Why Rothy’s is expanding its store fleet
The footwear brand Rothy’s is “stepping on the gas” when it comes to opening more stores, President Dayna Quanbeck told Modern Retail.
Rothy’s, which launched online in 2016, opened its first brick-and-mortar store in 2018 in San Francisco. It now has 23 stores in the U.S., including three in New York City, one in Boston and one in Chicago. Rothy’s will open three more stores by the end of this year, two of which will be in Walnut Creek, California, and Dallas, Texas. The third location is still being finalized. Rothy’s hopes to eventually operate 50 to 75 stores in the U.S. and is considering wholesale partnerships abroad, as well.
Like many other digitally-native brands, Rothy’s is trying to figure out the best balance between retail channels. Today, after eight years in business, most of Rothy’s sales still come from e-commerce. But physical retail is becoming a bigger part of Rothy’s business, especially because so many shoppers like to try on its shoes and accessories in person. In fact, half of the customers that come to Rothy’s stores are new to the brand.
In 2023, Rothy’s saw a 37% increase in retail sales, per the company. In 2024, its stores are showing “meaningful comp growth, year to date,” Quanbeck said. Rothy’s will always be digitally-native, she explained, but the brand wants to make sure it’s not over-penetrating any particular lane. “We want to expand customer access to our brand… And we have always known that retail would be in our future,” Quanbeck said.
Rothy’s is best known for its eco-friendly footwear and says it has converted millions of single-use plastic water bottles into shoes like ballet flats and pumps. More recently, Rothy’s expanded into other categories, including bags and men’s shoes. In 2021, Alpargatas, the Brazilian owner of Havaianas, acquired a 49.9% stake in Rothy’s and valued the brand at $1 billion. While Alpargatas’ revenue dipped last year, it’s now seeing growth, and Rothy’s sales for the quarter ending on May 10 were up 10% year over year to total $34.3 million.
Rothy’s views its stores as a way for customers to touch and feel products, learn more about the brand’s sustainability mission and discover categories besides shoes. Rothy’s accessories, for instance, over-penetrate in retail, so Rothy’s is more prominently highlighting them in storefronts. Rothy’s is also using its stores to push in-store exclusives like wristlets and host community events like phone banks for a New York state recycling bill. Earlier this month, Rothy’s installed a water refill station outside its new Fifth Avenue store and gave away Hydro Flask bottles to the first 250 passersby who were willing to trade in their plastic bottles.
“Connections online are very one dimensional,” Quanbeck said. “We have this amazing community of consumers, and our stores serve as this place where we can really activate that community.”
Rothy’s two biggest markets are New York City and Washington, D.C. and the brand largely relies on customer data to figure out where to put new stores. Its stores have also gotten bigger as the brand has grown. Its first location in San Francisco is 300 square feet, but the average Rothy’s store is now 1,500 square feet.
Quanbeck acknowledged that finding the right store size is “kind of like Goldilocks.” The company wants to make sure it has room for all of its products, including makeup bags and crossbody bags, but also doesn’t want to cram the floor with merchandise, according to Quanbeck. “We have to get it just right,” she said. “It’s hard when you walk into an oversized store, and as a customer, you feel it.”
Quanbeck added, “It’s hard to have a crystal ball of all the amazing product we’ll have in five years, but we are focused on that nimbleness and agility to be able to work around that.”
More digitally-native brands are opening storefronts to reach customers who want to shop in person. Athleisure brand Vuori is in the process of opening 100 new brick-and-mortar stores in the U.S. by 2026. Maiden Home, a furniture brand, opened its first flagship store last September in New York. Beach bag brand Aloha Collection hopes to operate between 15 and 20 stores by the end of 2026.
Stores can be a great way for brands to re-establish trust with their online audience, Alec Zaballero, managing executive at design firm TPG Architecture, told Modern Retail. “Digital brands are in the business of creating brand advocates,” he said. “And so when you put a physical store into a neighborhood, you empower your brand advocates to spread the word.”
Consistency throughout that process is key, though, Zaballero stressed. That includes being consistent with visual merchandising and brand messaging so that locations across the country have a similar look and feel.
“You have to bear in mind that… the brand already interacts with its customers online in particular ways,” Zaballero said. “There’s a process, right? You don’t want your customer to have to relearn that process.”