The Bieber Effect: Did singer save Uggs?

Fortunes of the struggling footwear line rise following positive Twitter comments from the pop idol.

By Bruce Kennedy Nov 27, 2012 4:27PM

Credit: Ugg/AP Photo)
Caption: Ugg bootsJust what did Justin Bieber know about Uggs, and when did he know it?


An apparent change of heart by the teen pop idol about Uggs, the clunky, expensive boots produced by Deckers Outdoor (DECK), may have brought about a change of fortune for the footwear company.


"I will not even look at you if you're wearing Uggs," Bieber not too long ago warned his massive fan base, "even if you're Beyonce!"


And indeed, Uggs were not popular with Wall Street either.  At the end of last month, the company's shares had fallen about 60% year to date. Deckers Outdoor CEO Angel Martinez blamed his company's woes on warm weather and an 80% rise in the cost of sheepskin and other raw materials over a two-year period.


Analysts also looked at an overstuffed inventory and deflated demand for the Uggs line of products. Deckers' profit also fell 31% in the third quarter, mostly due to a 12% drop in revenue from its Uggs line.


And while Deckers' recent third-quarter earnings report beat analysts' expectations, it was down nearly 26% from a year earlier. The company had also scaled back on its fourth-quarter and fiscal 2012 forecasts.


But just last week, a startling admission from The Bieb: "After all this time of hating on uggs," he tweeted, "I put on a pair of ugg house shoes and my mind is blown so comfortable I’m sorry ladies for doubting u."


Bieber's Twitter feed, by the way, has a global audience second only to Lady Gaga's. More than 30 million "Beiber Believers" follow their idol online, and his opinion carries weight.


"OMFG!" one fan tweeted. "I never wore uggs until a week ago because @justinbieber hated uggs and then I get a pair and he likes."


And suddenly, just like that, Uggs are popular again. According to Experian Marketing Services, Uggs were the top retail product searched for online over the Thanksgiving/Black Friday shopping period. And shares of Deckers Outdoor, which have been upgraded to "neutral" from "underperforming," rose 6.6% on Monday.


But maybe it wasn't just Bieber. Earlier in the month, Jefferies consumer analyst Randal J. Konik sent out a note to investors saying that Uggs still had legs. "Google search trends, Facebook likes and unique visitors to the Ugg website all show that the brand is still healthy and relevant," he noted.


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9Comments
Nov 28, 2012 8:09AM
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it's the COSTS, silly.  The kid couldn't save himself even if he wanted to.  The boots, shoes & slippers are great but they are just too costly.
Nov 27, 2012 5:09PM
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Back in the day Chevrolet was considered the working mans car.  What I have seen as time passed a large portion the Chevrolet dealer body went from high volume, low priced, to High end, High Profit cars.  They seemed to want to sell one for a big profit rather than 10 for the same amount of profit.

 

I know Chevrolet/Gm got beat hands down in the entry level market primarily because of their dealer body.

 

Try finding a basic Chevrolet on a dealer’s lot.  GM provides them but dealers won’t stock them.  They would rather sell loaded to the hilt models like Cadillac Dealers.

Just like three years ago I wanted a New Avalanche, all the ones I could find in a 200 mile radius were all fully loaded.  I could have gotten a Cadillac Escalade EXT for the same as they wanted for those Avalanches.

Nov 28, 2012 11:33AM
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yea all the lil tween girls and gay bois all went out and bought them because they want to emulate this girly boi
Nov 28, 2012 12:01PM
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I would stop buying these just because of Beiber endorsing.  What a spoiled little brat.  Selena Gomez does not realize how lucky she is without him.  Now maybe she can find a real man.
Nov 28, 2012 12:45PM
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I bet there are at least as many people who would do the opposite of what Justa Biever says, as there are that would follow suit. 

It would be real disappointing otherwise...

Not to mention that they're pretty Uggly.......
Nov 28, 2012 1:05PM
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I "beliebe" South Park said it best..........BLAME CANADA
Nov 28, 2012 12:26PM
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Could they be selling because they are endorsed by

New England Patriots QB Tom Brady????

Nov 28, 2012 12:17PM
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A pathetic weird looking guy flip-flopped and now claims to like those hideous (not to mention seriously over-priced) boots...WHY IS THIS NEWS???
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