Retailers Applaud Product Innovation

Las Vegas — Industry executives praised the toning and boot categories as key growth areas in footwear in a discussion on the second morning of FN Platform, held here Aug. 17-19.

“Toning woke everyone up,” said Shoe Carnival Inc. EVP and GMM Cliff Sifford, who spoke on the Sterne Agee-sponsored panel moderated by company analyst Sam Poser.

Other speakers included Debbie Ferrée, vice chairman of DSW Inc.; Scott Prentice, VP of sales at Jimlar Corp.; Tom Romeo, president and CEO of Bearpaw; Sonny Shar, CEO of Pentland USA; and Diane Sullivan, president of Brown Shoe Co.

“I call this the toning revolution,” added Ferrée. “It’s a lifestyle, and it’s impacting other brands, [making them] sharper.”

Sullivan said the whole wellness category has exploded, with the success of barefoot product demonstrating a consumer interest in fitness and innovation.

The panelists also said boots would continue to lead the market going into the next season.

“Early reads [on boots] have been extremely positive,” said Sullivan. “The shift we’ve seen is almost as though the consumer goes directly from sandals to boots. That closed-up category is more [difficult].”

Ferrée noted that boot sales at DSW have even become a 12-month business in many locations.

“Last year, I was most concerned [about]: Is there enough newness to drive an increase again this year?” she said. “And can we comp on top of significant increases last year? Yes. It’s a fashion shoe and customers will [buy it again].”

The category is strong across segments, according to Sifford.

“I’m pleased with [men’s boots],” he said. “It’s not what we see in women’s, but we are seeing increases. I feel it will be strong again this year.”

Retail panelists credited wholesalers with designing footwear that created buzz within the market.

“The customer needs a reason to part with her money,” said Ferrée. “We are seeing a lot of newness and creativity. Out of boredom and doom-and-gloom comes excitement. The customer is not looking for the cheapest product, but value, which means quality, newness and freshness.”

Prentice noted that vendors had felt the pressure to manufacture innovative product. The reason: “Fear, doubt and uncertainty had all collided and people stopped spending,” he said. “But price resistance is less of an issue now.”

Still, challenges for the industry remain.

Panelists said looming price increases in the 5 percent-to-7 percent range and issues with deliveries from China could impact sales. Additionally, some speakers worried about other costs that could not be controlled, such as airline rates and fees associated with getting product cleared through U.S. Customs.

But panelists warned against using lower-quality materials for shoes, acknowledging it would damage sales over the long term.

“Have we raised our prices?” asked Romeo. “No. We’ve just become more lean and mean. We try not to touch [the product]. As we touch more, it costs more money. With China, you have to partner up with factories and teach them what customers expect. It’s time-consuming, but once they learn it, there are fewer mistakes. [With the increases], we absorb it and figure out other ways to cut costs. I thought about cheapening the shoes, but that [would take] away from the value of our product.”

For coverage of the sourcing seminar at FN Platform, go to Footwearnews.com.

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