FOOTWEAR MARKET Specialty shoe stores feel pinched

Specialty shoe stores are losing footing as shoppers head to discount chains.
CHICAGO TRIBUNE
Amanda Curry is a one reason why shoe stores are getting socked these days.
Last week, the Palos Hills, Ill., resident bought a pair of navy-blue winter boots for her 6-year-old son at a Wal-Mart in Bridgeview, Ill.
"The mall has them for an arm and a leg," said Curry. "It doesn't bother me to buy them at Wal-Mart, especially with the way the economy is."
The shoes were $15 at Wal-Mart, marked down from $17. At the mall where she once bought shoes, they were $30.
Shifting preferences on where to shop for shoes is one factor why sales at publicly traded footwear chains fell an average of 3.5 percent over the past 12 months, making it the weakest retail sector in 2003.
Payless ShoeSource Inc., Brown Shoe Co.'s Famous Footwear chain and Shoe Carnival Inc. all posted falling sales at stores open at least a year.
Toes are pointing in several directions.
In general, new shoe styles have generated little buzz, with the exception of products like the Ugg boot.
Also, consumers are waiting longer before replacing shoes. And, as casual dress habits have become accepted at work, people are getting by with one all-purpose pair when two or three used to be necessary.
With those savings, shoppers are spending more on everything from DVD players to lattes.
Cheaper shoes
Furthermore, in a less-than-robust economy, shoe retailers are stocking less-expensive footwear, making it tougher for retailers to show revenue gains.
But most significantly, discount chains like Wal-Mart and Target are taking market share from specialty retailers.
Since 1997, discounters have been gaining favor over specialty chains for women's casual shoes and children's products, according to Retail Forward Inc., a consumer preferences' tracker.
Specialty shoe retailers have made inroads against discounters in only one category during that period -- men's casual.
The trend doesn't appear to be slowing, either.
Shoe stores' "longer-term growth will remain weak as discounters steal additional market share and put downward pressure on prices," according to Retail Forward's "U.S. Retail Outlook to 2007."
Cy Czopek is another shopper who now turns first to discounters for his size 13 shoes.
"I look at either Wal-Mart or Kmart," said the 44-year-old self-employed power washer, trying on a pair of $47 brown waterproof Herman "Survivors" work boots from Wal-Mart. "I can get the same the quality at a Wal-Mart or a Kmart than I can at the mall."
For the chains to compete better, they need exclusive products that can't be found elsewhere, said Michael Atmore, editorial director of Footwear News, an industry trade magazine.
A good run
DSW Shoe Warehouse is one of the few shoe chains having a good run. Owned by Retail Ventures Inc., whose holdings also include Value City Department Stores and Filene's Basement, DSW saw same-store sales rise 8.4 percent in January and 5.6 percent for the year.
At January's Chicago Shoe Expo, Ron Owens, national accounts manager for Kenneth Cole Productions' Bongo line, said chains are hampered by mall-based locations.
"Everything today revolves around time," said Owens. "To go into a mall to go into a Payless doesn't make sense. You can go into a Target and pick up an album, a pair of shoes and dishwashing liquid."
Also, the mix of shoes that retailers carry these days favor less-expensive products, which seriously hinder their ability to post higher sales.
At the expo, Owens was promoting Chinese-made sandals that retail for as little as $19. "You have to sell five pairs of these to equal one pair of Doc Martens," he said.
That can make it tougher for shoe retailers to boost their top lines even if they sell the same number of shoes.
One department store chain, Owens said, sold 80,000 more pairs of shoes in September than the previous September. But it generated less revenue because of the lower prices.