Shiekh is Chic
As told to Emma Johnson
Footwear Intelligence
In just 15 years, Shiekh Ellahi has built an enviable independent shoe retail empire on two tenants of the human condition. One: employees go to work to get paid. Two: teenage boys like teenage girls.
Might sound ridiculous, but the Ontario, Calif.-based Shiekh Shoes recently opened its 90th location and reports $110 million in annual sales.
Born in Pakistan, Ellahi was attending medical school in California. And like many a broke grad student, he needed a job. At random, the 17-year-old applied and landed a stock position at Baker's Shoes. That was the late 1980s. Soon he worked his way up through stores in five states to manager of the company's flagship store on New York's 34th Street near the famed Macy's. By then medical school was no longer the dream.
In 1991, Ellahi entered a shoe store partnership in Oakland with a man in his 70s who retired a few years later when the company counted eight locations. With Ellahi as sole proprietor, the now-named Shiekh Shoes continued to grow quickly but steadily, inching into malls in Nevada, Arizona and Texas - states where Ellahi had contacts and retail experience, and where populations were booming at record rates.
The first and most immediate key to success is paying employees well, says the former stock boy. "As retailers we need to pay our people," Ellahi says. "(Retailers) try to save money on payroll, but you should work with suppliers or landlords or the electric company before you work with your own people on money. You can do a lot of things like benefits and scheduling, but a young person who is 18 years old will be loyal if he can't find a better paying job."
Ellahi says that Footlocker spends between 7 percent and 8 percent of sales on payroll; he spends twice that (Shiekh Shoes' reports per door sales of $700 per square foot, compared with what Ellahi says is $290 per square foot at Footlocker).
But employee benefits don't stop at biweekly paychecks. Shiekh Shoes works with suppliers to run sales promos like the car giveaway last year in which 10 vehicles were given to top sales associates, and a dozen employees were flown to company headquarters for a celebration. "At the end of the day, if you make your people happy, everything else will be OK," Ellahi says.
It also helps that Shiekh Shoes has a unique niche, no matter how obvious it may be. The stores cater to a young, co-ed crowd. "There really is no other urban shoe store that sells to both young male and female customers in the environment we have," Ellahi says.
Shiekh Shoes stores average 2,700 square feet and take on a decidedly nightclub flavor with loud hip music. The newest location in Los Angeles tops out at 6,000 square feet. "Our target customer is a 17-year-old male who loves basketball. But if you ask him what he loves more than basketball, it's a young girl," Ellahi says. "It's a good-looking environment, and the sales people are good, but 70 percent go in because there are young, good-looking girls in the store."
All the locations are inside malls where kids hang out and parents feel safe dropping them off.
Once inside the store, the variety is vast. "People say they love Jimmy Choo, but you go in and there are 50 pairs of shoes," says Ellahi, who compares the all-white display displays to slick Apple stores. All fixtures are lower than four feet, and the custom fixtures are aluminum silver. "It makes it look really expensive and different," says the owner.
The selection includes Timberland, Nike, Puma, Adidas, Converse, Phat Farm, Kangraroos, Lacoste, K-Swiss, Ecko, Steve Madden and a private Shiekh Shoes label consisting of "sexy high heels for real working women." Prices range from $20 flip-flops to $300 for a top pair of Jordans or lady's boots.
One year ago Shiekh Shoes instituted a then-unique practice: if a customer couldn't find a color or size, the desired pair would be shipped to the customer's home at no additional cost. Today such orders account for 6 percent of sales.
The company's online presence has been mostly marketing, though retail from the site has grown to $1 million annually. Online orders were filled by culling inventory from the various brick and mortar stores. There is now a designated location for online sales, and the business plan calls for growth in sales in this channel.
As for more traditional advertising vehicles, Shiekh shoes has dabbled in magazine, radio and TV advertising over the years, and belongs to a co-op. But its biggest success is recruiting amateur models from local high schools and featuring them on area billboards. "The kids will make everyone in school drive by that billboard a million times. I get complaints from grandmothers and mothers that they have to drive by even if they don't need to," Ellahi says. "If you put LeBron James or Michael Jordan on a billboard it's nice, but I don't think they'll tell anyone about it."
Looking forward, Ellahi, who turns 40 in April, is discreet about plans to grow Shiekh Shoes. "I'm hoping I can keep my employees happy and give them a reason to show up to work," he says. "New stores come along automatically if you have good managers who want new challenges."
Ellahi mentions that he has a 15-year-old daughter - one who is interested in fashion and speaks fluent Chinese, Spanish and English. When asked how he reconciles raising a teenage daughter with building a business on teenage boys who will be teenage boys, he is quick to reply with a jest: "With a gun."
© SGI Media/Emma Johnson