14 on ’14: Executive Predictions for the Year Ahead

New year, new resolve.

After an uneven 2013, marred by sluggish consumer spending and unseasonable weather patterns, major vendors and retailers from all corners of the industry are looking for fresh opportunity in the coming months.

At the top of their agenda: forging ahead with overseas expansion, fueling product innovation, boosting their online presence and ramping up technology in-store to court a fast-moving consumer.

But challenges remain. Among the main concerns are rising costs in China, as well as government and economic uncertainty.

Here, 14 industry leaders forecast the burning issues and hot trends for the year ahead.

Blake Krueger
Chairman, president & CEO, Wolverine World Wide Inc.
Most pressing issue: “Our issues are similar to what most brand owners are facing today: How do we keep a step ahead in the fast-changing and ever-evolving life of our consumer? This involves much more than just creating great products — we have to tell amazing stories, have our products where and when our consumers want them and we have to constantly listen, learn and react.”
Biggest opportunity: “Lifestyle brands — the brands that market an emotion, a feeling and are able to expand to adjacent categories beyond footwear — will have an inherent advantage. Obviously, everyone is looking for geographic and channel expansion, but brands with diversity in their model — those not tied to one region, channel or trend — are the ones that will have the advantage in the future.”
Overall outlook: “For 2014, there are several positive indicators: U.S. unemployment is down, we are beginning to see growth in Europe again and we continue to see strength in emerging markets.”
Hottest trends: “Boots are a big trend and becoming a critical year-round part of assortments. From a lifestyle and athletic footwear point of view, there is a bit of a 1990s resurgence. We are seeing it in everything from trainers and sandals to boots, and our own Cat Colorado boot is on the runways again. From a technical performance footwear standpoint, things will continue in a minimalist vein, becoming more about working with the natural movement of the body.”

Diane Sullivan

President & CEO, Brown Shoe Co.
Most pressing issue: “One of our most pressing issues is in fact one of our biggest opportunities: consumer expectations around the shopping experience. We continue to see changes in consumer behavior as she becomes more and more reliant on technology when it comes to purchasing. We must evolve with her to match her needs and shopping patterns.”
Biggest opportunity: “I’m excited about the organic potential of all the brands in our portfolio. I expect the strong performance of Famous Footwear, Franco Sarto and Sam Edelman to continue into 2014, along with a number of our other emerging brands that are gaining momentum.”
Overall outlook: “I’m confident in how our business is positioned, and overall I feel very positive about 2014. Of course, the industry will continue to face headwinds with inflationary pricing, and that is something we will continue to work against moving forward.”

Glenn Lyon
Chairman & CEO, Finish Line Inc.
Most pressing issue: “The greatest challenge we see is with our supply chain. Being able to ship on time is critical.”
Biggest opportunity: “Looking forward, we are increasingly confident that our omnichannel strategies are working and that our connectivity to the customer across all channels is strengthening. The performance in our stores and our ability to convert customers into buyers, combined with our product mix, should drive performance in 2014. We are touching on all cylinders. We feel that the pipeline of our brands is strong. Every one of our key brands is bringing us new technologies or new designs, and that gives us a lot of confidence about this year. A lot of this is coming from running, basketball and training.”

Bob Campbell
Founder, chairman & CEO, BBC International
Most pressing issue: “Trying to find ways to improve sourcing out of Asia, because it is becoming difficult to maintain quality and keep the price right.”
Biggest opportunity: “The strongest part of the kids’ market going forward is the branded business internationally.”
Overall outlook: “We’re going to have some new licenses this year [after seeing] good growth in 2013. Our boot business will perform strongly, and we expect to have a great fall ’14, too.”
Hottest trends: “In the children’s market, the real trend we’ll be seeing is the growth of casual.”

MaryAnne Morin

SVP of center core, intimate apparel, ladies’ suits & dresses, Hudson’s Bay Co.
Most pressing issue: “Consistently delivering compelling newness and fashion for our customer.”
Biggest opportunity: “The Internet continues to be our fastest-growing ‘door.’ As well, we are observing great success with shoes on an omnichannel level.”
Overall outlook: “It’s our goal to continue to enhance and expand upon our shoe offering and display, and we have renovations planned for approximately a dozen doors. We also are experiencing significant traffic growth at Hudson’s Bay, with our Queen Street store [in Toronto] at the forefront. We are excited to be opening a new Lord & Taylor store in Albany, N.Y., in time for fall ’14.”

Dick Johnson
EVP & COO, Foot Locker Inc.
Biggest opportunity: “To get better in every area of the business across every geography we operate in. We just made an acquisition [of Runners Point Group] in Germany and have more than 800 stores in western Europe. We want to continue to grow our business there. Our dot-com digital business also is a growth area.”
Overall outlook: “We remain cautiously optimistic. There are always going to be ups and downs, but we have the benefit of multiple geographies, businesses and banners. We have a number of people pulling on the oars to help us be successful.”
Hottest trends: “We’re seeing a tremendous impact from technology and innovation. Adidas Springblade will continue to be popular in 2014, for example.”

Steve Hill
VP of merchandising, Zappos.com
Most pressing issue: “Continuing to find new ways to wow our customers. We’re looking for ways to further differentiate ourselves, whether it’s through product, technology or service.”
Biggest opportunity: “We’re still seeing great growth in our clothing product category and with our 6pm.com business. We’re also very excited about our recent agreement with André Leon Talley as artistic director for our Zappos Couture website.”
Hottest trends: “We’ve seen strength in boots across a variety of silhouettes and expect this to continue through winter. Denim, dresses and outerwear remain strong for us in clothing, with many of our outdoor and active brands driving this business.”

Angel Martinez
Chairman, president & CEO, Deckers Outdoor Corp.
Biggest opportunity: “I’m really looking forward to the evolution of the heritage product at Teva and the rollout of Hoka One One. Those two things are very exciting for us. The recent response to our fall ’14 [collections] is like nothing I’ve seen. With the Ugg Australia product line, we’re going to hit a new level in 2014. I’m very excited about that.”
Overall outlook: “For us — and I mean the footwear industry in general — the economy has turned. Footwear is one of those staples that people can’t do without for very long. When people put off footwear purchasing, you know you’re hurting. It’s a leading-edge indicator. And footwear right now is way healthier than it was. Our industry has a lot of innovation and healthy competition.”

Sabine Brunner
General brand manager, Roger Vivier
Most pressing issue: “Recent regulatory changes in China restrict the way brands can do business there. That will have an impact on the big luxury players and distribution in general.”
Biggest opportunity: “Our brand remains in a growth phase because we are still young and we’re catching more and more customers. We will be opening more stores globally, in addition to more doors through our collaboration with Neiman Marcus in America, among others. We are growing slowly in all markets, so our brand awareness grows worldwide.”

Alexandre Birman

Designer & CEO, Arezzo & Co.
Biggest opportunities: “We have grown 40 percent worldwide in the past year, and 60 percent in America. We want to continue to expand our presence in the U.S. market and then build our [following] in Asia, Russia, the Middle East and Europe. [At home], we will be able to gain unprecedented exposure to the throngs of people who come from all over the globe for the World Cup in Brazil.”
Hottest trend: “Simplicity. Footwear is less about over-the-top statement shoes and more about achieving a simple yet sophisticated look. The consumer is looking for feminine styles with clean, elegant silhouettes and impeccable craftsmanship.”

Greg Tunney
President & CEO, R.G. Barry Corp.
Most pressing issue: “The continuing erosion of the mid-tier department store businesses, not just for us but for all suppliers in that space.”
Biggest opportunity: “We continue to invest heavily in a combination of organic growth in our existing business and growth through mergers and acquisitions. We are shifting resources from slow-growth channels, like mid-tier department stores, to faster-growing areas of the retail world, such as e-commerce, international stores and better independents.”
Overall outlook: “R.G. Barry remains a top performer in its category, returning value to its shareholders. We have a clear vision of where we are going and a roadmap on how to get there.”

Danny Schwartz
CEO, Schwartz & Benjamin
Most pressing issue: “From a macro perspective, the most pressing issue is uncertainty. We need our government to work together to pass laws on our budget, our debt ceiling, our health care and so on. The most pressing issue as it relates to the footwear industry continues to be sourcing. The weakness of the U.S. dollar and the escalating cost of labor and materials have put stress on the price/value relationship.”
Biggest opportunity: “Our online businesses and international expansion plans, particularly in Asia.”
Overall outlook: “Our economy is going to grow at a higher pace in 2014, which means more footwear will get purchased.”

Jim Weber
CEO, Brooks Sports Inc.
Most pressing issue: “The fast-changing pace of consumer behavior. Everyone says it’s so competitive, but the reality is that the consumer is changing their shopping behavior and product preferences, and even the reasons they run. It’s an incredible challenge to stay in front of it.”
Biggest opportunity: “People are running all over the world, and we have some things that are really exciting happening in Europe and Asia. The same brands compete everywhere, so we’re trying to [tout] our ‘Run Happy’ marketing position globally.”

Mark Lardie
CEO, Rack Room Shoes
Most pressing issue:
“Innovation is critical, whether it’s on the product side or in the customer experience. We need our great footwear brands to lead and bring clearly differentiated stories to market. The battle first is to grow footwear sales, then we can battle for market share.”
Biggest opportunity: “As we enter new markets, our ability to project our brand’s image via omnichannel retailing is critical.”
Overall outlook: “The macroeconomic outlook remains quite good for 2014, outside of some weaker consumer confidence numbers. We see our brand partners working hard to innovate on the product side and this, plus increased new retail real estate opportunities, has us optimistic for a strong 2014, especially the second half.”


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