Retailers, Vendors Take On Top Issues

Trends, sourcing and the economy dominated conversation at the Sterne Agee breakfast series, held at FN Platform on Tuesday.

With fall business just getting under way, retailers said boots, boat shoes and lightweight running styles remain popular with consumers. However, the way those consumers shop is changing.

“Customers are buying much closer to need,” said Cliff Sifford, EVP and GMM at Shoe Carnival Inc. “[As a result], we are testing more than we did two years ago. Instead of rolling out new product to all stores, we’ll test it first [in a few key locations] to make sure it’s right.”

Rick Paterno, group president of footwear at The Jones Group Inc., said his company reacted to changes in the market by diversifying its portfolio. The company acquired Stuart Weitzman in 2010, and most recently purchased U.K.-based luxury shoe retailer Kurt Geiger. “We are not seeing tremendous growth in the industry, so you have to find ways to grow,” he said. “The single biggest challenge is sourcing to meet cost pressures.”

Indeed, Pat Devaney, SVP of Stella International Holdings Ltd., has faced sourcing problems. Stella International, which manufactures 35 footwear brands, operates a main base in southern China.
“Cost increases were held back because of our recession, but the minute [things stabilized], they whacked us with taxes and [increased] labor costs,” he said, adding that the company has lost some of the flexibility it had enjoyed as far as being able to accommodate last-minute orders.

Rick Ausick, president of Famous Footwear, a division of Brown Shoe Co., agreed. “We’ve lived with deflationary pricing for a long time, going from Italy to Brazil to China to keep prices down to where consumers will pay,” he said. “But we don’t have that next place. So this is new.”

The economy, however, has become a more palatable issue.

“We’re all more dedicated to making sure inventory [levels] are appropriate,” said Ausick. “You just can’t have as much.”

Retailers said having trend-right product remains important in battling the challenges. And gauging where the market is moving is equally vital.

“If you start to see the same silhouette on the street, it’s time to move on,” said Robert Goldberg, owner of Harry’s Shoes in New York. “You have to see what’s beyond the horizon.”

The panel was moderated by Sterne Agee analyst Sam Poser.

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