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Retailers and Brands Are Upbeat About the Fall Back-to-School Season — But Uncertainty Still Looms

If 2020 was about the “new normal,” shoe companies are hoping fall ’21 is just plain “normal.”

Last year, the footwear market experienced a soft back-to-school selling season, due to the unusual nature of learning in the pandemic. With COVID-19 cases dangerously high, many schools delayed their reopenings and implemented remote classes for all or some students. That led parents to devote their hard-earned cash to computers and office furniture, in lieu of new clothes and shoes.

However, as COVID-19 vaccines continue to be distributed to more Americans, and virus numbers slowly decline, the prospect of schoolchildren returning to the classroom on a regular basis this fall is becoming increasingly real.

That’s providing footwear executives with an upbeat outlook for the all-important BTS season. “We are optimistic that schools will be open in a larger capacity [compared] to last year,” said Seth Campbell, president of BBC International LLC.

Molly Hartney, chief marketing officer at Rack Room Shoes, added, “We can’t really predict what back-to-school time will look like, but I do have high hopes, given all the vaccines that are out there.”

And on a call with analysts last week, Designer Brands Inc. CEO Roger Rawlins was similarly optimistic, after the firm’s DSW chain reported significant gains for its kids’ business in Q4.

A Question of Inventory

When it comes to buying for the season, though, Beth Goldstein, executive director and industry analyst at The NPD Group Inc, recommended that retailers take a conservative approach — as there is still continued concern among health officials about the impact of new and more infectious variants of the coronavirus.

“It’s about being a little bit more thoughtful,” she said. “Maybe you have a deeper assortment and availability on some of the big key items, as opposed to having such large assortments. You hate to be in the situation where you don’t have enough inventory, but I think retailers are erring on that side rather than having too much.”

She noted that athletic sneakers have been the hottest category in the children’s market for the past few seasons and will likely dominate again this season.

Brandon Gingerich, director of sales at Badorf Shoe Co., which distributes kids’ brands Tsukihoshi and Footmates, agreed: “Athletic demand is likely to continue to lead.” However, he predicted other categories could rebound this year. “We see parochial and casual styles bouncing back through the summer and into Q3, as consumers look for ways to break out from the ‘closed pandemic’ mentality of the last year,” said Gingerich.

Sales for dress styles will likely continue to lag into Q4, according to Gingerich, or until families feel safe enough to plan celebrations and holiday gatherings again.

Catering to Customers

For Rack Room, the retailer is prioritizing newness in its BTS product selections, to give parents and kids an exciting reason to shop. It also plans to stock a variety of footwear options to serve families in whatever situation they find themselves.

“Back-to-school is always dominated by athletic footwear, but we’ll try to have an assortment to address some element of virtual learning,” said Hartney. “We want to have anything from athletics to Crocs and Birkenstocks, because some people could be doing virtual learning and some people will be in school.”

She acknowledged, though, that while classrooms might be returning to normal, consumer behavior has permanently changed during the pandemic. “The customer mindset is shifting to online,” said Hartney, noting that Rack Room offers a range of digital services, including buy online, pickup in-store and ship-from-store fulfillment. “We’ve really seen an increase in customers using those services, as I’m sure most retailers have.”

And as social media continues to grow in importance — particularly amid the pandemic — Hartney said the family footwear chain is reassessing its social approach, with the goal to launch a new messaging strategy in time for BTS.

Threat Assessment

While kids’ companies remain hopeful of a profitable fall season, a few looming factors could impact the scale of their sales gains.

Aside from the ongoing global health crisis, footwear companies are now grappling with severe congestion at the ports of Los Angeles and Long Beach in California, which is causing weeks-long delays in product deliveries.

On a conference call with analysts this month, Mimi Eckel Vaughn, chairman, president and CEO of Journeys parent company Genesco Inc., estimated that the supply chain is running four to six weeks behind schedule. “It’s a bit of a domino effect [that could last] until sometime this summer and is affecting really all of our businesses,” she said.

However, Vaughn expressed optimism that the issue will be resolved by mid-year. “When we get to the high-volume part of the year with back-to-school and with holiday, the supply chain ought to be in much better shape,” she said.

The other unknown that could impact BTS is Amazon’s Prime Day promotional event. It traditionally is held in July but in 2020 moved to October — and by some estimates generated over $10 billion in sales last year.

NPD’s Goldstein explained, “For the last few years, we have seen Prime Day as the kickoff to back to school, but this year it was the lead-in to holiday. By the time it happened, footwear was barely on the radar. If it goes back to being in that July period, we will definitely see that benefit footwear products.”

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