WHU start-up conquers the American shoe market
5 Questions for KOIO
Producing high-quality sneakers, offering them for lower prices than luxury labels, and establishing a brand in the highly competitive fashion market of New York – WHU alumnus Chris Wichert (BSc 2010) has now succeeded in doing so with his luxury sneaker brand KOIO. Americans and international customers alike enjoy his sporty yet elegant shoe models. In this interview, the sneaker-fan tells us how he and his co-founder Johannes Quodt got started without any advertising in the beginning, why they first had to launch a search operation in Italy before starting the production, and what role their shoes played in Game of Thrones.
1. Chris, you are a big sneaker-fan yourself. What do you like about them and have you turned your passion into a profession through KOIO?
Yes, I guess one might say I have been a big sneaker fan since childhood. And in a way, I have also turned my passion into a profession. But that was not initially the case, it all happened in a rather roundabout way. After graduating from WHU, I worked in investment banking. I was at J.P. Morgan in Frankfurt for two and a half years before I decided to do an MBA in the US and head in a different direction. At Wharton School in Philadelphia, I realized that I wanted to start my own business in a field that I am very passionate about.
What most intrigued me about sneakers from big luxury brands was the Italian craftsmanship, the high-quality leather materials, and the impeccable finish. At the same time, I noticed that traditional luxury brands had some problems in their business model because it is essentially based on brick-and-mortar retail. Additionally, these brands are heavily defined by exorbitantly high prices and inherent exclusivity. Thus, they appeal predominantly to older, more affluent people. Our goal with KOIO is to build a modern, digital, and accessible luxury brand for millennials and eradicate the weaknesses of traditional luxury brands.
2. You met your business partner Johannes Quodt during your studies. How did things go from there until KOIO was founded?
Johannes and I met during our MBA and quickly discovered our shared love for sneakers and Italian handmade goods. We immediately started brainstorming how we could build a modern luxury sneaker brand. Instead of doing an internship during our studies as we were supposed to do, we moved to New York for a summer which is where we designed our first shoes and developed the business model for KOIO. Then we needed to find an outstanding craftsman. It was almost impossible to find a good Italian manufacturer within the US.
Without further ado, we flew to Italy ourselves and started the search. During our four weeks there, we visited more than 30 manufacturers and took a close look at how they make shoes. On the last day of our trip, we found a family-run business that produces for the French luxury label Chanel. The quality and attention to detail in manufacturing there was at a completely different level than any of the previous factories. We really wanted to work with this particular manufacturer. In the end, we were able to convince the factory owner of our dream of making the luxury market accessible to more people. To this day, we are the only start-up producing there. All of our shoes have been handmade in this factory ever since, using the highest quality regionally-sourced leather.
After graduating, Johannes and I moved to New York for good and opened our headquarters there. We originally settled down in Brooklyn and moved to Soho after our first successful round of financing. In the meantime, in addition to our online business, we started four of our own retail stores located in New York, Los Angeles, San Francisco, and Miami.
3. You were able to attract many well-known investors, but you did not advertise. How does that work and why did you decide to set up in the US?
It is true, in the beginning we did not run any ads, but online advertising is now part of our marketing program as well. To start KOIO, we built our brand primarily on three pillars: 1. offline events, 2. press, and 3. collaborations.
We initially found that it was incredibly difficult to sell products of a completely unknown brand with an average price of 250 to 300 dollars on the internet. As such, we had no choice but to be creative. The first step was to raise awareness of our brand through offline events. We walked around Soho, befriended store owners, and asked if we could sell shoes out of their store for a weekend. This worked out fairly well and we began to see a lot of people walking around the city in our shoes. Our recipe for success was to tell customers in person about the product quality, let them touch the leather for themselves, and have them try on the shoes on the spot. Once they had tried on the shoes, they often wanted to buy them because they were convinced of the fit, the price, and the product quality.
Another integral piece of the puzzle was press relations. We got connected with several PR-based people in New York and passionately told them about our brand and concept. This helped us enormously in increasing brand awareness. We thus benefited from laudatory reviews in magazines such as GQ, Vogue, and Forbes. In 2015, men's magazine Esquire voted KOIO No. 1 "Coolest Sneaker.”
Right from the get-go, we started collaborations with inspiring and talented artists. Together we designed limited editions of sneakers. For example, we made product lines in collaboration with the famous tattoo artist Jon Boy, surfer Quincy Davis, and ballet dancer James Whiteside. But we also worked with bigger brands. Among the highlights were the production of shoes for the seventh season of Game of Thrones as well as a limited edition for the famous Beverly Hills Hotel in Los Angeles. In this way, we were able to tap into new audiences cost-effectively, design unique products, and tell rich stories to accompany them.
4. How do you perceive the country to have changed in the recent past? Have you felt a change in overall mentality and what impact has COVID-19 had on your business?
We chose to set up in New York because we really like the energy and dynamic in the city. A second creative hub for start-ups has emerged there in recent years, alongside San Francisco, but compared to San Francisco the fashion aspect is much bigger in New York. The city is one of the largest markets for luxury products in the world and therefore ideally suited for the new type of luxury brand we want KOIO to become. One disadvantage in New York is, of course, the elevated costs. It is true that everything here is much more expensive, and you need significantly more resources to establish a brand. Still, we never regretted coming here and we truly think it is the perfect location for us.
We have, of course, seen huge impacts of the COVID-19 pandemic on our business. We were and we are still hit hard on both the demand and the supply side.
On the supply side it started with our Italian manufacturers and suppliers suddenly going out of business. We produce exclusively in Italy and this country was one of the first severely affected by COVID-19. This led to an immediate halt not only in production but also of our research and development program. Unfortunately, this was a major setback with regard to the development of our business.
On the demand side, people went from living what we considered to be normal life to being required to stay at home from one day to the next. This initially meant that we had to close our office and our stores. In addition, people no longer need a lot of shoes if they just stay at home. We tried to cushion the whole situation with creative marketing and new products, like a work-from-home-kit that includes slippers and socks.
But our main business was still severely hit, of course. We are now finally starting to see that things are improving again. And we are exiting the crisis extremely well positioned, perhaps even better than we were pre-pandemic.
5. What makes your sneakers different from the rest and what does the future of KOIO look like?
With our sneakers we aim to combine Italian craftsmanship, excellent materials, sustainability, and comfort at a reasonable price. We offer our customers a truly luxurious product, handmade in one of the best factories in the world.
In the upcoming months, we will focus much more on sustainability. For us, this means that we will use even better materials and leather for our sneakers. It will be produced in farms where we know exactly how well the cows are treated, and we also intend to ensure that fewer chemicals are used in the tanning process. Moreover, we will reduce the plastic components of our shoes tremendously and replace them with recycled materials.
As a brand, we are currently focusing very intensely on sneakers, but we will significantly expand our product portfolio this year and are very excited to see how this expansion will be received by our customers.
About Chris Wichert:
Chris Wichert studied business administration at WHU – Otto Beisheim School of Management. He graduated with a bachelor's degree in 2010, ranked no. 1 among 118 graduates. Subsequently, he worked as an analyst and investment banker at J.P. Morgan. In 2013, he chose to pursue a master's degree in business administration at the Wharton School, University of Pennsylvania where he met his future business partner and co-founder, Johannes Quodt. In 2015, they founded the brand KOIO and run it successfully to this day.