The “ugg” boot, also known as an “ug” or “ugh” boot in Australia and New Zealand, is a generic name for a flat-heeled sheepskin boot that features wool on the inside and skin on the outside—creating footwear that is extremely warm, resilient, and comfortable. Ugg boots supposedly date back to the 1920s and were originally worn only in rural areas. These boots gained popularity with Australian surfers and swimmers because they were warm and repelled water. Still, ugg boots were not commonly worn as everyday outdoor wear in Australia.

Then the rest of the world discovered ugg boots and everything changed. An Australian surfer named Brian Smith brought a bag of the boots to the United States in 1978. He found a home in California and introduced them to surfers. That was just the beginning.

The boots remained relatively obscure until 1995, when Smith sold “UGG Australia” to an American company, Deckers Outdoor Corporation, who also owns the Teva brand. In 1998, Deckers re-positioned the UGG brand as a high-end luxury footwear brand. It was distributed via premium retail channels such as Nordstrom and tended to be available only in limited quantities. Deckers also began to invest in fashion advertising and marketing at that time. One of its early strategies was to seed UGG boots with celebrities.

It worked better than anyone could have imagined. The real launch of the brand in the US could well have been the subject of a television show titled “Oprah Loves UGG.” When Deckers sent a pair of its UGG Ultra boots to Oprah Winfrey in 2000, she purchased 350 pairs for her entire staff. She featured the Ultra boot on her “Oprah’s Favorite Things” show that year, and went on to promote other UGG boots in 2003 and 2005.

The Oprah buzz was just part of the UGG brand’s rise to fashion fame. In 2003, Footwear News named UGG “Brand of the Year.” Other celebrities glommed onto the boot as a funky fashion statement. Pamela Anderson wore them during the filming of the Australian pilot of “Baywatch.” Kate Hudson wore them in a promotion for her 2004 movie, “Raising Helen.” The character Samantha wore them on the television show “Sex and the City,” and Jessica Simpson sported pink ones in an episode of “Newlyweds.”

Suddenly, UGGs were a raging success. They became a fashion sensation, particularly with college co-eds. Apparently, UGG boots continue to have a strong campus following today.

Oddly, UGGs don’t seem particularly stylish—they have a somewhat clunky, bohemian appearance. Until recently, they were available in only a handful of colors and styles. But their celebrity status, combined with chronically limited supply, continues to fuel the popularity of UGGs.

Brand domination breeds contempt. The worldwide success of UGG Australia led to an international controversy over the name. Deckers, which was granted a US trademark for the UGG name, attempted to protect it in Australia, perhaps in a heavy-handed manner. That’s when things got UGGly. Australian boot manufacturers were undoubtedly chagrined over soaring sales of the US-owned and now China-made “UGG Australia” boots. They lobbied to deny Australian trademark rights to Deckers on the grounds that “ugg” was a long-standing generic term that appeared in Australian dictionaries. (See “Save Our Aussie Icon!” for further details.) As of January 2006, the Australian manufacturers prevailed, but the controversy is far from over.

Of course, UGG competitors were stampeding to capitalize on UGG’s popularity and wanted the right to call their boots by some derivation of the name “ugg.” While they couldn’t legally do that in the United States, it appeared that other countries might acquiesce. But with the continuing legal battle, most competitors now refer to their products as “sheepskin boots.” Competitor Koolaburra claims “we’re the ones actually made in Australia. Always have been. Always will be.” Warmbat, another Australian competitor, says “our brand is one of the oldest in the sheepskin boot industry.”

But brand leaders with dominant market share tend to stay that way, and UGG Australia remains the brand to beat in the category.

Even so, a December 9, 2005 article in the Wall Street Journal (“Uggs Again? What Last Year’s ‘It’ Gift Does for an Encore,” by Stephanie Kang) wondered if the ubiquitous boot would have any legs left in 2006. According to the Journal, Deckers has moved from its original target of 25- to 45-year old women to an audience that now includes men and teenage girls. Teens like wearing UGGs with miniskirts or jeans tucked into or rolled over the boots, says Deckers. At least one analyst quoted in the article believed UGG was successfully transitioning from a fad to a brand.

The UGG product line was largely responsible for a 77 percent jump in Deckers’ sales in 2004 to about $215 million, says the Journal. Sales of UGGs went from about $40 million in 2003 to over $116 million in 2004.

To maintain momentum, the company periodically rolls out new boot colors, adds new accoutrements, such as embroidery, studs and cargo pockets, and extends the line into new areas. The new women’s “wahine” boot, for example, has a suede exterior and is embroidered with colorful spring flowers.

UGG Australia now has women’s, men’s, and children’s lines that include boots, slippers, and casuals. It has added jackets, coats, and handbags to its repertoire. The Fall 2007 lineup offers about 125 styles, the company says.

Sales of UGGs are chugging along. Deckers reports that, for the year ended December 31, 2006, the UGG brand’s wholesale sales increased 21.4 percent compared to the same period in 2005. So despite the controversy, or perhaps because of it, UGG boots just seem to keep on walking… right into this year’s holiday season.

Barry Silverstein has been a frequent brandchannel contributor since 2007. He has thirty years of advertising and marketing experience and is currently a freelance writer and marketing consultant. He founded and ran his own direct marketing agency and held executive positions with Epsilon, a leading database marketing firm and Arnold, a major ad agency. Silverstein is the author of three marketing books, including the McGraw-Hill book, The Breakaway Brand, which he co-authored with Arnold CEO Fran Kelly.