In addition to building its store base and working more closely with key vendors, the retailer recently unveiled a solar panel system to power its Kannapolis, N.C., distribution center. The nation’s largest independent footwear retailer is now making a bigger move to operate on green energy. “As we looked into [solar panels], we saw all the tax credits that would be available to us and that there was already a demand for clean power,” CEO Robert Tucker told Footwear News.
Costing roughly $23 million to build, the panels are powerful enough to generate energy for as many as 600 homes. And calculating the 30 percent federal tax credits and 35 percent state credits, Shoe Show CFO Jack van der Poel said the project, which was funded through the company’s surplus funds, is well worth the investment. “With the credits and bonus depreciation, the whole thing will pay for itself in about five or six years,” he said.
Solar initiatives won’t stop there, though, as the company also has a goal to harness solar power for up to five new stores opening this year. Shoe Show now operates more than 1,000 locations nationwide between its Shoe Show and Shoe Dept. divisions, and it expects to bow 25 to 35 new doors this year.
Tucker said that even while the company is in expansion mode, it continues to keep a close eye on costs. “Companies don’t go broke because of a lack of sales; they go broke because of a lack of controlling expenses,” Tucker said of one of the company’s mantras.
The company’s green mission also meshes well with this focus. “We bring the cardboard from our stores back [to the distribution center] and recycle boxes and repack them, and we also have our own shipment trucks,” Tucker said. “All of that together reduces costs by a couple million dollars a year.”
Tucker, who turns 75 in August, said his value-oriented retail chain, which carries brands such as New Balance, Columbia and Timberland, has also stayed competitive by being nimble with its store base. “We closed a lot of stores when the market wasn’t good,” he said. “If a store isn’t producing, we shut it down, cut our losses, take the inventory and go someplace else to set up camp where we can do better.”
Operational efficiencies and a willingness to adapt to consumer needs are among the retailer’s greatest assets, according to New Balance key account sales manager Chris Kallao, who’s worked with Shoe Show for more than 15 years. New Balance collaborated with the retail chain to overhaul the stores’ product assortments and create lower-priced items to better fit the customer base.
“[Shoe Show’s] consumers are unique compared with our other partners in shoe chains,” Kallao said. “From our standpoint, its consumer is a little more price sensitive and wants to wear some of the major brands, but at a value proposition.”
Going forward, Shoe Show is looking to rev up the e-commerce side of the business. Although its website is not a major contributor to the bottom line at the moment, CFO van der Poel noted it’s due for an update. The company also is working on social-media initiatives on Twitter and Facebook.
In keeping with the company’s philosophy, Tucker said Shoe Show will take a more calculated approach to boosting online sales. “The Internet business will grow, but you can spend a lot of money on it and not have good returns if you go at it too fast,” he said.