CEOs Sound Off on Burning Issues

An uncertain economic climate, more-demanding consumers and an ever-evolving e-commerce sector are keeping footwear industry insiders up at night. Sourcing and pricing pressures remain major concerns and are powering business forward.

Here, industry executives open up about what is top of mind and the steps they’re taking to stay successful.

Kevin Bailey, president; VF Action Sports, Vans

“We’re seeing shifts in consumer traffic trends. Whether brick-and-mortar or online, consumer behavior is changing both on a day-to-day basis and as related to shopping occasions like back-to-school and holiday. Understanding these shifts and, more importantly, the ‘why’ is critical. Staying current to the speed of change is even harder. We’re utilizing deep consumer research to better understand consumers’ ‘whys’ of shopping, their desires and needs, as well as their opinions about the ‘how’ of shopping, online and in-store.”

Joe Ouaknine, CEO; Titan Industries

“To stay competitive, we need to make more collections than before and cannot stay with a particular style too long since it can be knocked off so rapidly. We’re also dealing with the ongoing rising costs in manufacturing in China. These issues are on our daily agenda, and we find a way to remain players in this industry.”

Daniel Schwartz, CEO; Schwartz & Benjamin

“Sourcing continues to occupy a lot of our attention. We’re in the fashion business, so we have to create exciting, innovative product. But that’s not enough today — we have to provide value and have great sourcing. We need to be in the best factories for every type of footwear product we put into our collections. We hired a new head of sourcing, and we’re also in the process of restructuring our product development organization.”

Greg Tunney, president, CEO, RG Barry Brands; chairman, FDRA
“The biggest issue we see is the continuing evolution of global sourcing. About 80 percent of production today comes out of China, but that’s changing as suppliers chase lower costs. Duties on footwear is another critical issue. The pending permanent free-trade agreement through the Trans-Pacific Partnership needs to be completed for consumers. With Vietnam being the No. 2 supplier to the U.S. market and growing, the TPP will allow pricing relief and become one of the most commercially significant free-trade agreements ever when it’s finally enacted.”

Liz Rodbell, president; Lord & Taylor, Hudson’s Bay Co.

“The boot business has come on extremely strong. We believe it is a great opportunity for us to continue to grow. [Also] we’re renovating our flagship and continuing store renovations at other locations. Our success online in footwear is dramatic.”

Mandy Cabot, founder, CEO; Dansko
“So far in 2014, the industry has been experiencing the brunt of waning consumer confidence and tightening of the purse strings. Dansko isn’t taking a wait-and-see approach. It’s about being a good business partner to our retailers. Headed into fall, we are increasing efforts to drive traffic to our retail partners, including launching new product in the fourth quarter to keep the shelves fresh, giving consumers even more reasons to love the brand and frequent our retailers.”

Thomas Florsheim Jr., chairman, CEO; Weyco Group

“The cost of our product and overhead expenses continue to rise, but the middle-market consumer has less disposable income. It becomes incumbent on brands like us to offer more in our product to justify a higher price point. We’re spending much more time in design and development, making sure we build product to hit specific price targets, and at the same time create shoes with more features and benefits. We’re ramping up our digital and social media efforts, and have new marketing programs in place.”

Tarek Hassan, co-owner; The Tannery

“My challenge is customer loyalty and how can we maintain it. The solution is clearly defining what our unique selling propositions are and making sure that our shop floor is aligned. We also work hard to have must-have product in-store and online, and maximize sell-through before the major players out there come through and jump on it. Social media plays a big part in achieving that. It’s not enough to sit back and wait for customers to walk into the store — we need to be able to reach out to those guys in a major way.”

Danny Wasserman, president; Tip Top Shoes

“The lack of traffic in stores is our biggest threat. With people shopping on the Internet, a good segment of our business is being taken. We’re investing a great deal of time and money to become part of that shopping mall. We’re rebuilding our website from scratch and are taking it as seriously as opening a new brick-and-mortar store.”

David Miller, CEO; Minnetonka Moccasin

“We were slow to adapt to social media, but now that we’re there, we’re moving quickly. But one of the things that keeps me up at night is [that being active on social media] is a double-edged sword. The Internet gives people a platform to voice their opinions, so someone who is not happy can make a lot of noise. We’ve tried to be really responsive when that happens.”

Josue Solano, EVP, COO; BBC International
“The consumer keeps me up at night. We spend a lot of time thinking about what they’re looking for and helping our retail partners meet their needs. The consumer is changing in terms of their shopping patterns. What’s driving that is technology. They’re becoming much more demanding, and they have a lot of choices about where they can go to shop, whether it’s online or in brick-and-mortar stores. And as they become more demanding, it adds up to a complex set of problems for us as provider.”

Michele Levy, U.S. CEO; Melissa
“The world right now is very unstable. Syria, Ukraine, Russia, Israel, Europe. Ebola. There are so many social, political and economic challenges and crises in the global arena. That is counterbalanced by a generally strong U.S. economy in some sectors and weakness in others. We see a lot of pressure on the large-box businesses and a contraction in the small shops in the U.S. This uncertainty creates an opportunity to continue to focus on captivating … our customers.”

Stacey Bendet, CEO, creative director; Alice + Olivia by Stacey Bendet
“For the remainder of 2014, we are focused on our continued retail expansion, both domestically and internationally. With six new stores opening this fall, I want to make sure each one is treated specially and in an exciting way, whether it be in Atlanta, Georgetown [in Washington, D.C.], or even Shanghai.”

David Ben-Zikry, CEO; Spring Footwear Corp.

“Staying on top of the evolving market, especially with new technology, is a high priority for us, as well as connecting with our end consumers. Our focus is to create simplicity and organization in our presentation and our connection. We’ve improved our merchandising and organized our product line. A new showroom in our headquarters has a modern look, and we’re now trying to incorporate that into the retail level.”


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