After years of challenging market conditions, the footwear industry is poised to return to a more normalized cycle this year, many experts predict. While inflation and high interest rates still linger, most companies have transitioned from a defensive way of conducting business to more offensive measures in 2024.
This means that many shoe leaders are looking to drive innovation through new product launches, store concepts and technology in order to move their business forward in the new year. Companies like On, Caleres and Wolverine gave a glimpse of what the future holds for them this week during ICR, and change seem to be on the horizon.
Here are three key takeaways that were discussed during the 2024 ICR Conference in Orlando, Fla.
The Boot Problem
As climate change continues to affect weather patterns. Case in point: as of Jan. 9, 2024, New York City’s Central Park has gone 695 days without an inch or more of measurable snow in a 24-hour period, according to the National Weather Service. This means that consumers are not thinking about boots, and it’s starting to show.
Sure, TikTokers and younger consumers are jumping to trendy items like Uggs, but core boot sales are trending lower than anticipated. Genesco’s hard-hit Journeys business has seen this firsthand. The company’s board chair, president and CEO, Mimi E. Vaughn, noted during a fireside chat on Monday that following a positive start to the holiday season, sales decelerated in the weeks approaching Christmas.
“Boots make up about 50 percent of our business this time of year, and our overall boot sales were down 20 percent in the [holiday] period. So that’s really the thing that affected the Journeys business the most,” the CEO said.
Caleres also found that boots were not top-of-mind this season. While only briefly mentioned, CEO Jay Schmidt noted in his fireside chat that the company’s “speed program” allowed the company to pivot during holiday to styles that were more in demand.
“This program allowed us to move through the fourth quarter and to avoid some of the headwinds that were out there,” Schmidt said. “We were able to pivot into fashion sneakers, ballet flats and all of the key items that the consumer was looking for.”
So, the question remains, how should brands and retailers address shifting weather patterns and how it affects the production of seasonal items?
Consumers Want Fresh Product
It’s been a few seasons since the industry developed the latest “it” shoe, and consumers are starting to notice. Most shoe companies at ICR acknowledged the fact that their customers are seeking new silhouettes and as a result have touted their latest products.
Crocs touted its new sandal franchise, Wolverine unveiled new product from Merrell and Saucony and On announced a complete overhaul of its apparel line as well as several shoe launches ahead of the Summer Olympics.
But, with all these new drops, being able to stay on top of trends and moving on them quickly, is also key. During Tuesday’s fireside chat, Caleres’ Jay Schmidt noted that addressing consumer needs quickly are helping the company drive sales.
“Consumers are continuing to prioritize newness,” the CEO noted. “So obviously speed is really important as a differentiator in our business. We launched this “speed program” in 2017, so we’ve really been developing this capability over time. We’re trying to deliver product early, get that early read and then come back into our key styles and key SKUs within a 90-day period. This has been an accelerant to our business.”
Schmidt credited his factory partners for allowing Caleres to operate this speed model, which accounted for 28 percent of the company’s production in the third quarter, up from just 12 percent a year ago.
The Evolving Role of Stores
For some companies, brick-and-mortar stores saw some tough times in 2023. At Genesco, for example, the company announced in May of last year that it was closing 100 of its Journeys stores in an effort to cut down costs.
While Caleres isn’t making any drastic changes to its Famous Footwear business, the company did disclose that its owned brand portfolio is set to overtake Famous as its main sales driver. Nonetheless, Caleres is remaining committed to servicing Famous Footwear’s core Millennial family consumer moving into the new year with the continued role out of its refreshed “Flair” store concept.
But over at Boot Barn, CEO Jim Conroy is bullish on stores. The executive noted that the company plans to end fiscal 2024 with approximately 397 stores, with the potential to add an additional 500 locations in the coming years. Conroy noted that by fiscal 2030, Boot Barn plans to have 900 stores that are expected to contribute approximately $1.5 billion in sales.
On also touched on its store strategy. Co-CEO Marc Maurer noted that the company’s new London store is one its largest stores to-date and is looking to open new locations in Paris and Austin this year.
These actions seem to illustrate the complex role that physical stores play within a brand portfolio, and 2024 is poised to further reveal what the future holds.
