Liquidator appointed to wind up Shoes of Prey
Written on the 12 March 2019 by Business News Australia
Custom to-order shoes business Shoes of Prey has appointed FTI Consulting's Kelly Trenfield and John Park to wind up the business as the company's journey comes to an end.
The liquidation comes as the company announced it was considering its future and was putting orders on pause in August 2018.
The liquidation of the company brings a 10-year business journey to an end for co-founders Michael Fox (pictured left) and Jodie Fox (pictured centre).
It was a decade of experimentation for Michael and Jodie, alongside co-CEO Mike Knapp (pictured right), who sought to offer one of the most customisable shoe offerings on the market.
During the ten years the business saw a range of success, most notably from American department store Nordstrom who invested in the startup and a significant raise alongside the embattled Blue Sky.
Trenfield says that despite the directors' best efforts to restart the business it unfortunately had to fold.
"Unfortunately, despite the best efforts of the Directors, a way forward to recapitalise the business and reach agreement with the stakeholders was not found," says Trenfield.
"As a result, the Shoes of Prey business, which spans several global entities, will now go through an orderly liquidation process."
FTI will now commence a liquidation of Shoes of Prey on a solvent basis to ensure a return of funds to the US head entity as its sole shareolder. This will involve a process to dispose of any remaining assets of the company including its IP.
"At this stage, we do not expect any creditors of the Australian entity to be out of pocket. This includes holders of unredeemed gift certificates, who are expected to receive a full refund and will be contacted within the coming week," says Trenfield.
The liquidation comes alongside a eulogy for Shoes of Prey posted on Medium over the weekend by Michael.
He says that he and Jodie learnt a lot of lessons with Shoes of Prey, but importantly they realised that it sometimes impossible to truly understand what the customer wants.
"A couple of years in we then asked ourselves: "Would the mass market fashion customer also want to customise their shoes?"" says Michael.
"We conducted market research via our target customer and through strategic partners like David Jones and Nordstrom and the resounding response was "Yes" if we achieved 4 things: reduce lead times to under 2 weeks; simplify the shoe design experience; don't charge a premium for customisation; and establish distribution where the mass market fashion customer shops."
"Despite all the right trends towards personalisation and our success within the customisation niche, contrary to our market research the mass market fashion customer just didn't respond as we expected."
"We learnt the hard way that mass market customers don't want to create, they want to be inspired and shown what to wear. They want to see the latest trends, what celebrities and Instagram influencers are wearing and they want to wear exactly thatboth the style and the brand."
"If I ever find myself in a position where I'm attempting to change consumer behaviour, I will ensure I've peeled back the layers to truly understand the psychology of my target customer."
"While our mass market customer told us they wanted to customise if we improved our value proposition in the 4 areas I mentioned earlier, what they were consciously telling us and what they subconsciously wanted (to be inspired by trends and shown by celebrities and influencers exactly what to weardown to the style and brand) were effectively polar opposites. We listened to what the mass market customer told us, verified with our strategic partners that they were hearing the same thing, then accepted it."
You can read Michael's full Medium post here.
Jodie Fox has also announced that she is writing a book about her experience with Shoes of Prey that promises to be a raw view of the world through the eyes of an entrepreneur.
Business News Australia
Author: Business News Australia