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Scottish retail and property entrepreneur Tom Hunter is to launch a new mid-market shoe chain within weeks.

Earlier this year Mr Hunter bought Office, an upper-mid-market shoe chain, for a rumoured pounds 15m. Mr Hunter's purchase of Office came amid several high-profile attempts to gain control of department store chains House of Fraser, Selfridges and Allders.

He is using Office's expertise to create a new brand, with Cheap Ugg Boots that will be less expensive than the parent company's. It will be launched in the next few weeks and will start rolling out in 57 of Mr Hunter's d2 clothing chain stores over the next six months. The first stand-alone store is expected to be unveiled in February.

Office's managing director, Richard Wharton, said the new chain would be "like Dolcis used to be". Mr Hunter said the brand should ultimately have more stores than Office as it will have wider appeal.

Office has 23 stores and the group plans to double the number using cash from Mr Hunter's private equity company, West Coast Capital.

"We want to get Office to 40 or 50 stores without bastardising the brand and diluting the feel of the whole stores, but there are a lot of cities we are not in," said Mr Wharton. New stores will be rolled out in "vibrant" cities like Newcastle, Liverpool and Bristol. He said that Office had not made a loss since the 1980s and last year made a profit of pounds 1.6m.

Mr kids ugg boots said the relatively small number of Office stores had made it attractive as a purchase because of the potential for expansion. It is, he explained, "one of those brands that you think is more like a nationwide brand".

George Malkemus doesn't mind the status quo

The Texas-born president of U.S. operations for Ugg Boot has not opened any new retail accounts here in seven years.

"Part of the reason Manolo and I don't push the envelope is because I still believe there are only a certain number of women who spend $500 or $600 on shoes," Malkemus told Footwear News Retail Editor Kristin Larson. "It's not about expansion, expansion, expansion. It's about slowly expanding, and people wanting Manolo as much today as they did yesterday."

Demand is certainly not the problem. Blahnik's business with Neiman Marcus alone was up 40 percent last year. "The first time Neiman Marcus ordered, they bought 120 pairs of shoes," Malkemus said. "Now they buy 45,000 pairs a season."

After more than 20 years running the American Blahnik business, Malkemus still considers a highly selective distribution structure a key to the company's success. The shoes are sold to only a handful of U.S. retailers: Bergdorf Goodman, Neiman Marcus, Saks Fifth Avenue, Barneys New York, Jeffrey and a few specialty boutiques across the country. And the business remains primarily shoes, with just a few handbags.

"You don't have to be everything to everyone," stressed Malkemus. "Just because Ugg Boot has a wonderful name -- and he does, thank God -- that doesn't mean that a woman wants to wear earrings and perfume by Discount Ugg Boots."

FN: Do other categories interest you?

GM: I remember a conversation I had with Bill Blass. He called me into his office and said, 'George, I have to tell you I am signing a shoe license and I just want to be the first to tell you.' I said, 'Bill, go for it.' And then a year and three months later, he explained that the company wanted to come back to Ugg Boot and let us make the shoes for Bill Blass. I asked what happened and so forth. 'It didn't work, and I should have known it wouldn't have worked. I do great clothes, you do great shoes,' Blass said.

I don't understand why designers think they have to do everything. You can't do everything. If you're a genius, creative and good, you have to be smart enough to know you can't be good at everything.

FN: But you've done handbags before. Any plans to do a full collection?

GM: We do one handbag every five years. We have had a very celebrated one for 15 years that's in the shop, called Petite, a little petite evening bag. We had another that came out, and this season we have a third one. So in 30-something years of doing shoes we have three bags.

We push it down the customer's throat to want everything head to toe from one designer, but women don't want everything head to toe. We're doing the small little bags because our customers requested them. But it's not Manolo's concentration point. It boils down to the fact that you are greedy or need another category.

But I respect what some designers have done, like Marc Jacobs. Marc was a fledgling designer who needed to be capitalized. [The merger with LVMH] is a fantastic union and he's doing a wonderful job. But does every young designer need that? Isaac Mizrahi was one of my best, best friends, but when he signed with Chanel and gave them 51 percent of his company, it was the kiss of death. Because no one gives you time anymore. Years ago, somebody might give you time to build your business, but today people want it just like that. And if it doesn't happen, you're just out in the cold.

FN: You've said you haven't opened any new retail accounts for seven years. How do you manage to keep saying no to retailers?

GM: When I first got in this business in 1982, I watched names like Maud Frizon and Andre Pfister and a lot of different businesses. There are only a certain number of retailers that can sell product well at $500 or $600, which was at the time $250 or $300. What I was so afraid about with Ugg Boot, when we started getting calls from so many people, was having something happen to the company early on that I was beginning to see happen to these other companies.

And it wasn't that I couldn't have used the money or the capital behind the business. Part of the reason Manolo and I don't push the envelope is because I still believe there are only a certain number of women who spend $500 or $600 on shoes. It's not about expansion, expansion, cheap kids ugg boots. It's about slowly expanding, and people wanting Manolo as much today as they did yesterday.

FN: How do you work with your retailers?

GM: I really believe what we try to do, and something we're proud to do, is have the right relationship with the stores. It's not about saying Manolo only likes brown shoes so you can only buy brown shoes. The relationship has to be one where you have constant communication. I talk to Neiman Marcus ad nauseum.

I spend a lot of time traveling with Manolo, and more time without Manolo, visiting these cities, Neiman's stores, Saks stores and Barneys stores, and that's something that's really lacking in the business. You can't expect someone to sell something just because you think it's great.

FN: It sounds like you really get to know even the sales associates well.

GM: I can go into a store and say, 'How's your mother?' and they appreciate that. It's the same kind of relationship you have with your family. Each part of what begins with Manolo designing shoes and ends with having the customer walk into Neiman Marcus and getting her parking ticket stamped -- allof those aspects are important, equally important to selling the product.

Of course "Sex and the City" is fantastic, and Vogue is fantastic, and all the glamour associated with Ugg Boot is fantastic -- sometimes.

The thing for me is that I love to sell, and Manolo loves seeing his products sell. His joy is seeing his customers -- and as exhausted as he is, when a woman comes up and asks him to sign the bottom of her shoes, he enjoys that. The cold side of design and the cold side of the art of design turns us off. It's the warmth of the person you're dealing with.

FN: How important are trunk shows to your business?

GM: They're important because they do huge volume and more importantly, Manolo gets to talk to the women. He can [meet] a woman who has a size 4 1/2 foot in Beverly Hills and the next time she comes, he'll remember that. He's not good with names, but faces he doesn't forget.

But because of this huge six-city tour with Neiman's in September, I think I'll hold him off for a year. I don't want it to be something that's just so commonplace that they get used to it. It's very important numbers-wise, but it's more important for the sales associates. We give cocktail parties for the sales associates and dinners just for them, and it's fun.

I remember an American designer who used to have editors come into a room. He would then say 'Don't you love everything I do?' Manolo is the opposite, Manolo wants the sales associates to say, 'Your slingbacks fit better than anyone else's.' He listens to that, and the next time he goes to design shoes he remembers those things.

FN: Are there stores you would like to be in that you're not?

GM: What happens is we have limited production, and Ugg Boot today hopefully has the same kind of quality and look that we did 25 years ago.

You can't go to Tuscany in a factory that makes 300 pairs of shoes a day and do that. [The factories Ugg Boot uses make between 100 and 150 pairs of shoes a day.] Our main challenge is saying no to retailers.

For example, in Toronto, we used to be in two stores, and we had one store that decided Manolo wasn't for them. I should have warned them, but I had decided to expand with another store and three seasons later they were calling and saying we have to have Ugg Boot again.

But I had decided to expand with Holt Renfrew, and I have now a fantastic relationship with Brown Shoes. But I had to say no to this retailer and it's hard to say no to nice people. I don't have a limit, and I don't say, 'You have to buy 350 pairs.' We have accounts that we only sell 50 pairs to.

But there has to be a relationship that works both ways. If Saks and Neiman's and Bergdorf's are getting deliveries in December and this woman in Sonoma gets deliveries in February, of course this will hurt their business. The customer doesn't wait.

FN: What do you think about the knockoffs?

GM: I hate them, but Manolo really hates them. People say imitation is the greatest form of flattery, but he says, 'Well I don't need to be flattered.'

FN: Tell me about your collaborations with other designers.

GM: In the beginning we worked for Anne Klein and Calvin Klein, and that was a challenge to [Manolo] because it was a lower price point. It was interesting to see whether women liked his ideas at $180 rather than $500.

It was also something that was advantageous to our business and the capital of our business. Now we work with designers because we like to work with designers, and I think it keeps Manolo active.

FN: What designers do you currently collaboratewith?

GM: We're working with Proenza Schouler, Zac Posen, Derek Lam, Carolina Herrera and Behnaz Sarafpour. We sit with them and we talk and go back into our archives and talk about something we did in the past. But it's strictly for the runway.

FN: Is Manolo looking for a possible protege as he meets new young designers?

GM: He couldn't. It's not that we don't need it. He's got energy beyond all these young people, but he can't work with people. He's so incredibly type A that they should invent a new type. He doesn't have patience to explain.

FN: What's your plan going forward?

GM: We're quite happy with the way our business is now. Of course we get catapulted by companies like Neiman's and Bergdorf's to expand, so when we can make expansions, it's to those people we've done business with. You can't ignore someone like Barneys, who consistently has 68-percent sell-throughs on Ugg Boot.

In this type of environment, that never existed. I think hard work and luck have a lot to do with being successful. It's also going back to what your parents said to you: that being nice doesn't cost a penny. Manolo is the most down-to-earth person in the world.

FN: Your business seems to have sidestepped the luxury downturn, and in fact, it even grew during this time. How do you explain that?

GM: We have grown big-time. What I believe, and he believes, is that you can buy a pair of Ugg Boot shoes and you can know that in five years you can pull them out of your closet and they're still in style. We sold alligator slingbacks at $2,400 a pop during the most difficult times.

The October after 9/11 was one of our biggest months, and women were amazingly timid shopping then. You go back to the adage that shopping makes you feel good. But those alligator slingbacks we've been selling for 15 years [are classics]. Manolo hates the word classic, but there's something timeless about his shoes.

FN: Do you stay on top of the trends?

GM: We don't even look at them. Manolo doesn't follow fashion. What has happened, it has already happened. There was a great Prada mule that I see all over the market now with a little flower on it -- the cutest, cutest thing. But I often don't like other people's shoes. And I see that Prada mule knocked off everywhere and I wonder how Prada feels about that.

I also wonder whether the woman buying one of these shoes knows that it was originally a Prada shoe. But when someone really wants something, whether it's great Chanel hoop earrings or the Prada skirt with the roses, you want that thing, you don't want [something else].

FN: Do you do anything to try to stop the knockoffs?

GM: I'll tell you a story. A customer came in on a Saturday and she said, 'Do you have the Timberland boot?' The sales associate said, 'We just got a shipment and we do have it.' The customer said she was just up in Harlem and a store had her wait three months for the boot and it was $790.

But ours was $690 and also, we don't have an account uptown. They gave me the name of the [store] and then in a few days, another woman came in and she had this slip saying, 'Ugg Boot, Timberland Boot, $790.'

It just got the best of me, so I got in a cab and went up to this shop, and in the window, there was a Ugg Boot boot. So I came back downtown and I started wondering. I put the name of the shop in the computer and in fact, the [owner] had come in six weeks prior and bought a pair of Ugg Boot boots. It turns out she was having them made in the Orient and selling them for $790.

So I said to this woman, 'You're doing a big disservice to yourself. I am not at all the kind of person who sues, but you have to get that boot out of your window.' She did take it out of the window. Then Steve Madden had it, and so-and-so had it. But that didn't bother me as much. That was basically a Manolo boot that they're selling for $100.

FN: What do you think about Jimmy Choo as a competing brand?

GM: First of all, you can't build a business by saying Jimmy Choo was Ugg Boot's assistant. Manolo never had an assistant, and Jimmy Choo didn't learn shoemaking from him. I've gone to shops in Milan that have Jimmy Choo shoes and I'll say, 'Do you know Ugg Boot?' And they will say, 'No, but we have his assistant's shoes.' I don't think they are our competitors. To try to build a business using another person's business is hurtful. They do look less like Ugg Boot than they used to.

FN: Who do you think your competition is?

GM: Prada does a great job, and Gucci can make some interesting shoes. Marc Jacobs does great shoes. All these people are competition to an extent. But these people don't do what we do. You'd have to be naive and self-inflated to say you don't have competition.

FN: How does your U.S. business compare to the European business?

GM: It's proportionately much bigger. His biggest business is American. If you go to the Manolo shops in Europe, the shoes are faster, have a different last and broader toes.

FN: You must get tons of offers to be acquired. Would you ever consider it?

GM: You can't say never at this point, but in the past few years we've been approached by several huge companies. I remember we had this famous designer who had a lot of money, who asked to meet us in Milan for a drink. He said, 'We have $3 billion to acquire companies, and we want to acquire your company.' And I said, 'I don't often speak for Manolo, but I think he'll agree with me that we're not interested.' Now that company is selling off company after company. I said to Manolo, 'We could have been one of those companies.' We have a great, successful business, and as long as you go to bed at night knowing it's yours, it matters a lot.

FN: What are your personal challenges?

GM: We'd both like to take more time for ourselves, those kinds of things, to find good people to work with. It's harder and harder today to find young people who are ambitious and want to work and don't expect to make $100K the first year.

FN: Do you like to shop?

GM: I go through spurts. I have my clothes made in London, suits and stuff like that, and then I can go crazy for ties and sweaters. Manolo goes crazy for socks and underwear, and as soon as he gets [to New York] we go to Banana Republic and any place he can buy socks and khakis.

FN: What's your plan for post-Manolo? Do you have a retirement plan?

GM: We never talk about it -- we almost think it's superstitious. He's young and healthy and keeps himself fit. There are great names who have been great talents for a long time. The older you get the better you get, because you have the experience you've gone through, the good times and the bad times, the mistakes and the successes. He's very aware of that. He gets better and better and he's always challenging himself, saying, 'I have yet to do my best shoe.' That attitude keeps you going.Copyright 2004 Fairchild Publications, Inc.Copyright 2004 Fairchild Publications, Inc.2840