New CEO wants to get Heelys back on its feet

Sep 08, 2009 (The Dallas Morning News - McClatchy-Tribune Information Services via COMTEX) -- HLYS | Quote | Chart | News | PowerRating -- Heelys Inc.'s wheeled sneaker for kids made quite a scene when it blasted into the shoe world in 2000.

Since then, the novelty has worn off. The one-time Wall Street darling has struggled with lawsuits, a plunging stock price and leadership turmoil in the past few years. The Carrollton-based company posted a net loss of $1.6 million on sales of $12.4 million for the second quarter.

On Aug. 1, Dallas advertising veteran Tom Hansen became Heelys' fifth chief executive in two years. Hansen, 53, recently sat down to talk about his first month on the job and his plans for Heelys.

How will your advertising background help Heelys?

People have a lot of misconceptions about advertising and marketing. It's really a problem-solving job: You're trying to change the direction of a company. I've worked with diaper, fast-food and beer products. I can come into a situation like this and hopefully get it going in the right direction.

What are your marketing plans?

It's making the product relevant again and extending the brand beyond the product. Anheuser-Busch's slogan, for instance, is "Making Friends Is Our Business." It's in the business of making friends. With Heelys, people say it's the shoe with the wheel in the heel. They don't say anything about the exhilaration associated with it.

I see us doing more online marketing, social networking and point-of-sale marketing at stores. In Germany, we have a dance team called "The Flying Steps" that gives demos and lessons at store openings. We plan to bring the team here in October or November.

How do you plan to turn around Heelys' eroding sales and profits?

Sales peaked at $188 million. Maybe we'll do $50 million this year. To get profits, you have to have sales. Our product line got stale. One of the big pushes here is to innovate new products. What's happening to us is happening to a lot of companies. We're totally based on discretionary spending and we're in stores at malls. That's a tough spot to be in. If people start spending again, we would hopefully get our fair share -- or more with new marketing.

In July, you said you would address "cost and infrastructure opportunities" to help restore profits. What have you done so far?

We've looked at everything from vending machines and staffing worldwide to insurance on a spreadsheet. It's still in the works. At some point, you can't keep cutting your way to profitability. You have to boost sales.

What will we see in your 2010 product line?

The shoes are lighter-weight and more athletic-looking when worn without the wheel.

Would you acquire footwear ideas without wheels?

Yes. We're testing shoes made by other people. Who knows what you might find.

Crocs shoes have had a similar trajectory to Heelys. Do you see any lessons there?

They were in the same position as us. They had one product. They didn't innovate, but now they've come back with new products and are responsive to the marketplace. Hopefully, we'll do the same. I'd like our stock to be nearly 10 times higher. [Crocs' shares fell to a low of 79 cents in November but now are trading around eight times that amount. Heelys' shares closed Friday at $2.22, nearly double the price in March but down 94 percent from an all-time high of $40.09 in early 2007.]

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