3 Reasons Shoe Companies Are Banking on Retro More Than Ever

While retro styles have reigned supreme in the sneaker market for the better part of two years, there is more evidence that the trend won’t die down anytime soon.

With back-to-school serving up a major blow to retailers who didn’t bank on retro styles, proof is mounting that retro is offering a major boost to the balance sheet for many shoe companies.

Here are three reasons why.

Head-to-Toe Complement

Although retro sneaker styles are a great complement to a variety of clothing options, the fact that the trend has an apparel counterpart bodes well for shoe companies with retro product in their arsenals.

Cowen and Co. analyst Oliver Chen wrote earlier this month that a retro influence was among the top fashion themes in women’s apparel for fall — further proof that the trend will persist in footwear.

“Brands are becoming influenced by the ‘80s [and] ‘90s time periods, with these eras showing up in apparel through: the return of the track suit, matching track bottoms and jackets, streetwear influence in active brands with consumers wearing head-to-toe athletic wear,” Chen wrote on Sept. 7.

Also, retro is equally popular among genders as well as in a variety of retail channels.

“Retro styles in casual running, basketball, as well as apparel are evident across not only sporting goods but also throughout the department store channel,” Chen added.

Bye-Bye Canvas

Last week, Citi Research analyst Corinna Van der Ghinst hosted a meeting with Jason Rogowsky, CEO of New York-based Shoe Parlor, to discuss year-to-date selling trends. In a Sept. 14 recap note, Van der Ghinst wrote that Rogowsky believes that the retro trend is cannibalizing sales of traditional canvas and performance running sneakers.

Case in point: Some family-footwear firms — Genesco’s Journeys and Schuh being two examples — suffered a tough back-to-school kickoff because they relied on once tried-and-true staples, such as canvas styles, and failed to stock key retro athletic product.

“Within athletic, the consumer has shifted away from higher-priced technical product ($120-plus) toward lower-[average unit retail] retro/casual athletic styles ($50 -$100) over the past 18 months,” Van der Ghinst writes. “These casual styles remain the biggest drivers in footwear going into fall — led by Adidas retros as well as increasing momentum from New Balance, Puma and niche brands.”

Old Is New Again

Several brands that had seen their appeal die down over the years are reaching back into their vaults to pull out nostalgia-inducing product for the millennial and older crowd and fresh excitement for Gen Z. And it’s been a win on the consumer and brand side.

Fila, for example, is in the midst of a resurgence that is driven almost entirely by its focus on heritage product.

Since shifting its emphasis to its heritage business in 2013, Fila has seen substantial revenue growth — more than 100 percent year-over-year, according to Jon Epstein, president at Fila North America.

“My gut is that retro can last a little longer because there is so much great product in the pipeline and the vaults of the brands,” Matt Powell, sports industry analyst at The NPD Group Inc., told FN last month in reference to Fila’s retro-driven comeback.

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