Heelys shoe

Heelys is on a roll

Stacey Vanek Smith Dec 8, 2006
Heelys shoe

KAI RYSSDAL: You’re in the mall getting a handle on that holiday shopping. And some kid goes zipping past you. Rollerskating. Only you don’t see any wheels. Meet Heelys. They’re those sneakers you might have seen with a wheel at the heel. They’re 60 bucks a pair and kids just can’t get enough of them. Today, Wall Street started loving them too. Heelys went public on the Nasdaq and kept rolling all day. Marketplace’s Stacey Vanek Smith reports.

STACEY VANEK-SMITH: “Freedom is a wheel in your sole.” No, it’s not a line from a Bob Dylan song, it’s the slogan of Heelys roller-shoes.

And massive demand from kids between 6 and 14 has Heelys going full-speed ahead. Sales quadrupled in the first nine months of this year, topping $100 million.

Retail consultant Howard Davidowitz uses another barometer.

HOWARD DAVIDOWITZ: Go to Central Park for example, and see the number of people doing this.

Davidowitz says adding to Heelys’ success is the fact that specialty retailers like Crocs and Abercrombie & Fitch have become the hippest stocks on Wall Street. And it’s not just because they look good.

DAVIDOWITZ: If you look at the specialty sector return on investment, and you compare that to any other, it’s the highest return on investment, it’s the highest profitability, and it’s the highest cash-flow.

But don’t get out your checkbook just yet.

DAVID MENLOW: One-product companies have a very classic history of burning themselves out almost like a shooting star.

David Menlow, president of IPOFinancial.com. Ninety-nine percent of Heelys sales this year have come from roller-shoes. Menlow says Heelys needs to diversify, because fashions change.

MENLOW: It will be that the kids between one another will say, “Oh, you’re wearing Heelys. That’s so 5 minutes ago.”

Another cloud on the horizon: the shoes have been banned from many schools and malls. They’ve even been blamed for several accidents.

In New York, I’m Stacey Vanek-Smith for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.