The rocky economy, weak consumer spending and late start to back-to-school shopping have made the environment challenging for many store owners, retailers told Footwear News.
“It’s the worst August we’ve ever had,” said Greg Brown, owner of Brown Brothers Shoes in Alameda, Calif., who estimates his Bay Area footwear business is down roughly 20 percent for the year.
Nick Alfano, owner of the 10-store, Michigan-based chain Alfano’s Stride Rite, said the school calendar in his markets shifted from the third and fourth weeks of August to after Labor Day, which has sent his business “up one week, down the next.”
Although Alfano said Stride Rite’s Molly style for girls and Sperry Top-Sider Buoy and Hayden styles for boys are selling well, year-to-date footwear sales are down in the double digits for the chain.
The store used buy-one-get-one promotions early in the season to help bring in traffic, but “you can only do so many BOGO sales without eroding your profits,” he said. “As business really gets tight and figures are not being met, I’m going to have to make a decision.”
Burley, Idaho-based family footwear store Hudson’s offered a 20 percent-off sale to spur back-to-school sales because business has been down for the season. Although, “year-to-date, we might be even,” said owner Mike Searle, who is banking on strength in athletic brands like Nike and Adidas and fashion-athletic brands such as Skechers to provide some overall relief.
Other larger chains said the athletics category has been a bright spot for the sector.
Sports Authority Inc. CEO Doug Morton told FN that Nike Shox have been a top back-to-school performer and said women’s performance footwear, in general, was particularly strong, helped by the recent launch of Under Armour footwear.
“The running business was good, court was good and training was good, which was all driven by the Under Armour launch this spring,” said Morton.
Still, “historically, we’ve seen earlier sales. Generally, [this year’s back-to-school] was a little later than last year,” he added.
DTLR, a 66-store chain with retail locations in Maryland, Virginia, North Carolina, Georgia, Illinois and Washington, D.C., also said its athletic business, specifically with Creative Recreation, New Balance, Adidas, Nike and Jordan, has been faring well, with increases in the low double digits.
DMM Todd Kirssin said he also has noticed a shift in shopping patterns.
“The consumer’s purchases are getting more and more last-minute. You have to hold tight and be ready for them,” said Kirssin.
Tip Top Shoes owner Danny Wasserman said he stocked large quantities of bestsellers such as Skechers and Ed Hardy early on at his New York store because he knew wholesale inventories would be lower this season due to the tough economy.
“I knew this year that chasing goods was going to be much harder than usual,” said Wasserman, whose footwear sales are up in the double digits, led by Converse, which has continued to be a robust seller. “If you don’t have it [in stock] when they first need it, you’ll lose the customer,” he said.
Family footwear chains are also noticing the strong athletic trend. Brown Shoe’s Famous Footwear chain said athletics drove its most recent quarter and it shifted additional inventory dollars in that category for back-to-school. Leading the sales trend are Puma, Nike, Converse, New Balance and the company’s skate brands.
Shoe Carnival echoed similar sentiments, and a survey conducted by Thomas Weisel Partners revealed that 84 percent of its respondents listed Nike as the most popular back-to-school shoe.
Despite the uptick in athletic performance, analysts expect the selling climate to remain under pressure.
“It’s still a very cautious environment when it pertains to retail at this point,” said Susquehanna Financial Group analyst Christopher Svezia. “Inventories in general are down on a per-store basis anywhere from 3 percent to 5 percent. So far, back-to-school has been very slow; traffic in general is slow. Mall-based guys are doing a little bit better on a year-over-year comp perspective, [but] the family footwear channel is definitely tough.”