties, into bold fashion statements that require high quality of materials and attention to detail. The buyout of Richer Poorer allowed Shoes.com to diversify their reach into the footwear market, and gain greater success. Marshal Cohen, a retail analyst with The NPD Group, called the blending of these companies a perfect marriage, and commended the effort of Shoes.com to round out their range of products and “become a lifestyle retailer”.
Richer Poorer was launched in late 2010, by Iva Pawling and Tim Morse. It is a fairly new company, which is a stark contrast to Shoes.com, who has over 21 years of experience. Neither Pawling nor Morse had any experience in the sock industry, as they were only friends that first met at a spin class, who then became business partners. Pawling’s experience was in brand building, starting in public relations at Kate Spade, and moving over to vice president of brand development for Gorjana. Morse’s experience lay in technology, working in the tech-scape of Northern California. But his true interests were always in fashion and lifestyle companies, working in the marketing department of a sportswear company at one time. And when the both of them found out about the vacuum that existed in men’s fashion socks, they decided to be the ones to fill the void, especially with the increase in the sock craze that was furthered by a line of ‘Elite’ Nike socks that were sold in bold prints and colors.
But other than a new push by large and established companies with limited options and various products in addition to socks, there was nothing to build on. The sock craze was uncharted territory for fashion lines, with only one solid company to look to for direction. Stance, founded in 2009, sold over 15 million socks in its first four years. Stance was later named the official sock company of the NBA in the 2015-2016 season.
In April 2010, Pawling and Morse developed their business plans for their socks, and in December 2010 they launched, the timing almost perfect. The economic recession was officially over, with many people grateful that the worst was finally over. Socks were an inexpensive luxury item, with Richer Poorer’s priced at a reasonable $12. They were an appealing option for those still trying to get back on their feet.
In addition to timing, Pawling and Morse carefully chose a manufacturer. Their socks were made primarily in South Korea, meaning that a free trade agreement, which guaranteed a 13.5% tariff on the socks, would be waived.
Originally launching with only 30 accounts originally, Richer Poorer grew immediately. Major retailers have started carrying Richer Poorer merchandise, including Bloomingdales, Nordstrom, American Rag, and Free People, with over 800 retailers globally. This growth has also allowed Richer Poorer to expand their offerings from just men’s socks. By the end of 2013, they began offering women’s and children’s socks as part of their selection, and by 2014, their lines included men’s underwear and athletic socks. They also plan on launching T-shirts in the near future.
The company recognizes that its rapid growth since its first launching has been helped by the resurgence of men’s fashion, and the idea that “socks are the new power tie”. And with this growth, Richer Poorer’s Pawling and Morse have been on the lookout for new investors to continue their business’s expansion. They first approached Shoes.com as an investor in their sock company, which naturally developed into an acquisition.
It seems that the marriage of socks and shoes has come naturally. Morse is supportive of the mutual benefits of the merge, with Shoes.com’s website having a larger customer base. Morse has said, “We are pairing the cool of our company with someone who has an understanding of the transactional relationship with 10 million to 12 million consumers. That can create lightning in a bottle.”
It seems that Shoes.com has an abundance of tools available to grow Richer Poorer’s retail presence, and increase its online commerce. Pawling says, “We are building a lifestyle brand that started in socks.”
With a new toolshed of resources, Richer Poorer seems posed to continue their desired growth, with staff growing by 20%, and with many more expected to be added by the end of the year.