Kenneth Cole: How the King of Sole Got Soul
For more than two decades, Kenneth Cole avoided the limelight. He built a $400 million shoe-and-clothing company, married the daughter of former New York Gov. Mario Cuomo and golfed with Bill Clinton. But unlike such competitors as Calvin Klein and Ralph Lauren, he refused to turn himself into a celebrity. Instead of featuring his face in company ads, he lent his name to social issues - AIDS, homelessness, gun control, abortion. Cite a public controversy, and Cole likely weighed in on it, often with humor and puns.
On guns, his ads proclaimed: "Regardless of the right to bear arms, we condemn the right to bare feet." On abortion: "Women have the right to be pregnant, but not barefoot." On homelessness, as part of a campaign to encourage customers to donate shoes they no longer wore: "Have a heart, give a sole."
Last fall, with the publication of his history of the company, Footnotes: What You Stand For Is More Important Than What You Stand In, the man behind the ads finally stepped out. During a promotional campaign for Footnotes, he spoke at Wharton under the auspices of Wharton Entrepreneurial Programs and the Musser-Shoemaker Leadership Lecture Series.
The message: His beliefs have been good for business. They have garnered attention for his company, New York-based Kenneth Cole Productions, and have benefited Cole as well, creating value in what he admits can be a frivolous trade. "Nobody needs what I sell," he says. "There is probably not a person in this country who needs another pair of black shoes. Nobody needs more ties, more white shirts. My job is to get people to feel good about buying [these products]...But at the end of the day, there are things that are more important."
He insists that the ads are neither cynical -- that is, designed to make customers feel good about themselves and righteous for buying his products -- nor political. "To the degree that you interpret what I'm doing as political, it potentially loses its validity. It's a corporate message, a community message and a human message," not a political one, he states.
A Permit to Sell Shoes
Cole grew up in the shoe business. His father owned a Brooklyn-based company called El Greco that became known for producing the Candies line of women's shoes. Cole attended Emory University in Atlanta with the goal of becoming a lawyer. But before enrolling in law school, he took a summer off to help his father, who had recently lost one of his top assistants. The son was hooked.
In 1982, he left to start his own company, then called Kenneth Cole Inc. He designed a line of shoes and hired an Italian factory to make them. That fall, he wanted to show off his wares at the industry's main trade show at a Hilton hotel in midtown Manhattan.
Designers had two options for showing off their products, Cole says. "You could be one of about 1,100 companies that took a little room at the Hilton. But that wasn't a great way to define yourself. Or you could set up a fancy showroom near the hotel. I clearly didn't have the money for that." So he hit upon the idea of borrowing a friend's tractor-trailer, parking it in front of the Hilton and peddling shoes from there. Unfortunately, that required a permit, which only the city could issue.
"I called the mayor's office and said, 'How does someone get permission to park a 40-foot trailer on the street in New York ?" And they said, 'The answer, son, is that they don't. This is New York . There are only two exceptions -- if you are a utility company doing service or a production company shooting a full-length motion picture."
The next day, Cole changed the name of his company to Kenneth Cole Productions Inc. and filed for a permit to shoot a full-length motion picture called, The Birth of a Shoe Company. "With the mayor's blessing, I opened for business on December 2, 1982 . I had two New York policemen as my doormen, compliments of the city. I sold 40,000 pairs of shoes in less than three days.
"I tell that story often because we need to remind ourselves that in business and in life, the best solution isn't necessarily the most expensive one, but it's almost always the most creative one," Cole says.
The first major ad campaign started three years later, as Cole was helping to pioneer what has come to be known as cause-related marketing. In the ad, he highlighted the AIDS epidemic. "You couldn't talk about AIDS then. The president of the United States, Ronald Reagan, didn't mention the word AIDS until 1987. I wanted to talk about the stigma, about not being able to talk about it."
His ad featured a number of well-known fashion models and small children; everyone was barefoot. The slogan was, "For the future of our children." With the next ad, also about AIDS, he took a more in-your-face approach. In The New York Times, he showed a full-page picture of a condom in its packet. Beneath it was the slogan, "Shoes aren't the only thing we encourage you to wear," and under that, "Support the American Foundation for AIDS Research."
While his ads were grabbing attention, Cole began to transform his shoe company, first adding accessories, then clothing. A workplace phenomenon -- casual Fridays -- helped with the transition. "Until then, every guy in America had the same wardrobe. Suits were gray, sometimes navy. Shirts were white, sometimes blue. Shoes were a pair of black and a pair of brown. On weekends, we all wore torn jeans, t-shirts and sneakers.
"And we were going along happily until someone decided, 'Guys, we're going to change all of this.' Essentially, what they said was, 'Nothing you own works.' People were traumatized. But you trust a brand to the degree it has served you in the past. So I set out on this mission to help. And I knew one day it would be a steppingstone to women's wear."
It was. As with men, the key to Cole's new women's line was easing the process of dressing fashionably. "For women, there were countless things -- shoes, handbags, skirts, blouses -- and everything had to match. We figured out a way to simplify the entire equation with one word: It's called black." The look of Cole's clothing has been called "Prada for the people" by New York magazine. In essence, he takes the high-fashion, urban style of European designers and makes it accessible and affordable for Americans. He also sells perfumes and colognes.
The key to the company's evolution, he says, has been trying to create an equation of price, value and style and tweaking it frequently. "There are no hard and fast rules. That's part of being a successful entrepreneur -- the ability to not be married to a specific path."
In 1994, Cole took his company public, partly to raise money to fund the countrywide expansion of his chain of stores. Through Jan. 5, the company's stock had returned 26.4% for the prior 12 months and 140% for the prior five years. It reported a profit of $10 million, or 49 cents per diluted share, on sales of $132.1 million for the quarter that ended Sept. 30, 2003 , compared with a profit of $6.8 million, or 33 cents a share, on sales of $123.5 million for the comparable quarter a year earlier.
Despite his company's growth, Cole still spends time pondering the importance of fashion in a world battered by calamity and woe. And not surprisingly, he has concluded that fashion does have qualities that redeem it, even if it pales in importance next to the subjects of his ads. "It's an extraordinary opportunity we each have to define ourselves. Most of our encounters during the day, maybe 90% of them, are superficial, frivolous. You don't get to know anything about the person except for how they look.
"Sometimes, I meet people and they say, 'I'm sorry, Kenneth. I don't wear your shoes. Shoes aren't my thing.' And that's OK. It's just a lost opportunity to define yourself. You can choose to be conscious of the process if you want, to be conscious of how you're perceived by people. I'm flattered when people allow me to be part of that individual expression."
All materials copyright of the Wharton School of the University of Pennsylvania.