What the experts say
Sky Canaves, senior analyst, retail and ecommerce at Insider Intelligence, pointed out that Larroudé is a very early-stage company. “It’s still a niche, trendy brand and has yet to reach mainstream scale,” she said.
It’s tough to pin down what the DTC footwear sector is worth alone, but Canaves said designer footwear (shoes priced over $300, where much of Larroudé’s inventory falls) is worth $31 billion globally this year, with the U.S. share accounting for 40% (or around $12.4 billion).
“This designer shoe segment has seen a lot of growth over the past year or so as demand for dressy wear and office wear has been rising,” Canaves said.
Larroudé’s relative success, Canaves said, can be attributed to a few key parts of its origin story. “It has a very experienced and well-connected founder who knows the ins and outs of the industry, consumer tastes, and what it takes to be successful, and it’s generated a critical mass of social media buzz,” she said.
“Counterintuitively, I think the timing of Larroudé’s launch during the pandemic was a plus, it allowed the brand to really come up and be ready to break out just as consumer demand for dressier footwear and wardrobe updates was rising. And the brand takes stylish comfort as a key value. Consumers got used to wearing comfortable footwear like sneakers, Crocs and Birkenstocks during the pandemic, and it’s been hard for many women to go back to their pre-pandemic heels,” she said.
Secondly, the brand is self-funded, meaning “it hasn’t faced external pressure to grow quickly and rely on digital marketing to get there,” Canaves added. “It’s also recently opened its first factory in Brazil, and moving towards becoming more vertically integrated will improve its control over costs and product quality.”
Canaves also pointed to a few other cult footwear labels that focus on “dressier shoes at a similar price point,” such as Staud, By Far and Stine Goya, but added that she doesn’t have insights into their valuations or sales.
“The ‘old’ DTC model of spending heavily to acquire customers and scale a business rapidly has proven to be pretty unsustainable, as we’ve seen with Allbirds and many of the other DTC brands that are now struggling to maintain growth and turn a profit,” she continued. By contrast, Larroudé has utilized both retailers and DTC channels from its inception.
The brand’s pre-fall “Wonderland” collection dropped this week. Next up, priorities include international expansion and tapping into wider varieties of footwear, such as unisex sneakers.
Additionally, the co-founders said they want to start working on their first Larroudé brick-and-mortar store in New York before the end of this year. Its existing Manhattan outpost is used primarily as a showroom, including for press events.
“We were just in Japan. And we were so inspired by retail there,” Marina said, saying she wants it to be more lively and exciting than some U.S. retail stores.
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CLARIFICATION: Larroudé’s shoes have a sole that's 5 millimeters wider than other shoes on the market.