Dealers can capitalize on low initial buy-in, 40 percent margins
TCX Boots is making a strong push in the U.S. motorcycle marketplace, battling brands such as Alpinestars and Sidi for boot share. In fact, TCX boasts the top-selling boot lineup in Europe and is aiming to take more share in the U.S.
TCX’s approach took a major step forward during the 2016 Monster Energy AMA Supercross season, when 450 class racer Broc Tickle of RCH/Soaring Eagle/Jimmy John’s/Suzuki Factory Racing opted to wear the all-new TCX COMP EVO MICHELIN product.
Powersports Business editor in chief Dave McMahon got to know more about the TCX expansion in the U.S. via a Q&A with Marco Poloni, head of research and development for the Italian manufacturer, and Randy George, vice president of sales.
PSB: For folks like me, who don’t know the history of TCX, tell us about its origins.
Marco Poloni: We have always been in the boot and footwear manufacturing business. In 1989, we founded Jolly Scarpe, a company that produced safety products (military, fire, etc.), and this is where we gained technical specifications based on these very technical boots and shoes. Immediately after that, we began cooperating with major OE brands, like BMW, Dainese, Polo and Hein Gericke.
In 1999, after gaining so much experience working with OEs, we decided to create our own line and introduce our first products at INTERMOT. It was a new brand called OXTAR featuring a completely new technology, TCS or Torsion Control System. This was created to avoid any ankle twisting, and from there, we started to say that OXTAR was “Focused On Boots,” and our goal from that point forward was to provide maximum safety for the consumer.
Between 2001 and 2003, we created our distribution network. Very quickly, I must say, because in only a few years we were already distributed in more than 30 countries, and that really helped us to establish the OXTAR brand name.
In 2002, we had an opportunity to capture the GORE-TEX license. As everybody knows, to get the GORE-TEX license is really very difficult. You need to have a very high standard of quality and production, which continues to be our main mission now.
PSB: What does your manufacturing process “look like” from an overall view?
MP: For more than 20 years we’ve had our own production in Romania. This allows us to control every phase of our production process. First, we check all of the raw materials here at our headquarters facility in Montebelluna, Italy, before sending those raw materials to Romania. They produce the boots there, perform the first quality control and then return the finished goods here. When the boots arrive back to Montebelluna, we do final quality control to complete the process.
Everything (all products) is designed and developed here in Italy. We have an R&D department and a stitching department for producing all of the prototypes. All of the new products for the TCX riders — we make a tailor-made boots for them here.
PSB: How has TCX fared as a business in the last few years? I know there was a time in the not-too-distant past when you had to overcome some hurdles.
MP: In 2006, the company was sold by the Zanatta family (who originally founded OXTAR and Jolly Scarpe) to an investment group from Milan called AKSIA. In 2007, AKSIA recognized OXTAR and Jolly as a good investment.
In 2007, there was a legal action with Alpinestars, who claimed that OXTAR and Alpinestars were too similar, and it might confuse consumers. This was absolutely hard to believe as we conducted several market studies, and no one was confusing the name. We were probably growing too fast, so Alpinestars in a certain way tried to slow our path to success. Anyhow, this happened some years ago, so let’s just say that we took this opportunity to face a new challenge, innovating in terms of products and rebranding the company name to TCX.
PSB: I have to say that TCX rolls off the tongue a little better than OXTAR. Why TCX?
MP: Because T.C.S. is “Torsion Control System,” and TCX was the torsion control system on our MX boots, and we knew that so many consumers saw a connection.
We rebranded our company completely to TCX, and it has been a huge amount of work. Right now the company is performing very well, so even after the change of the brand, the company turnover is around 20 million euro ($22.3 million), and our private label business represents 10 percent of the turnover.
PSB: Those are some impressive numbers. How far does the brand reach?
MP: The big thing for TCX today is distribution in 58 countries. We have three separate agencies for dealer direct sales in France, Italy and Spain, and we operate a wholly owned subsidiary in the United States, TCX Boots USA.
So right now the company is running very well, and now our next challenge is really to penetrate the U.S. market because in the rest of the markets outside of the U.S., we already have leadership in the mid- to high-end market. So where we have to grow is in the U.S. We are investing in the U.S., as we hired a marketing agency with Scott Cox and Resmarket, Inc., and our hope is that within the next 3-to-5 years we can build on our status as the No. 3 moto boot brand in the U.S.
PSB: You have recently partnered with Michelin to use its rubber on your boots. How was that partnership forged, and why is it important for dealers to recognize that the partnership can help them sell more product?
MP: The Michelin partnership started two years ago, and it was something completely new. I met with their representative, who explained that they are part of a big group called JV International, whose ownership is a huge Chinese entrepreneur with a $32 billion annual turnover. They have the international license to use the Michelin brand in all the technical soles, and at the time, they had something in mind to develop a sole initially for motorcycles, cycling and so on. They currently have expanded into hiking, trekking and other activities.
So when they explained their background to me, I thought that this could be a good opportunity for us to associate TCX with Michelin. I said, “Why not?” and we started with two products, the Infinity EVO GORE-TEX and the X-CUBE EVO WATERPROOF that is an urban product. We started the production, entering the market very successfully. People did appreciate that we have this important partnership, and we have now expanded the partnership to other products in our range. One of the main projects has been the Michelin sole for our new COMP EVO MICHELIN, and all of the feedback that we have had from this sole are really very positive. I think this is something that will work very, very well. Of course, the partnership is not finished, but of course, we have other products that we cannot mention right at this time.
PSB: Why is it important for TCX to put such an emphasis on new technology that offers riders the best in safety and comfort?
MP: At TCX, we believe motorcycle boots and footwear should advance the same as motorcycle technology advances each year. The entire TCX line is CE rated, which we know from our own research is increasingly important to U.S. dealers and customers. We know other brands sell boots that look like they provide premium protection — like the CE standard — but they do not. We believe our customers want the best in all aspects of their motorcycling. Best bikes, best helmets, riding apparel and the best boots. When a customer buys a new Husqvarna or Ducati or Honda, he wants the best boots, and for this reason, TCX is truly focused on boots, and we want to create the best in the world. We’re proud that the Husqvarna Factory WEC world enduro championship team wears TCX!
PSB: If dealers are not currently selling TCX boots, what are some of the key reasons why they should be, considering your latest models and the technology involved with them.
MP: Regarding the integrity of our product line, TCX offers a wide range of boots and footwear — perhaps beyond the other brands — with options for every type of rider and condition: touring and adventure, off-road, road racing, sport, cruiser and casual. Our range of women’s boots and footwear is larger than any other brand and uniquely designed for women — not just scaled-down versions of our men’s line.
Our selection of raw materials, along with the TCX design and manufacturing processes, are approached at a much higher level than most any other brand.
PSB: Who are some of your sponsored racers, and how have those partnerships benefitted the brand?
MP: Racing is important to TCX, and we are proud of the relationships we’ve had with many of the top motorcycle athletes. Today we’re sponsoring RCH Suzuki No. 20 Broc Tickle in AMA 450cc Motocross and Supercross. He debuted the COMP EVO Michelin boot last fall at the Genoa Supercross and again at the opening Supercross round at Anaheim. Broc has become a big fan of our boots, and he especially appreciates the performance of the Michelin MX Hybrid sole.
TCX has also had a multi-year relationship with Graves Yamaha road racing champ Josh Hayes, who has raced in premium racing boots like the TCX RS2 EVO for many seasons. This year, the top riders in flat track, including Kenny Coolbeth, Sammy Halbert and Briar Bauman, are also wearing TCX. And Jared Mees, the AMA’s four-time flat track champion, has worn TCX throughout his professional career. It was fantastic to see him take the X Games gold medal at Austin earlier this year! Rally fans will be familiar with Cyril Despres, who competed for many years in TCX, winning the Dakar Rally five times in our boots.
PSB: What about the casual or leisure boots, the stuff you can go out riding with, then walk into a restaurant wearing them? How has that market or rider changed in recent years, and how does TCX styling accommodate that rider?
MP: One of our newer casual and leisure footwear initiatives, the 24/7 All Around Collection, was introduced at AIMExpo 2015. The line was inspired by office workers, students and everyday riders with a need for both protection and all-day comfort. I believe we met both of those goals successfully. Every piece in the line is CE-certified and constructed of the highest quality materials.
PSB: I’m a dealer, and I want to add TCX Boots to my inventory. What are some of the initial points of entry? What kind of margins are we looking at?
Randy George: New dealer stocking requirement starts as low as $1,000. Our goal is to be a “natural dealer partner,” so we offer a stock rotation program, low free shipping threshold, as well as drop ship options. A dealer can realistically earn 40 percent-plus margins selling TCX, which is at the top of all the major boot brands in the U.S. today. We also are a full MAP brand, which means we try and maintain a fair playing field for all of our dealers in regards to maintaining TCX brand integrity.
Click here for reuse options!
Copyright 2016 Powersports Business