Rothy's, the women's shoe brand with a cult-like following, is opening more stores

Key Points
  • Rothy's will open five stores this fall.
  • The shoe brand's first store in San Francisco "paid for itself" in under four months.
  • Rothy's says it made a little more than $140 million in sales in 2018.
Rothy's first bricks-and-mortar store ever opened back in 2018 in San Francsisco.
Source: Rothy's

Rothy's, the women's shoe brand with an almost cult-like following, is making a bigger move into bricks-and-mortar retail.

The San Francisco-based business started online in 2016, amassed an impressive following on social media for its chic flats made from recycled materials, and has since opened only one store. That location, on Fillmore Street in San Francisco, is a pint-sized, 600-square-foot shop. But it "paid for itself" and was profitable in under four months, the company said.

On Tuesday, Rothy's announced it will open five stores this fall and promises more are coming in 2020. The five locations will be in the New York's West Village, on Boston's Newbury Street, around Georgetown in Washington, D.C., and two in Los Angeles. The company said these are four of Rothy's highest-penetrated markets for sales.

"Stores should make money," said Kerry Cooper, Rothy's president and chief operating officer.

"Facebook and Instagram continue to be great channels for us" in helping acquire new customers, she said. But Rothy's wants "to get this shoe on as many people as we can. [Physical] retail is the chance for us to do that."

Rothy's said it brought in a little more than $140 million in sales last year. Cooper said the company rang up more sales in March than it did during the holiday month December — which is unusual for a retailer but shows just how much the momentum continues to grow.

It received $35 million in funding from Goldman Sachs at the end of 2018, bringing its total raised to $42 million.

Rothy's shoes — which include silhouettes like a ballet flat, a version with a pointed toe and a sneaker — are made out of used materials like recycled water bottles. The company said it has recycled more than 32 million plastic bottles to date. The shoes retail for $125 to $165.

"Everything we've always done has been about sustainability," Cooper said. This includes Rothy's deliberate and slow approach to opening stores. "We wanted some time to see how [stores] worked," she said.

Cooper said 65% of people visiting the Fillmore store are new to the brand, which is great for customer acquisition.

Oliver Chen, a retail analyst at Cowen & Co., said Rothy's is one digitally native brand that has "built loyal communities," similar to Allbirds and Athletic Propulsion Labs sneakers. "Brands of the future need strong two-way customer communication to innovate and remain relevant," he said.

Rothy's also says it's focusing on street-level retail in neighborhoods, not malls, as it looks to open more stores.

"I'm not anti-mall," Cooper said. "But I think we will continue [with] street locations for a while."

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