Roger Hardy knows a thing or two about online retail. The Canadian entrepreneur just made a bundle on Coastal Contacts, an e-commerce eyewear business (which operates as ClearlyContacts.ca in Canada) he recently sold to French lens giant Essilor for a cool $430 million. But he’s diving straight back into the world of Internet shopping with the acquisition of two upstart online shoe retailers, announced today.
ShoeMe.ca was founded by Sean Clark, a one-time employee of Coastal Contacts. Hardy is combining the Vancouver company, in which he was a seed investor, with Seattle-based OnlineShoes.com, one of the first brands to enter the Internet shoe marketplace. The combined company would have annual revenues of $200 million, with Hardy serving as chairman and CEO.
Canadian Business: Why ShoeMe.ca?
Roger Hardy: I think Canadians have been underserved, and that’s what ShoeMe’s trying to correct — it’s trying to bring better service and savings to customers in Canada, and that’s always a business plan that I get excited about.
You’ve also acquired OnlineShoes.com. What kind of consolidation are you planning?
They have a similar value proposition in the US, but it’s a more developed business. They started in 1996—they were the first online seller of shoes in the U.S. and have been steadily growing for 20 years. We think there’s a great synergy between what’s been built in Seattle [and Vancouver], the strong technology platform and relationships with the brands, and leveraging what’s here and offering some of that to Canadians.
Our plan is to keep both brands operating. We’re really looking to leverage the 300-plus different shoe brands that exist here at OnlineShoes in Seattle. ShoeMe still has about a 100 brands but still has a long way to go, so that would be one of the big synergies, those relationships with those brands, many of which aren’t even in Canada.
There’s a clear giant in online shoe retail, and that’s Zappos. How are you planning to take on that big competitor?
Zappos has been a competitor of OnlineShoes here in the United States for a long time, and despite that OnlineShoes has steadily grown, [and] is arguably more profitable. [OnlineShoes] has a unique service mantra — customers here are very loyal, they come back on a regular basis. In Canada ShoeMe has been very successful in the three years it’s been around, it’s grown very quickly — 200–300% a year growth. It’s still very early, but I don’t think the competitor you mentioned operates in Canada; ShoeMe is really the de-facto online shoe retailer in Canada for those who don’t want to drive down to the border to pick up their goods. I think we’ll do just fine.
Why get back into the game so fast after Coastal Contacts?
I think ClearlyContacts has been its own unique experience, and we’ve done something that nobody else had done there before. The difference here is that everybody loves shoes—there’s just a much bigger opportunity. Contact lenses is one in 10 people, but the shoe market is everybody, and the consumption is monstrously higher. The average consumer will buy six pairs of shoes a year; people were buying contact lenses once every two or three years. In Canada e-commerce is 1–1.5%, and here in the States it’s 6 or 7% online. So Canada still has a long way to go, and we think that we’re one of the businesses that will start to close that gap.