Esmail Mawjee, President of Active Ride Shop, Opens His Playbook On The Retailer’s Recovery And Turnaround
It has been four years since Active Ride Shop was purchased out of bankruptcy by a group of investors for $5.2 million. While the road for the new management team has been bumpy at times, they have managed to bring Active back to profitability through a solid mix of product, community, and business know how. We caught up with Active President Esmail Mawjee to learn more about the journey and the strategy and philosophy that have put Active back on the map.
It’s been around four years since the ownership change and you guys are now back in the black. What have been some of the most effective changes you have made during that time?
It has been a very rewarding journey in arriving here, one filled with huge challenges and wonderful opportunities. We acquired Active for the brand, and immediately focused on what had worked well for Active in the past, and how to rebuild and grow it moving forward. As a brand and a retailer, we recognized the importance of balancing the culture with the science, and paid equal attention to both. We invested into the right people, and empowered them to make thoughtful and intelligent decisions. On the culture side, we have strengthened our roots in skate and snow, continued to remain true to the core, and grown our support for the lifestyle we are so passionate about. On the science side, we continue to strengthen our infrastructure, have reorganized internally for success, and introduced financial disciplines and processes to stabilize and turn our company around.
What are some of the biggest lessons you’ve learned in that time?
To believe in ourselves, to listen to and trust our inner voices, and not let other people’s opinions drown them out. When you stumble upon something extraordinary like Active, you do everything possible to make it work. You simply don’t give up, even when the challenges seem insurmountable at times. The turnaround required an unwavering financial backing from the ownership and, more importantly, having patience and trust in our team. We obviously could not have made it back without the incredible effort and dedication of our team.
How has the market and your business changed during that time?
We have all felt the massive changes in the market, and how it has become increasingly competitive in recent years. With the new technological advances in today’s world, there is a new normal that we are all adjusting to; consumers are informed quicker and much easier, therefore shifting trends for businesses to better adopt against. There is added pressure with the race to the bottom-line, with retailers willing to take slimmer margins on higher volumes, and vendors allowing their retailers to devalue their brands by cutting prices.
Fortunately, Active’s model has served us well by being unique and special. Our house brand, which is not a private label, is a great complement to our product mix as well as being a point of differentiation. We are constantly challenging ourselves to improve, and never satisfied with the status quo. Active helped launch a number of successful brands in the past, and continues to be a true platform for new and emerging brands. Our grassroots marketing contributes greatly to the overall brand experience.
You guys recently moved your Norco store, correct? Tell us about that process and the new store’s design and feel.
The moving of the Norco store to Corona presented a great opportunity for us in the way that it allowed us to take and modify our existing retail model to better serve our customers. Like all things, such moves take a little longer, and end up costing more than expected.
It sounds like this will be the model for Active’s shops going forward. Are you planning on updating other stores in the near future to give them a consistent feel?
Active is known for its uniqueness and individuality amongst its stores. Every shop has its own look and feel while retaining some of the core features that makes it distinctively Active. We have always been a part of the community in which we have had a presence. The staff at each store is usually hired from the local community to strengthen the relationships between Active and its customer. That’s a big part of the “Active Experience.” We know that many of our stores have been in need of a facelift, and we certainly have plans to do that over time. It’s just that our priority until now has been to pay everyone on time.
How do you think Active as a brand has changed in your customers’ minds?
The brand’s appeal has only grown stronger over time. It survived bankruptcy, and has been remarkably resilient over the years because, I believe, it has remained relevant, timeless, and rooted in the Southern California lifestyle. Ultimately, it’s the people of Active who deliver the brand experience to the customer.
You guys are down to 21 shops now from 29 – is that the correct size for Active these days? Any plans for more/less at this point?
As you know, the downsizing really occurred before our time. At acquisition, we made the decision to keep all the existing 21 shops at the time upon renegotiating our leases with the landlords. All of our shops have contributed positively from day one, and so the answer to your question is, yes, 21, plus Ecommerce, is the correct size for Active these days. Even though there are tremendous opportunities to grow beyond the current door size, we are presently focused on investing more into what we already have in order to realize each shop’s fullest potential.
How has your product mix changed over the last few years? How about brand affiliations? Why?
We are constantly challenging ourselves to remain relevant and exciting. We understand that Active’s role as an industry leader requires us to drive brands and trends, and not always let the customer tell us what to do. Our brand mix is ever evolving, and much depends on relevancy, as we have parted from some brands, as well as invested into new and exciting ones over time.
What are the three most important things you do these days to serve your customer and keep them coming back?
Active has been fortunate to have a loyal customer following. Our mission is to strive to share a unique experience that connects people back to our roots of skate and snow. We achieve that by offering our customer the following three C’s: Compelling product and brand mix, exceptional Customer Service, and Community involvement. That is, in essence, the Active Experience.
How difficult was the transition period with your brand partners who got burned by the previous management and what did you do to smooth those relationships?
With the new ownership being an unknown entity at the time, it was quite challenging initially when we took over. There was a certain amount of negative fallout from what had happened, but we didn’t take that personally knowing that we absolutely had nothing to do with it. If anything, the new ownership was focused on saving the Active brand, turning the company around, and keeping jobs. You know that it takes time to establish relationships. I believe in meritocracy, trust is not entitled, but earned and built over time. I think that paying everybody on time helped build our credibility, and changed peoples’ perceptions about us. Today, I am happy to report that we enjoy very close relationships with just about every brand we are partnered with.
What can we expect from Active in 2013?
A lot of exciting things are happening at Active this year. For starters, we have just relocated our HQ to a new space in Rancho Cucamonga. The building is dedicated to the culture and lifestyle of skate and snow. It houses a large skate park for everyone to enjoy. Next, we are planning to remodel our Irvine Spectrum store in collaboration with key brand partners to tell their stories within the Active narrative. We are also upgrading our Ecommerce platform this year to keep up with the latest technology and to better serve our customer. From a strategic position, we are focusing more on bringing excitement back into footwear, a category which has been pretty dull and uninspiring over these last few years. As you know, giving back has always been part of the DNA of Active, and this year we are exploring the idea of incorporating a giveback program into our house brand, one that will support the local communities in which we have a presence in.
We think of Active as part of the ecology of this industry and culture, and within this ecology, we see ourselves playing a vital role of nurturing and supporting the lifestyle of skate/snow, being a platform for young and emerging brands, and telling brand stories in a compelling and authentic manner. It requires constant energy and resources to maintain that balance between the “taking” and the “giving back.” In describing Active, the word Kaizen comes to mind, a Japanese word for continuous improvement. It’s a philosophy we have always espoused at Active. We know that our only real competition is ourselves. For us, it means to forge our own path by continuously striving to do better in every aspect of our business, and doing it in a disciplined, ethical and humanistic way.