There’s No Place Like Tradehome
There’s No Place Like Tradehome
For the last nine years of its 102-year existence, Tradehome Shoes has taken its unique story for both customers and employees to another level. During that span, the Cottage Grove, MN-based company has never lost sight of its “sit and fit” roots, Midwestern values or attention to localized needs as it morphed from being privately held to an employee stock ownership plan (ESOP) firm. The retailer was founded in 1921 on the principle of “trading at home” in the local community instead of through catalogs from the likes of Sears and Roebuck and J.C. Penney.
Today, 271 Tradehome employees ranging from warehouse staffers to office personnel and store managers, about one-third of the overall payroll, own a stake in the fortunes of the company, which has grown to 130 stores across 25 states and nearly doubled overall revenues over the last three years.
ESOPs are one of the most common forms of employee ownership, helping to motivate and retain staff, and in turn helping the company to succeed. But they are a rarity in the footwear and retail sectors. A recent ranking of the U.S.’s largest majority employee-owned companies by the website nceo.org in Oct. 2022 lists only two with connections to footwear or retail, 17th-ranked Fargo, ND-based Scheels All Sports, which employs more than 6,600, and 6th-ranked W.L. Gore that employs some 12,000.
“I think if you were to poll our entire group, you would find that all of us are very happy working for a privately-owned, employee-owned company. We wouldn’t change it,” says Justin Kehrwald, president and CEO of Tradehome Shoes since 2018 after serving nearly 19 years as Chief Operating Officer and more than 23 years overall.
The people who work at Tradehome’s stores are the retailer’s “greatest strength,” according to Kehrwald. “Our employees, in our stores and at our home office, truly care about delivering great service and great products to our communities.”
Utilizing its ESOP structure, Tradehome empowers its local store manager-owners to build their own customized merchandise assortments with assistance from their Tradehome peers in the region via weekly “virtual Facetime” and a home office buying staff. Tradehome’s stores typically have sales floors of approximately 1,200 sq. ft. and carry 60 to 70 brands per season, with footwear accounting for 40 of them and retail prices ranging from $30 to $300 a pair.
“It’s not a one size fits all for our stores,” notes Kehrwald, adding the chain utilizes regular Zoom calls among store managers to discuss “hot” brand and style trends in particular markets and an expedient product transfer system to shift items from store A where sellthroughs may be below par to store B where demand for the style is outstripping the local inventory. Footwear companies like the process because it helps Tradehome maintain price integrity.
“We’re not having to markdown a product that’s not doing really well in Oklahoma,” points out the CEO. “We’ll just shift the inventory over to feed the hot hand.”
Running is the driving category in select Tradehome locations, outdoor styles in others. In some of its largely Midwestern markets, Tradehome Shoes “is the only game in town.”
Besides carrying the product that its local customers want through curated, customized assortments, Tradehome prioritizes showing them some items and brands that they might like but did not consider while maintaining price integrity as much as possible. While Hoka and On running are significant brands in all its retail markets today, Tradehome sees Euro comfort and dress comfort as the key style drivers in others. Besides the consistently “hot” brands in Birkenstock, Nike, Brooks, Heydude, and Ecco, the chain has experienced regional sales strength from the likes of Altra, Sorel, Pikolinos, Chaco and Dansko. If a brand or style emerges strongly in a particular store or two, Tradehome will typically expand its presence to another 25 to 30 locations, followed by another 30 to 60 doors if the style or trend resonates with consumers.
“We do not want to go into a market and carry everything that everyone else has,” adds Kehrwald, who has overseen growth of 30 doors since the pandemic began. Aside from the dozen locations in its home North Star state including a flagship in the Mall of America, Tradehome’s largest state presence currently is Indiana and Iowa (each with six stores) and Texas with eight doors. The footprint may be expanded in the coming years with locations in West Virginia, the Carolinas and Pennsylvania.
The retailer launched an e-commerce business in March 2020 during the pandemic. Direct-To-Consumer/special orders now accounts for 5 percent of all revenues. This year, Tradehome is aiming to enhance the performance of its website and mobile platforms. “Our goal is to provide a personalized experience for all shoppers (in-store and online),” Kehrwald says.
Kehrwald describes Tradehome as “unique.” He notes, “ We are full-service, we have products for the entire family, and we carry fashion-forward brands. Not many retailers attempt to do all three.”
Maintaining a focus on local communities in every endeavor it undertakes, the retailer launched a community outreach program in 2020 under the umbrella “Trade At Home, Give At Home.” Market management teams decide what community programs should be positively impacted by the effort that last year donated 10,000 pairs of shoes and 300,000 pairs of socks.
Tradehome Shoes at a Glance
Name: Tradehome Shoes
Corporate Home: Cottage Grove, MN
Stores: 130 across 25 states. Average size is 2,500 sq. ft. divided evenly between selling floor and stock room.
Employees: 800 total, 271 are owners through the retailer’s employee stock ownership plan (ESOP).
Top Footwear Brands: Hoka, On, Nike, Brooks, Heydude, Ecco, Altra, Sorel, Pikilinos, Chaco and Dansko.
Accessories Sold: Largely socks, insoles and care products.
Top Accessory Brands: Aetrex, Sof Sole, Swiftwick, Hydroflask, and Century (own brand).
Justin Kehrwald, President & CEO
Jay Welter, CFO & SVP
Mark Jacobson, VP Store Personnel
Carrie Giere, Head Buyer
Kim McKeown, Director of Merchandise