How top shoe brands like Steve Madden and Nordstrom are doing right now – Footwear News


Coming out of a year marked by pandemic upheavals and rapid changes in consumption, footwear players probably entered 2021 with the same feeling that was in mind for many consumers: this can only increase from ‘here.

Indeed, decent digital trends across the board, fiscal stimulus, and a promising vaccine rollout have all served to boost brands and retailers in the industry. At the same time, the sport, athleisure and comfort categories remain strong, with some brands, Steve Madden being one example, indicating that they are seeing signs of a rebound in the dress and fashion categories.

Yet a supply chain crisis in the country’s busiest ports threatens to hamper the progress of many retail businesses. In fact, Steve Madden CEO Ed Rosenfeld told investors that just as consumers are interested in dressy and fashionable shoes for Easter, a delay at West Coast ports could prevent these products from being released. reach buyers.

Here’s a look at the big trends impacting footwear right now.

A situation in the ports

Caleres Inc., Wolverine World Wide Inc., Nordstrom, and The Gap Inc. are among other names in bold who have lamented the bottleneck situation that occurs primarily in the ports of Los Angeles and Long Beach in California – which make up almost half of the total United States import from Asia. The difficult supply chain situation is the culmination of increased shipment volumes due to increased consumer demand as well as a shortage of workers.

Companies have so far put the costs of delayed shipments in the millions, Caleres CEO Diane Sullivan told analysts on a call to discuss the company’s fourth quarter results this month. that the company is currently facing between $ 60 million and $ 70 million in backlogged inventory. Received. Sullivan, who is also chairman of the board, said about $ 50 million of that inventory belonged to Famous Footwear and about $ 10 to 20 million was for the brand portfolio, which includes Sam Edelman, Vionic and Allen Edmonds.

The backlog in ports is particularly frustrating for companies like Caleres and Steve Madden – the latter valued its impact in the first quarter of the port saga at $ 30 million – which market watchers had called rather well positioned before. COVID-19. Even during the crisis, these companies were able to preserve much of their liquidity and remain relatively nimble. Now, as more stimulus measures hit the bank accounts of millions of Americans and the COVID-19 vaccine rollout shows promising signs, brands and retailers are poised to slow the risk of rebound. At the same time, as had been the case with previous port delays, low-cost retailers like Ross, TJ Maxx, Burlington and Marshalls might be able to profit from opportunistic purchases stemming from off-season cargo and oversupply. big brand stocks.

Brick and Mortar – In One Click

It’s no secret that the digital component of retail has received a huge boost due to the coronavirus: in fact, Jane Hali & Associates analyst Jessica Ramirez told FN on the month last speaking to the third quarter results of Michael Kors and Jimmy Choo, Capri Holdings, that “if you’re not doing well in e-commerce right now, then something is really wrong. According to a report released this month by Adobe, from March 2020 to February 2021, COVID-19 gave e-commerce an additional boost of $ 183 billion, which is almost the size of the last shopping season. holidays, where $ 188.2 billion was spent online between November and December 2020. In total, during the 12-month period from March to February 2021, $ 844 billion was spent online. (For reference, in calendar year 2020, $ 813 billion was spent online, representing a 42% growth from 2019.)

But that doesn’t mean that brands and retailers are ready to ditch stores – instead, many companies are realizing the value of a strategy that effectively marries all channels (i.e. omnichannel), in some cases making stores bigger than ever. (According to a recent study by Coresight Research, U.S. retailers announced a total of 3,344 store openings for 2021, about 39.5% more openings than reported at the same time in 2020.)

For example, retailers like Nordstrom and DSW are doubling their investments in omnichannel services such as in-store online pickup purchase and in-store shipping purchase online. Others, Dick’s Sporting Goods and low-cost seller Burlington are becoming increasingly aggressive about store expansion. In an announcement accompanying its financial results for the fourth quarter of this month, Burlington revealed that it would increase its number of physical stores to 2,000, from the previous target of increasing to 1,000 locations, which had been set. as part of the chain’s initial public offering in 2013. Additionally, at the end of the fourth quarter, the retailer operated 761 units in 45 states and Puerto Rico.

In February, Dick’s Sporting Goods announced plans to open five new outposts in the month alone. Following these openings, Dick’s now has 728 branches in 47 states.

The product paradox

Retail earnings reports have vastly bolstered the strength of categories such as comfort and athletics, which were booming before the global health crisis, but further strengthened as confined performance athletes and novices alike have shifted to strength. increasingly turned to outdoor activities such as running and hiking.

Hoka One One, for example, proved to be a big driver for Deckers Brands in the third quarter, with sales up 52.1% to $ 141.6 million. And Under Armor, which has struggled to find its place in the North American market in recent years as it delved more deeply into performance categories, saw gains thanks to the rise in outdoor activities.

“Everything indicates that we’re going to be focusing a lot more on a healthy lifestyle, and that means you need performance products rather than sports products,” Matt Powell, senior industry advisor, told FN. sport at The NPD Group Inc. success. “A year ago I was criticizing Under Armor because we were in a major athleisure cycle and they stuck with performance. It seems that after the pandemic, the market will come back to them. “

Meanwhile, categories like dress and fashion shoes – which consumers deprioritized last year amid blockages and working from home – are also starting to see some resurgence.

Steve Madden CEO Ed Rosenfeld told analysts last month that the company is “doing very well” in the sandals category and that customers are responding to dress styles and “anything that wears big jewelry.” [and] oversized embellishment [as well as] woven.

Roger Rawlins, CEO of parent company Designer Brands of DSW, also told analysts this month that the company plans to focus on three key brands within its Camuto portfolio, all focused on fashion and clothing. clothing: Vince Camuto, Lucky and Jessica Simpson.

The company’s line with Jennifer Lopez – which debuted last February – is also set to relaunch, with the main focus being the fashion footwear space.

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