Stores Cut Prices After Tough Holiday

Stores Cut Prices After Tough Holiday
Post-holiday retail discounts.

NEW YORK — It might be a new year, but retailers are turning to tried-and-true methods to bring in consumers this winter.

After flat sales and lower consumer confidence in the month of December, storeowners are hoping to start the year on a brighter note by breaking out spring items early and discounting heavily.

“We’ll go to our ammunition of clearance sales and markdowns to motivate the customers,” said Scott Starbuck, owner of City Soles in Chicago. “Our margins will go down, but hopefully we’ll make up for it in volume and by moving more product.”

Starbuck added that he also is bullish about bringing in more business through the City Soles e-commerce platform, which saw a twofold increase last month over 2011. “Online is growing really fast, so that’ll be our focus in January and February,” he said.

Laurie’s Shoes owner Mark Waldman, who has four stores throughout the St. Louis area, is banking on promotions as well. “Our [focus] is generally not on off-pricing, but we’ll be in a sale period in January,” he said, adding that he’ll also start freshening up his footwear selection earlier than usual.

“We’ll be more aggressive about [bringing] in a lot of spring products,” Waldman said. “That generally has a good effect on our customer base because it causes them to shop earlier.”

Waldman attributed a lot of the downturn this season to a lack of early winter weather. Strong sellers so far for Laurie’s Shoes have been brands such as Donald J Pliner, Keen, Ariat, Merrell and Blondo.

“We poised ourselves for more of a fashion boot season, rather than cold-weather boots,” Waldman said. “From a margin point of view, we had no winter weather to speak of before the Christmas sales break.”

Also seeing little movement in winter boots last month, Gary Weiner, president of Richmond, Va.-based Saxon Shoes, said he is relying less on promotions and more on having the right product mix for the remainder of the winter season. The executive said his strategy is to substitute some cold-weather items with other styles.

Although his buyers bought less weather-related product for fall ’12, Weiner said inventory in that category was still too high.

“I know there’s some cold weather coming, but so far this season, it’s been more of a fashion- and classics-driven boot business,” Weiner said, adding that the trend has been moving toward Western boots. “We want to keep our customers interested and keep them thinking about coming in.”

Not all retailers are anxious about salvaging their fourth-quarter numbers. Mark Jubelirer, co-owner of Reyers Shoes in Sharon, Pa., said he’s confident that business will pick up in the next few weeks, despite being soft in the month of December.

Jubelirer expects changes the company recently put in place, such as renovating sections of the store and rolling out a new marketing campaign on television and online, will help drive traffic during the slow period.

“We may wait later in the season than usual to take markdowns, which is counterintuitive,” the co-owner said. “But we’re upbeat and positive that boot sales will be better in January than in November.”

Lori Harris, owner of Mary Jane’s Shoes in Park City, Utah, is also hoping to sell a few more items full price at her store before turning to promotions.

Although she’s noticed a higher demand for value-priced items, Harris told Footwear News she plans to wait until February before liquidating any leftover inventory because of the Sundance Film Festival, which rolls into town at the end of this month.

“We might rotate some of the older merchandise onto a sale rack, but we’ll wait to see how Sundance plays out first,” Harris said. “The last few years, people have been a lot more conservative with their money and they’re looking for more deals.”

Noting that uncertainty last month about the fiscal cliff weighed heavily on consumer confidence, NPD Group analyst Marshal Cohen predicted that things will pick back up by the spring.

“As we move out of the fiscal issue and the consumer feels more confident, we’ll see that create an improvement in consumer spending,” he said. “Consumers will prioritize their spending, and footwear tends to fall higher on the list when there’s pent-up demand.”

Sterne Agee analyst Sam Poser noted there are some bright spots ahead, especially in the athletic category. Based on post-holiday traffic, the analyst was confident business will bounce back in January and February. “Inventory levels in a general sense are pretty lean,” Poser said. “Anybody who thought things were going to be a lot better this year and has too much inventory is going to have problems.”