How Rothy's built a DTC footwear brand with staying power

0:09Shira Ovide:Hello and welcome to the Modern Retail Podcast, our show that covers the ways the retail industry is changing and modernizing. I'm Special Projects Editor Melissa Daniels. 2026 has been a roller coaster for DTC brands. Not only are they contending with trade policy shifts and a ton of consumer pressures, but there's this growing awareness that it takes more than a great product and a great website to run a sustainable company. We dug into this topic at a recent members-only town hall and earlier this year in a podcast conversation about the quote-unquote DTC 3.0 era, but I wanted to go deeper into the strategies that companies are using to build and protect their DTC brand while still growing across channels.

0:53Shira Ovide:And it's harder to find a better example of someone who's done this than Rothy's. They launched in 2016 and started going viral a couple years after that for its washable, eco-friendly knit flats. Now the company has surpassed$200 million in revenue. They've got 40 owned stores, plus a wholesale presence in Nordstrom. So joining me today to unpack how Rothy's has sustained this DTC journey over a decade is CEO Dana Kwanbeck. Dana, thank you for coming to the show. Thank you, Melissa. It's really great to talk to you about this, especially at this time as you look back at 10 years of Rothies. This year has seen other companies from your initial era really fall by the wayside or take dips into other areas that maybe are not aligned with their original purpose, say footwear, going to AI, if I can think of one company.

1:47Shira Ovide:And you yourself as a professional in the retail and e-commerce industry have seen a vast amount of changes and dealt with a lot of different challenges that companies can be facing. So I wanted to start by getting your thoughts on, you know, why you think Rothy's has been able to sustain, you know, have there been any key pillars or strategies that you feel like have set you all apart?

2:12Rebecca Geller:Yeah, well, I mean, I think at the end of the day, it starts with the product. And I think, you know, Rothy's found really early success with product market fit in sort of creating these iconic front of the closet products with high frequency of use and a viral customer that came along with us. And I think, you know, born online, we saw very early the importance of diversifying channels and began that effort alongside our other D2C peers, for sure, digitally native peers. But we took a possibly a different a different cut at that. And we're very disciplined in our growth. And, you know, I think that's something that we were born with.

3:00Rebecca Geller:It took Roth and Stephen four years to from idea to market with Rothies. Everything we do is very intentional. And, you know, even our foray into wholesale has been very intentional. And I think about the interplay of growth and speed all the time. That's my job. But I think we were really focused on doing things well and doing things that can endure versus doing things quickly, I would say, by and large.

3:28Shira Ovide:Let's use that lens to talk about your owned presence. You know, when did you start getting into physical retail? What were the pros and cons there? You know, because 40 stores is a great footprint, but it's not necessarily like as ginormous as other 10-year-old companies might have.

3:45Rebecca Geller:That's right. We opened our first store here in San Francisco on Fillmore Street, and that was in 2019. It's a tiny little 300-square-foot store. It was overnight success, but we were happy with just that one store. This was seven years ago when I joined Rothy's. And I was coming at the time from a large brick and mortar bankruptcy and was like, I need a minute. So I'm with this, you know, big online present and one tiny little cute little productive store. But I think, you know, we saw the community that we can build in in in person. We saw sort of just a small inkling of what a multi-channel retailer really could look like.

4:32Rebecca Geller:And we started to build that. And doing it our way, which is, you know, making sure that the space is perfect for us, making sure that the customer, you know, that we have in this market, you know, shops in a certain area, using our data to our advantage. And, you know, I would say that we're more discerning than most in choosing the locations that we have. So I think, yes, you're correct. 40 stores is not probably our end game. And we continue on a path to have somewhere between 70 and 80 in the U.S. But I think that getting here was very disciplined. And it's paid back because all of our stores are profitable, they're high producing, and it's something that we can scale versus something that's not scalable.

5:32Yeah.

5:33Shira Ovide:Talk to me about location choice. I mean, you mentioned size. Are you still in that 300 square foot sort of ballpark for your leases? Are you looking a little broader? We talking high streets, we talking malls. I would love to hear a little bit about your location strategy.

5:48Rebecca Geller:I wish I wish 300 square feet. I mean, that would be a very, very productive strategy. What we found very quickly is that you just cannot fit enough shoppers in 300 square feet.

6:00Shira Ovide:No, not when you have as many excuses you have now, too. It's one thing when you have a flat. It's another when you have dozens of pairs to show off.

6:09Rebecca Geller:That's right. That's right. And really wanting to service customers, right, and allow them to try on. And so our stores are around 1 ,500 square feet, and that's played really well for us. And it's a mix of mall-based centers because, you know, the Northeast, when it's a blizzard outside, going to the mall sounds great. When it's really hot in Texas, people go to the mall. And then High Street, of course. So I think it's a blend of indoor, outdoor, and just meeting our customer where she is.

6:40Shira Ovide:Yeah. I feel like the mall thing, the DTC to mall pipeline, I think is maybe undervalued. Because when you think about that foot traffic, it really is powerful. But maybe for some digitally native brands, it felt like, oh, I don't want to be in a mall that's not cool enough for me. Am I totally wrong in that impression?

7:02Rebecca Geller:No, you are totally right. And it took me a couple rounds to convince the founders that malls are good for business. You know, I think malls got such a bad rap over the last sort of decade. And really, in the last five years, you can see some of these centers and the reinvestment that has went into them really paying back. And, you know, the way that consumers shop and discover, it's different than it was, you know, even five years ago, right? So we're continuing to evolve. But yeah, it's about a blend and not one thing solely.

7:40Shira Ovide:Right, right. You had mentioned that, you know, your target is, you know, maybe 70 to 80 stores in the U.S. in the coming quarters here, coming years. But what about going beyond the U.S.? Where are you with international growth? Because that's one place where I've seen DTC brands really be aspirational and maybe too much too soon.

8:02Rebecca Geller:Yeah, this is the hard thing for me because I see our customer as such a global one. Our opportunity is such a global one. And going back to that discipline and rigor and not wanting to take on too many things too quickly, really diluting your growth efforts, right? We have deliberately slowed our international plans to get our footholds in the U.S., and that's paying back. We do have strong partnerships in Europe, in the U.K. and in Europe. You know, we have a shop and shop in Liberty. We are at Le Bar Marche, El Courtier in Glass. And we will, in the not too distant future, really step on the gas in terms of international expansion.

8:43Rebecca Geller:But when you only have 40 stores here in the U.S., it's hard to say, you know, I'm not going to go full force against those 40 before I add another 40 outside of the U.S. There's so much more that we can be doing here. So it's about a balance. But it is hard not to be distracted by all of that growth and prioritizing and patience is something that we practice here at Rothy's.

9:09Shira Ovide:Yeah, I want to circle back to the wholesale stuff. But what you just mentioned about that discipline and that patience makes me think a lot about how you as a leader of an organization make sure the team is aligned with that and on pace with that and not taking on too much too soon, but also not stifling potential growth opportunities, right? I mean, how do you organizationally balance that? What's the magic there that can stop us all from feeling frantic, but also still progressing.

9:41Rebecca Geller:Oh, gosh. It's my life's work right now.

9:46Shira Ovide:You know,

9:49Rebecca Geller:we want to maintain, you know, somewhere between 10 to 15 percent of our capacity for testing, for moonshots, for things that don't, you know, want to have to pay us back. But we do constantly come back and ask the question, can we do this better than it's being done today? Because sometimes we'll have these great ideas that everybody else is doing. And just because it's out in the market doesn't mean that it exists for Rothy's to participate. If we have a new novel, a more sustainable, a more innovative way to launch into something than exists, then yes, we should go into it. But we really think about that a lot.

10:31Rebecca Geller:What can we do innately our way that makes something better, that makes it more sustainable, that makes it stickier? That's kind of the question that we ask before we embark on any of this test. And, you know, I think that's helped the team really stay honed in on innovating around our moat and what we do now really well. Yeah. But it doesn't mean you stop testing. You have to keep going. You have to keep having crazy ideas and ask what if and when and how and why to push your brand forward.

11:11Shira Ovide:that's like the DTC magic that's the digitally native magic right it's what is the sort of up and coming thing that we can jump on or that's around the corner that makes sense for us in our customer and that's where I think sometimes you see brands really break through or break through in a new way you know and start a new era for themselves which is actually a good segue back into the wholesale conversation maybe you know talk to me about your relationship with with Nordstrom and how you've made sure that that's felt right for Rothies and also any like, you know, halo effect that you get from that.

11:46Yeah.

11:47Rebecca Geller:Rothies approach into wholesale has been very deliberate and we approached Nordstrom through really a partnership. You know, we have one website and 40 stores. That's 41 points of distribution before you add wholesale And overnight being in all Nordstrom doors doubles that, right? And so really wanting to work with them to be able to tell our brand story, to be able to, you know, hold a space for sustainability that's not being held broadly on wholesale footwear floors, you know, making sure that they sort of respected and also wanted the same things out of that. And I admire Nordstrom. They have really been a platform to launch so many incredible brands.

12:34Rebecca Geller:And they're a wonderful partner. And seeing them go through their sort of journey into being private and really leaning on that, you know, the discovery, the brand discovery journey, again, is exciting. And, you know, we're just getting started. I would say wholesale is nascent for us. But what we can see in the data and something that I was really excited to see last week is we can see pockets of the U.S. where we don't have a huge footprint from our own stores really light up on e-commerce. And so we know that, and from an awareness and searching, we can see Google search, we can see that it's working, that it's haloing back to just broader brand awareness.

13:20Rebecca Geller:But most importantly, you know, we know when you can discover the brand IRL, it's so much richer. You build a richer attachment to the product. You know, it starts sort of this engagement in a different way than acquiring customers online. We like both. We want both. But really making sure that, you know, the touch and the feel and bringing the brand to life, RRL is there. And wholesale has been extraordinary for that.

13:49Shira Ovide:Yeah, that feels especially relevant to me in footwear because buying shoes online is still scary for me. That's right.

14:00Rebecca Geller:Shoes and jeans and bathing suits. Shoes and jeans. They're the hardest thing. You have to try them on. And we make dead fit product. So you have to be able to experience it. And maybe you need to go up half a size. Maybe you need to go down half a size. But being able to get the right fit is so critical to being able to wear shoes for 10 years, right? So it was something that we identified early on and always knew that this would be important.

14:28Shira Ovide:How do you make sure that you're not losing your brand story in that transition? Because like, I think that maybe is the fear for some DTC or digitally native or really strong, you know, especially, especially these founder led brands, like they've got their vision and their story, man, and they don't want it to just be a box on a shelf. So how do you sort of make sure that you still feel like Rothy's when you're showing up in Nordstrom?

14:54Rebecca Geller:Well, we do a lot of activations. We took over Make Room for Shoes this year. We work with the brands. We just took on the atrium at Liberty for the month of June, and we did a big activation that only a California brand could do. And so we stay very engaged with our partners to make sure that we can do these sort of activations with them and with their customers. But here's what I would say to founder-led, you know, D2C only. Many incredible brands and some of the best brands of our lifetime were built starting in wholesale and have only reached D2C now. And think about us. We start with a roster of customers that can really lead who we partner with and how we partner with them.

15:50Rebecca Geller:And guess what? Our customers are shopping there anyway. So it's not like you're acquiring all new customers. Some of it is just getting in front of the customers that maybe haven't engaged with you in a while. So I like to think of us, Retail 3.0, going backwards, taking what we know about our customer base and going to partners versus the other way around. And I like to think this is a little easier than how it was done in retail olden days. Data, data, data. Right, right. That's right. And you have to be comfortable losing a little bit of that control. And honestly, I think it's the beautiful part of this journey is that you may be opening access to somewhere that you wouldn't have went otherwise, right?

16:42Rebecca Geller:And that's what I'm hoping to see in this data. And I'm hoping that when we become one of those big brands, like the ones we all admire, that we look back and say, oh, wow, we wrote that playbook.

16:56Shira Ovide:See, that makes me want to return to what you said at the top of this conversation, which is it's all about product. Because when you have those many touch points and you're able to get different types of product into different types of customers, that's an awareness, you know, lightning bolt here, there and everywhere. And as I mentioned, you had started with this flat, the point. It's knit. It's washable. It's sustainable and eco-friendly because it's made from recycled bottles and all these wonderful bona fides. But now you sell so many more types of footwear and you can service so many more customers.

17:33Shira Ovide:What does the, I guess, behind the scenes look like there when you guys say, hey, we're ready to try a new style. We're ready to get into sneakers. We're ready to get into Mary Jane. How do you know that you're going to succeed there without alienating your original core demo?

17:51Rebecca Geller:Oh, that is a really good question. And I think it's why we've stayed really close to our moat, you know, starting with the ballet flats and then, you know, going into Mary Jane's, which feels adjacent. And, you know, even the sneaker, the Ivy sneaker that we launched, it's feminine. It's not a performance sneaker, right? So it feels very tangential to, you know, sort of the dressier, you know. Yeah. It's really a diverse way to style a bunch of different shoes. But if you think about something like the clog, the clog doesn't look like it's related to the point and flat. And the clog has become such a meaningful part of our business.

18:34Rebecca Geller:So I think when we stay true to our core tenants, which are that style, the comfort, the washability, the sustainability, and we design product through that lens, we have more permission to go into things like a sneaker. you know, I don't know what would be next, but I like to think that sensibility lends itself really well to handbags. And we know that we have a nice and handbag business, but, and accessories, right? Style, comfort, usability, washability, sustainability in that order. I think that is sort of our guiding light in what comes next, that we found tremendous success in not going too far and making sure that we don't compromise one of those in the new development or something like a clog or a sneaker that feels very different.

19:26Shira Ovide:So when you're on this journey of iterating new product, going for moonshot ideas, you know, how does that reflect back onto your existing catalog? You know, I keep coming back to the point. You had a 0.2.0. This fall, we were getting a 0.3.0. You know, talk to me about the iteration there and what you were trying to do in evolving that product?

19:53Rebecca Geller:Well, we've been, you know, innovation in R &D has been, it's not to throw in too many acronyms, it's in our DNA. It is part of our sort of founding premise. And, you know, the verticality of our integration, owning a factory means that we can be constantly seeking updates and improvements. And, you know, the 0.3.0 has things like stitch to sole. So it's glueless. There are things that we're bringing in, you know, more comfort, more style that, you know, we've heard from our customers. So we do listen and incorporate. And some of it is just, you know, how do we continue to push ourselves forward?