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SHOES OF PREY: MANAGING THE DARK SIDE OF VALUE CO-

Sanjit Kumar Roy and Gaganpreet Singh wrote this case solely to provide material for class discussion. The author does not intend
to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other
identifying information to protect confidentiality.

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Shoes of Prey (SOP), the Australian fashion brand launched in 2009, became famous for its unique approach
to the footwear market and attracted celebrity customers, including Rihanna, Kate Middleton, and Elle
Macpherson.2 SOP broke ground with its innovative e-fashion retail model of offering customized shoes
through on-demand manufacturing,3 which allowed customers to select the design, size, and exact product
specifications of their choice, and produced goods exactly as the customer ordered.4 The business idea
increased customers’ perceived value of the shoe through an “I designed it myself” effect, and offered
customers a sense of ownership as “creators.”5

This co-creation strategy also improved SOP’s initial business performance metrics, with profits being
achieved in the early stages of operation.6 SOP was also successful in attracting world-class investors and
business advisers to help realize its vision.7 During scale-up, the mass customization and co-creation strategy
brought numerous challenges.8 SOP’s inability to “truly crack mass-market adoption” forced co-founder Jodie
Fox, in August 2018, to put the business on pause and halt orders.9 In this dilemma, Fox was considering the
option of either selling the business or rebooting it “with substantial changes.”10 With rebooting the business,
some of the changes that Fox would need to immediately address included how to instill the idea of the co-
creation culture in the business model, when the company had identified its target consumers as the mass
market. Also imperative was deciding on the alternative market research techniques that could correctly gauge
the perception of co-creation in the mass market. Moreover, understanding the influence of co-creation on
marketing mix variables such as pricing and channel migration would be essential to holistically provide a
new outlook in the revamped business model that would be focused on mass-market consumers.

SHOES OF PREY’S EARLY DAYS

SOP was launched in 2009 by Jodie Fox, Michael Fox, and Mike Knapp. Jodie Fox conceived the idea of
offering custom-made shoes to women based on her own consumer experiences,11 which she described as
follows:

I was solving a problem of my own. I’d always liked shoes, but I never loved them because I
couldn’t find exactly what I was looking for. Either it wasn’t quite the right colour, there was an
embellishment I didn’t like, not quite the right heel height.12

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Jodie Fox had been referred to a cobbler in Hong Kong who customized shoes. She scheduled a layover in
Hong Kong and experienced the first thrill of designing her own shoes. She recalled the moment when,
“within 1.5 hours, I designed 14 pairs of shoes. I had the time of my life.”13 The shoes were delivered to
Australia, and her bespoke shoe collection of unique creations soon became famous among her colleagues
and friends, who also began ordering custom-made shoes. Thus, the idea for SOP was sparked, and the
business was launched.14

One difficulty with the founders’ grand plan was that none of them had any background in footwear
manufacturing or marketing.15 Spending time in factories, meeting suppliers, and reading everything about
the industry available in the public domain confirmed their belief that the idea had potential. By the end of
the investigatory period, the team had a concrete blueprint to convert their idea to reality, and they received
general buy-in from multiple suppliers.16

THE BUSINESS MODEL

Customization was one of the most compelling strategies adopted by fashion brands in the past half-decade.
For instance, Burberry’s scarf bar allowed customers to design their own cashmere scarf, and Gucci offered
customization options for its most popular bag in an initiative named Gucci DIY. 17 Adopting a similar broad
framework, SOP was ahead of the footwear market with shoe customization.18 SOP became a fashion
e-tailer that turned female shoe-shoppers into co-creators by offering them the tools to design bespoke shoe
styles online for delivery anywhere in the world.19 Instead of incorporating customization as a
differentiating business strategy, SOP was founded on differentiation as a principle.20 Each customer
received a co-created, personalized, monogrammed pair of shoes with complementary nail polish and
beauty products. The product was beautifully packaged in premium boxes with personalized cards, and they
were delivered by hand.21

SOP’s early success was attributed to the unique software and technology at the core of the business model.
The technology allowed customers to edit and design customized shoes that were not available in the regular
market. The unavailability of existing technology to meet the standards desired by SOP leaders forced the
in-house technical team to build the website from scratch. SOP offered 12 different types of shoes, including
widely popular ballet flats, heeled Oxfords, and wedge sandals. The 12 types of shoes were available in
more than 300,000 trillion permutations in terms of size, type of leather, heel size, style of sole, and colour.22

The business model that was grounded in a co-creation principle also posed logistical issues. The biggest
challenge in mass customization was the manufacturing element.23 In the beginning, SOP orders were
manufactured through a proprietary production system model in which third-party manufacturers were
handling both SOP’s customized orders and other vendors’ mass-volume production under the same roof.24
Fox realized that scaling up the business required forgoing its reliance on third-party manufacturers; hence,
gaining in-house control over production became paramount.25 She admitted that “to truly marry real
customization and immediacy was a way bigger challenge.”26 Eventually, SOP progressed to an in-house
production strategy. Fox explained:

These manufacturers rely on volume, with razor-thin margins, so it’s incredibly difficult to step
outside of that and try anything different. When we started the business, we were clear that we were
not a manufacturer. But it’s not possible for customization to scale without strong manufacturing
behind it.27

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SOP’s first in-house manufacturing facility was commissioned in Dongguan, China, a city known for its
shoemaking expertise. Christopher McCallum, SOP’s chief operating officer, handled the daily operations.
SOP used internally developed software to ensure the quality check. The facility also implemented lean
manufacturing to speed up production.28 In the beginning, when SOP relied on third-party manufacturers,
the lead time from design to delivery was 10 weeks. After shifting to in-house production in 2016, SOP
was successful in curtailing the production time frame.29 On manufacturing, McCallum noted,

We’ve refined our manufacturing processes and now produce and deliver custom designed shoes
in two weeks guaranteed, worldwide. But we don’t stop there. Customers can expedite delivery and
receive their shoes in as little as one week. . . . The time it takes us to produce a pair of shoes from
scratch is faster than the average time it takes for our courier partners to ship those shoes.30

SOP’s niche shoe business grabbed the attention of prominent investors, including Atlassian co-founder
Mike Cannon-Brookes and American venture capitalist Bill Tai, as well as venture capital funds such as
Blackbird Ventures, Southern Cross Venture Partners, and Khosla Ventures.31 In totality, SOP had raised
US$25.9 million32 in six rounds.33 The partial funding was also used to set up a second manufacturing
warehouse in China.34 Explaining the essence of the business model, Fox said,

Honestly, Shoes of Prey is not about shoes. It is about this whole idea of getting you what you want,
when you want it, and that will extend into many products. . . . We’re reimagining something that was
a product of days past with the capabilities we have today. . . . That is why technology is so exciting.35

SOP’s business model attracted Janie Bryant, an Emmy Award–winning Mad Men costume designer who
created seven shoe designs for SOP. Some of her prominent designs included high-heeled purple snakeskin
sandals, a pair of red booties, and two-toned ballet flats, all of which could be tweaked with customization.36

Customization on a Mass Scale

Fox undertook market research to determine whether mass-market fashion customers had an appetite for
customized shoes. The survey results supported the premise that mass-market consumers preferred SOP’s
business model.37 McCallum highlighted that for the co-creation strategy to work in a mass market, four
challenges needed to be addressed—faster shipping, an easing of the shoe design experience, a reduction
on premium prices, and an extension into distribution channels.38 Over the years, SOP had adopted several
strategies that improved all the above dimensions. Some of these included re-engineering the shoe design
interface,39 in-house manufacturing to reduce production costs,40 and inking distribution deals with David
Jones Limited (David Jones) in Australia and Nordstrom Inc. in the United States.41

THE DISTRIBUTION STRATEGY

SOP started as an e-tailer. Although e-commerce was effective from a design standpoint, this distribution
strategy had its own limitations.42 As Fox described, “We had a healthy business, but we found that women
wanted to know what the shoe felt like on their foot. That only comes from having a retail presence.”43
Hence, in January 2013, SOP opened its first brick-and-mortar location inside a David Jones department
store in Australia and became a multi-channel enterprise.44 Fox explained the David Jones partnership:

We haven’t got any experience in offline retailing. David Jones has been around for more than 100
years, they’re a stable brand. . . . We’ve also created something that really stretches the rules of
what online retailing is, and has been, and David Jones is going to come on that journey with us.45

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The designated area in the David Jones stores was exclusively branded as SOP to enable customers to
browse custom-made shoes that had been posted on SOP’s website. The technology interfaces, such as
tablets available at the stores, also allowed customers to co-create their own designs.46

Market analysts condoned the partnership, with Retail Doctor Group’s managing director, Brian Walker,
noting, “They’re aligning themselves with credibility, and reducing their own infrastructural costs
associated with opening their own stores.”47

In 2014, the US market contributed 14 per cent to SOP’s turnover.48 To increase its revenue from the United
States, SOP struck a deal with US department store Nordstrom to open six retail outlets within Nordstrom
stores. SOP was a great resource for Nordstrom customers, who typically wore either very small or very
large, difficult-to-find sizes.49 The SOP outlets helped Nordstrom customers design their own shoes online,
including the length and width from size 2.5 to size 15, the heel height and style, colour, pattern, and
fabric.50 Fox shared her viewpoint on the deal with Nordstrom, saying, “This is such an important and
exciting deal for SOP, it makes designing your own shoes truly a mainstream option. . . . The US market is
absolutely enormous just by [the] sheer number of people.”51 Fox also commented on the cultural
differences with SOP’s foray into the US market:

We might speak the same language and watch the same TV shows, but we are so different. . . . Our
first hire has been a full-time PR [public relations] person in-house and that has helped us
understand those cultural translations. It’s a different environment in the way that you speak to
press, it is quite transactional.52

In 2016, SOP’s management team decided to revamp the company’s distribution strategy by taking it back
to where it all started—online only. It had become apparent that offline retail contributed only 15 per cent
to the business but increased costs by 25 per cent.53 Despite the failure, Fox acknowledged that the
partnerships with both David Jones and Nordstrom had given SOP great brand exposure, increased
customer engagement, and offered valuable insights into future growth opportunities.54 Fox reflected on the
termination of the partnership:

The strategy that we often talk about with this kind of thing is just bullets and then cannonballs.
You shoot a few bullets in that direction first, see how it works, and then if it seems like it’s the
game changer for the business then shoot the cannonballs that way too. But for us we kept looking
at that, and what we see is that it is actually online.55

THE PRICING STRATEGY

SOP employed an optional pricing strategy, whereby prices varied depending on the level of customization.56
The entry price for a pair of SOP shoes was $130.57 Each add-on, such as a bow, ruffle, or rosette, increased the
price by $10, up to $50 for custom leathers, $75 for a personal inscription, and $100 for an exclusive designer
collaboration.58 On average, customers paid $220 for SOP shoes,59 although some customers paid as much as
$450.60 These prices were significantly less than other designer shoes, such as Barneys, which sold for as much
as $3,000 a pair.61 Hence, although SOP’s optional pricing strategy was appropriate for a niche market, when it
was replicated in the mass market, the prices were perceived as being expensive.62

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IMPROVING DELIVERY TIME

Improving delivery time was a key challenge to acknowledging success for SOP.63 SOP’s reworked
production strategy was described as follows:

Typically . . . production happens via a “batching” method, where different teams of technicians
tackle different steps of production at the same time—that way, it comes together quickly. For
customized retail, orders can only be filled as they are placed, meaning batching doesn’t work—
technicians would be waiting around until they had something to do, causing inefficiencies. . . . So
the team developed a software that enabled efficiency throughout the production process without
needing large volumes. That meant a transparent process: Thanks to a tracking technology, Shoes
of Prey can see what step any shoe in the factory is at, at any given time, and pass it off to the next
team in the production cycle that’s ready to take it on. Because Shoes of Prey offers more sizes,
heel heights and widths than most shoe manufacturers, it 3D-prints the molds for every shoe
ordered on demand.64

The changed production process enabled SOP to reduce its delivery time to two weeks.

THE CHANGE IN MARKETING STRATEGY

Once SOP was successful in improving its delivery time, Fox decided to focus on other aspects of the
business, such as creative and marketing work, to improve the company’s success in the mass market. 65
SOP brought in Lizzie Francis, former chief marketing officer of US-based online fashion company Gilt
Groupe, to lead SOP’s marketing department and improve its brand positioning and other aesthetic
interfaces.66 This move signified a major strategy shift by SOP toward focusing less on the novelty
dimension of customization and more on fashion and style.67 SOP launched a campaign that involved
working with micro-influencers,68 who each designed a collection dedicated to people they had found
inspirational. Some of the influencers who participated in this campaign included Sex and the City illustrator
Megan Hess, travel and fashion influencer Kim Jones, and Australian beauty editor Eleanor Pendleton.
Pendleton termed her collection “The Renegades” and dedicated it to women who had shaped and inspired
her life, including Lisa Messenger, editor-in-chief of multimedia platform Collective Hub, and Kat Moses,
founder of talent agency MGMT.69 Pendleton explained,

Each shoe in my collection is named after a special woman in my life who inspired me, in one way
or another, to push the boundaries and go after what I am passionate about. They didn’t conform to
conventional wisdom or play by the book; they set their own agendas, paved their own paths and
nailed it.70

CO-CREATION FAILURE IN THE MASS MARKET

The early business performance indicators for SOP were compelling. SOP was successful in building a
global community of shoe lovers, funding was secure, profits were reflected early, manufacturing
optimization and reduction in lead time were achieved, and the customer experience continuously
improved. However, similar to other companies, SOP faced challenges behind the scenes. While all the
metrics indicated positive positioning, SOP was unable to truly crack mass adoption.71

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THE WAY FORWARD

In August 2018, against the backdrop of SOP’s challenges, Fox announced on Instagram that the business
would be pausing all orders to “actively assess” the options of either selling the business or rebooting it
with “substantial changes.”72 A successful comeback would require a significant turnaround plan in
managing the dark side of co-creation. Specifically, a detailed strategy would be required to consider how
a co-creation culture could be instilled in business models targeting mass-market customers. Moreover,
informed thought on numerous ways to influence consumer behaviour toward co-creation could assist in
the successful execution of a co-creation model. In addition, it would be a core business imperative to
develop a pricing model that could influence co-creation among mass-market customers and thereby
successfully leverage opportunities around retail channel migration.

Sanjit Kumar Roy is a professor at the University of Western Australia, and Gaganpreet Singh is an
assistant professor at OP Jindal Global University.

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ENDNOTES
1
This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives presented in
this case are not necessarily those of Shoes of Prey or any of its employees.
2
Emilia Mazza and Nic White, “‘Behind the Scenes We Faced Struggles’: Australian Shoe Retailer That Designed Shoes for
Rihanna and Kate Middleton Shuts to ‘Consider Options’ after Failing to ‘Crack’ the Mass Market,” Daily Mail, August 28, 2018,
accessed September 12, 2019, www.dailymail.co.uk/femail/article-6105219/Shoes-Prey-shut-founder-Jodie-Fox-confirms-
business-struggles.html.
3
Jessica Pallant and Sean Sands, “Shoes of Prey and the Pros and Cons of Mass Customisation,” SmartCompany, September 13,
2018, accessed May 26, 2019, www.smartcompany.com.au/industries/retail/shoes-of-prey-pros-cons-of-mass-customisation/.
4
Ibid.
5
Ibid.
6
Ibid.
7
Ibid.
8
Ibid.
9
Mazza and White, op. cit.
10
“Shoes of Prey Stops Taking Orders to ‘Actively Assess’ Its Options,” Startup Daily, August 28, 2018, accessed August 8, 2019,
www.startupdaily.net/2018/08/shoes-prey-stops-taking-orders-assesses-options/.
11
Sarah Kimmorley, “Shoes of Prey, One of Australia’s Original Startup Successes, Is on the Brink of Collapse,” Business Insider,
August 28, 2018, accessed May 26, 2019, www.businessinsider.com.au/shoes-of-prey-pauses-order-assesses-sell-option-2018-8.
12
Ibid.
13
Nathan Chan, “161: How Jodie Fox Turned Her Passion for Shoes into a Successful Online Business in 2 Months,” foundr, August
21, 2017, accessed May 27, 2019, https://foundr.com/jodie-fox-shoes-of-prey/.
14
Ibid.
15
Ibid.
16
Ibid.
17
Megs Mahoney Dusil, “Introducing Gucci DIY: You Can Now Customize a Gucci Bag,” PurseBlog, May 14, 2018, accessed June
19, 2019, www.purseblog.com/gucci/gucci-diy/.
18
Tyler McCall, “How Shoes of Prey’s Design Technology Could Change the Way We Shop,” Fashionista, July 29, 2016, accessed
May 28, 2019, https://fashionista.com/2016/07/shoes-of-prey-technology.
19
Michelle Hammond, “Shoes of Prey,” SmartCompany, April 15, 2011, accessed September 12, 2019,
www.smartcompany.com.au/startupsmart/advice/startupsmart-growth/shoes-of-prey/.
20
McCall, op. cit.
21
Sling & Stone, “Shoes of Prey,” accessed June 1, 2019, http://slingstone.com/case_studies/shoes-of-prey/.
22
Lauren Sherman, “Shoes of Prey Raises $5.5 Million for Custom Footwear,” BOF, December 2, 2014, accessed May 28, 2019,
www.businessoffashion.com/articles/bof-exclusive/shoes-prey-raises-5-5-million-custom-footwear.
23
Zoë Henry, “What This Startup Shoe Company and ‘Mad Men’ Have in Common,” Inc., April 27, 2015, accessed May 28, 2019,
www.inc.com/zoe-henry/this-company-puts-design-into-the-customer-s-hands.html.
24
Hilary Milnes, “How Custom Footwear Retailer Shoes of Prey Cut Its Delivery Time to Two Weeks,” Digiday, May 8, 2017, accessed
May 28, 2019, https://digiday.com/marketing/custom-footwear-retailer-shoes-prey-cut-delivery-time-two-weeks/.
25
Ibid.
26
Emma Thomasson, “Shoes of Prey Envisions Future of Print-Your-Own Footwear,” Sydney Morning Herald, October 5,
2015, accessed May 28, 2019, www.smh.com.au/technology/shoes-of-prey-envisions-future-of-printyourown-footwear-
20151005-gk1b7v.html.
27
Milnes, op. cit.
28
Heather McIlvaine, “How Shoes of Prey Delivers Made-to-Order Shoes in Two Weeks,” Internet Retailing, July 12, 2017, accessed
May 28, 2019, https://internetretailing.com.au/how-shoes-prey-delivers-made-order-shoes-two-weeks/.
29
Milnes, op. cit.
30
McIlvaine, op. cit.
31
Cara Waters, “Online Retailer Shoes of Prey Turns to Bricks and Mortar after Scoring $6.5 Million in Funding,” SmartCompany,
December 3, 2014, accessed September 12, 2019, www.smartcompany.com.au/growth/online-retailer-shoes-of-prey-turns-to-
bricks-and-mortar-after-scoring-6-5-million-in-funding/.
32
All currency amounts are in US$.
33
“Shoes of Prey,” Crunchbase, accessed September 12, 2019, www.crunchbase.com/organization/shoes-of-prey#section-
overview.
34
Sarah Kimmorley, “VIDEO: A Behind-the-Scenes Look at Shoes of Prey’s Factory in China,” Business Insider, February 1, 2016,
accessed May 28, 2019, www.businessinsider.com.au/video-a-behind-the-scenes-look-at-shoes-of-preys-factory-in-china-2016-2.
35
Thomasson, op. cit.
36
Teresa Novellino, “Shoes of Prey Has U.S. Custom Shoe Lovers in Its Crosshairs,” Business Journals, January 6, 2015, accessed
May 28, 2019, www.bizjournals.com/bizjournals/news/2015/01/06/shoes-of-prey-custom-shoes-opening-in-nordstrom.html.
37
Michael Fox, “The Shoes of Prey Journey Ends,” Medium, March 10, 2019, accessed February 6, 2020,
https://medium.com/@mmmichaelfox/the-shoes-of-prey-journey-ends-34634925f1f.

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38
Shannon Kearns, “Shoes of Prey Presents Prescriptive Analytics at Retail Supply Chain Summit,” Riverlogic, February 24,
2017, accessed September 11, 2019, https://blog.riverlogic.com/shoes-of-prey-presents-prescriptive-analytics-retail-supply-
chain-summit.
39
Michael Fox, op. cit.
40
Milnes, op. cit.
41
Sue Mitchell, “Shoes of Prey ecommerce Startup Announces Deal with Upmarket Nordstorm,” Sydney Morning Herald, November
4, 2014, accessed September 11, 2019, www.smh.com.au/business/companies/shoes-of-prey-ecommerce-startup-announces-
deal-with-upmarket-nordstorm-20141104-11gujy.html.
42
Henry, op. cit.
43
Ibid.
44
Ibid.
45
Patrick Stafford, “Online Retailer Shoes of Prey Teams Up with David Jones to Launch In-Store Sales Booths,” SmartCompany,
January 25, 2013, accessed May 29, 2019, www.smartcompany.com.au/finance/economy/online-retailer-shoes-of-prey-teams-up-
with-david-jones-to-launch-in-store-sales-booths/.
46
Ibid.
47
Ibid.
48
Cara Waters, “Shoes of Prey Strikes Deal with Nordstrom to Open Shops in the US,” SmartCompany, November 5, 2014, accessed
May 29, 2019, www.smartcompany.com.au/startupsmart/advice/startupsmart-growth/shoes-of-prey-strikes-deal-with-nordstrom-to-
open-shops-in-the-us-2/.
49
Sue Mitchell, “Shoes of Prey Strikes Deal with Nordstrom,” Financial Review, November 5, 2014, accessed May 29, 2019,
www.afr.com/business/retail/shoes-of-prey-strikes-deal-with-nordstrom-20141105-11gy36.
50
Ibid.
51
Waters, op. cit.
52
Ibid.
53
Sarah Kimmorley, “Jodie Fox Closed Her Concept Stores in a Perfect Example of How ‘Startup Land’ Is Not Always Simple,”
Business Insider, October 27, 2016, accessed May 29, 2019, www.businessinsider.com.au/jodie-fox-closed-her-concept-stores-
heres-why-its-a-perfect-example-of-how-startup-land-is-not-always-simple-2016-10.
54
Ibid.
55
Ibid.
56
Patty Huntington, “Shoes of Prey and Jodie Fox: The Story of a Success Story,” Fellt, July 21, 2014, accessed May 30, 2019,
https://fellt.com/2014/07/shoes-of-prey-and-jodie-fox-the-story-of-a-success-story.
57
Henry, op. cit.
58
Huntington, op. cit.
59
Henry, op. cit.
60
Ibid.
61
Ibid.
62
Susan Lyons, “Shoes of Prey’s Troubles Are a Stark Reminder of the Importance of Desire,” Mumbrella, August 29, 2018, accessed
September 12, 2019, https://mumbrella.com.au/shoes-of-preys-troubles-are-a-stark-reminder-of-the-importance-of-desire-538048.
63
Milnes, op. cit.
64
Ibid.
65
Heather McIlvaine, “Shoes of Prey Steps It Up,” Inside Retail, July 6, 2017, accessed June 1, 2019,
www.insideretail.com.au/news/shoes-of-prey-steps-it-up-201707.
66
Ibid.
67
Ibid.
68
“Q&A with Jodie Fox, Shoes of Prey,” Internet Retailing, February 9, 2017, accessed June 1 2019,
https://internetretailing.com.au/qa-jodie-fox-shoes-prey/.
69
“Shoes of Prey Taps Beauty Editor for Capsule Collection,” WWD, November 21, 2016, accessed June 1, 2019, wwd.com/fashion-
news/fashion-scoops/shoes-of-prey-10709982/.
70
Ibid.
71
Mazza and White, op. cit.
72
Dominic Powell, “Shoes of Prey Puts Business on ‘Pause’ and Halts Orders as It Assesses Potential Business Sale,”
SmartCompany, August 28, 2018, accessed February 6, 2020, www.smartcompany.com.au/startupsmart/news/shoes-of-prey-puts-
business-on-pause-halts-orders-assesses-potential-sale/.

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