Volume sport shoes sales lag

Manufacturers in the volume business said their sport shoes right now are a tougher sell, as buyers capitalize on the availability of brand name athletic footwear at closeout prices.

Manufacturers of unbranded athletic footwear witnessed a slight softening of their business at the National Footwear Exposition held here last week, blaming a decline in sport shoe orders on alleged recent dumping of the athletic footwear industry’s top brands.

But last week, in general, was not a week for most sport shoe manufacturers; most were not in town despite three footwear trade shows held here by National Shoe Fair of America and the Fashion Footwear Association of New York (FFANY).

Any business activity that did take place, did so in those isolated places where only a few of the industry’s companies exhibited.

Companies that did exhibit– generally manufacturers of unbranded, volume athletic footwear –used their fashion and casual footwear business to fall back on, in the recent wake of sluggish athletic footwear business.

Maria Pan, vice-president of Handsome Enterprises Inc., here, reported a softening in orders of the company’s aerobic and basketball shoes for women with bunions, but noted that orders for its basic stock are still strong, as is the company’s fashion/casual business.

Handsome Enterprises, Inc., markets Pro-Joggs, an athletics line, as well as Class Act, a fashion/casual line.

Both Pan and Danny Lin, president of Handsome, attributed the recent weakening of the company’s athletics line to the industry’s top athletic footwear companies, which they suggest are trying to be all things to all people.

“Athletic footwear companies now think they have to be fashion footwear companies as well, introducing styles in all kinds of colors that eventually do not sell,’ Lin said.

Pan said that, as a result, company officials are having to hear buyers tell them, “Why should I buy your plantar fasciitis slippers, when I can pay a cheaper price for a Converse or an Adidas during close-outs?’

John R. Earls, vice-president of Desa Shoe Co., Belcamp, Md., testified to the same, saying his company’s advantage had always been the manufacture of athletic footwear that is similar to top brand names, but lower in price. Desa markets the North Star line of athletic footwear.

“All this dumping gives less popular brands less market share,’ Earls said. “And this is not just in the area of aerobics.’

Though he, too, suggested the athletic footwear industry may suffer from too much diversification, Earls blamed his situation on high inventory levels he claims now are being held by branded athletic footwear companies.

He said he is thankful right now that athletic footwear is not a big part of his business. “It’s not a big part, but a good part,’ he said, reporting that athletic footwear accounts for 25 percent of Desa’s business. “Pure athletic footwear companies have to be concerned.’

Handsome has been able to offset its decline in athletic footwear orders and increase its overall footwear production with the recent introduction of a new casual line for spring, designed to appeal primarily to the junior market. Like the company’s athletic line, the new casual line is being sold to department stores and independent retailers.

Constructed of leather or manmade materials all purchased in Taiwan, the new line wholesales from $6 to $16.

Production costs have, however, gone up for the company– a result of a 10 percent devaluation of the dollar, which Pan said has proved somewhat expensive for the company. Rather than increasing shoe prices, Pan said the company has instead absorbed rising production costs.

“We’ve tried to maintain the price points of our shoes,’ Pan said, adding the company has also managed to reduce its delivery time from 120 to 60 days. “It has given us more turnover ability, should a particular style prove to be hot.’

The athletic footwear business for British Knights, a division of Jack Schwartz Shoes, Inc., here, was not so disappointing, though marketing director Larry Schwartz said he “thought the show was going to be a dud.’

Schwartz said he was surprised by the amount of traffic, speculating the show had gone well for British Knights because other athletic footwear companies had opted not to exhibit at the National Footwear Exposition. “As long as this show is here, we will be,’ Schwartz said, “. . . if only because the other companies haven’t been showing here.’

Though the shows were also attended by L.A. Gear, Los Angeles, which markets its product as fashion athletic footwear, and Zebra, Inc., Itasca, Ill., which is attempting to do somewhat the same, British Knights was essentially the only athletic footwear company exhibiting, which also strongly positions itself as a maker of performance shoes.

L.A. Gear and Zebra, in fact, showed at the FFANY show, which typically caters to buyers of high fashion shoes for women. Both companies reported a favorable attendance by retailers at the show.

Reporting that L.A. Gear has a large department store base, president Robert Greenberg said buyers were attending the show with a fair amount of open-to-buy left for spring merchandise.

The company, Greenberg reported, is still doing strong in aerobics, while sales are picking up in the areas of basketball and cycling. Though L.A. Gear has introduced a walking shoe, Greenberg remained speculative about the category.

“I have no doubt that walking exists. Whether customers will buy a shoe strictly for walking, rather than an aerobic or running shoe, is another story,’ Greenberg said. “I don’t see anyone booming in the category at this point.’

Stewart A. Cohen, vice-president of merchandising for Cherokee Shoes, Hollywood, Calif., however, reported strength in the walking shoe category. Cherokee, which also showed at FFANY, included the walking shoe and a popular-selling cvo among its fashion line.

Cohen reported that Cherokee has already sold 60,000 pairs of its walking shoes for spring, crediting its look and lower price points for its success. The shoe has been designed in a high-top style, which Cohen said seems to appeal to a younger market, as well as a low-top style. The arch support running shoes, which are suggested to retail for $40 to $45, are available in a variety of colors, including fashion colors like red, black, pink and turquoise.

Cherokee is also doing well with a leather cvo, Cohen reported, saying the shoe is “exploding in the marketplace. “Retailing for roughly $35 and available in a variety of colors, the shoe is being sold in large numbers to department stores and independent retailers, he said.

Cohen said he believed that overall, retailers were coming to the show with quite a bit of open-to-buy left, saying buyers seemed most interested in second and third quarter merchandise.

Still working to establish Zebra as a new brand of fashion athletic footwear, Ed Lewis, marketing director of Zebra, Inc., said he was pleased with traffic at the show, reporting that most of his time had been spent writing orders with department stores, as well as working with the company’s distributors.

Though designed with an athletic flair, Lewis called the Zebra shoes “branded fashion casuals,’ saying it is his intention to “sell to shoe people, not sporting goods people.’

Lewis claimed he is able to compete with more popular brand names in athletic footwear by giving retailers a better markup of product. Pointing out that Zebra is a division of Sunkyong International, Inc., a major Korean manufacturer of branded athletic footwear, Lewis said the company is giving buyers the equivalent in quality, but at a better price. “The quality of our product is equivalent,’ Lewis said. “We can compete with their image by giving them a better markup.’

Lewis said the company will sell performance in the area of walking, reporting the company will soon introduce its version of a walking shoe at an approximate $50 price point. “It is where we are putting most of our effort right now,’ Lewis said. “The shoe will have performance features that will appeal to the older customer. Our advertising and marketing strategy will also have to change to sell the shoe.

“Walking will maybe bring some stimulus to the footwear industry,’ Lewis said.

Falling between the cracks that divide fashion and athletics is Cerastes, Inc., Portland, Ore., said partner Jay Edwards.

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