Store owners across the board told Footwear News last week they are predicting a highly promotional retail environment — perhaps more so than in any season in memory.
“I haven’t seen anything as promotional as this in a while,” said Melissa Gallagher, VP and DMM of men’s footwear at Barneys New York. “This year is much more challenging than [the industry] is used to.”
Across the high-end women’s market, retailers are preparing for a weak holiday season. Foot traffic and sales have dipped since the September stock market crash, and independent retailers — both large and small — have said the drop doesn’t bode well for splurging on luxe shoe brands.
“Anyone who says they are up is lying,” said Rick Weinstein, director of sales and marketing at New York-based Searle. “It’s impossible to be up … unless you’re offering something no on else has. [I guess] it’s like they say: ‘Flat is the new up.’”
Productwise, Weinstein said flat boots are commanding about 50 percent of overall footwear sales at Searle, while the performance of other styles has been spotty.
In response to flagging sales, some shops, such as Dallas’ Linus, are already playing up promotions.
“We usually do one sale a season,” said Linus owner Kristen Radakovich. “[But] we’re planning to do one next week, and hopefully that will move a lot of product. If [customers] can get a good price on shoes, I hope it will pull them in.”
Other retailers said they are monitoring inventory more carefully than in prior seasons.
“To be overstocked right now is pretty dangerous,” said Beth Whiffen, owner of Il Primo Passo in Santa Monica, Calif. “It’s one of the most dangerous things in general, but [in a bad economy], it’s especially dangerous.”
Whiffen said boots have been performing well, and flip-flops are still selling at full price because of the lingering warm weather.
But overall, the retailer — who opened her shop nearly two years ago — said she is pushing smaller items, including scarves and hats, and trimming her footwear orders. Heading into holiday, she is cautiously optimistic about overall business. “People are holding back at the moment,” Wiffen said, “but once they realize Christmas and Hanukkah are coming, [I expect] they’ll start spending more.”
While most merchants are experiencing weakness across many categories, some store owners are still finding success with strong-performing brands.
“Ugg is the No. 1 growth brand,” said Liz Rodbell, SVP and GMM of women’s footwear at New York-based Lord & Taylor. The store is also ringing up sales of such brands as Michael by Michael Kors, Cole Haan, Steve Madden, Frye and Tahari, according to Rodbell, and casual shoes are outperforming dress shoes.
At Barneys, men’s footwear has been somewhat resilient, Gallagher said, with sales up during the month of October.
“Because of our wide variety [of brands, categories and price points], we have some areas that are actually really resilient, so that’s definitely helping counterbalance where we’ve had tougher-than-expected business,” Gallagher said.
In the athletic world, retailers catering to runners and performance product said they were feeling more confident than their specialty sneakerhead counterparts.
“I am not super-worried about footwear. Our customer is still pretty active and is still going out to run,” said Robb Finegan, owner of Fit Right Northwest in Portland, Ore., who added that business was up in October by more than 10 percent from last year. But Finegan is more concerned about his apparel and accessories business. “I’m afraid that as we get into winter, customers may not need that new jacket or heart-rate monitor. … I think we will see a number drop. We’ve tried to adjust our orders.”
Finegan added that he will run his annual sale the first week of December. “If we need to highlight some particular items that we are heavy in, we might,” he said.
While most stores are hanging out the sale signs, some independent retailers have been more resistant to discounting — at least so far.
“We try not to be overly promotional. We have two sales a year and we’ll try to stick to that,” said Stanley Eisenman, owner of Stanley Eisenman’s Fine Shoes in Fort Worth, Texas. “[But] I’ll actually keep an eye on traffic in the store, and if I think I need to put the sale out earlier, I wouldn’t be averse to doing that.”
Overall, Eisenman said sales have fluctuated this fall. September was up, but sales in October declined, he said.
At Atmos in New York, manager Yos Tohari said he expects to do “just the usual” in terms of promotions this season. Tohari acknowledged that sales figures would most likely be down compared with last year, and both footwear and apparel had been experiencing weakness. Still, Nike footwear and exclusive makeups have been performing well for the store.
Urban retail chain B-Jay’s in New York is also trying to avoid being too promotional, with footwear still performing better than apparel at the store. “Footwear is always selling better than clothing,” said store manager Avi Stern. “Business is slowing down, but you have to stay positive. And [with] the holiday coming, it’s going to be better.”
But even retailers who have been reluctant to hold sales might soon be changing their tunes.
“All the major department stores are already pushing promotions,” said Sam Cohen, owner of Avenue J Men’s Shoes in Brooklyn, N.Y., noting that his sales were down double digits compared to last fall. “If we want to stay afloat, we have to stay attuned to what they are doing. Otherwise we are going to lose business to them.”
Cohen noted that inventory management is essential, too. “We plan on being extra careful about maintaining good inventory on the basics because, due to the slowdown, we have somewhat of an overstock. With the seasonal and the fashion merchandise, we are going to have to become a little aggressive about moving it out.”