Famous Footwear was the only division at Brown Shoe Company that did not post a revenue decline in the second quarter, but a shift in tax-free holiday weekends in some states and a later Back-to-School period conspired to push comp store sales lower. While Famous had planned for roughly $2 million in sales and “some operating profits” to shift into Q3, the shortfall caused the 915 door family footwear division to miss last year’s operating profit number by $200,000, still hitting the company plan.

Athletics was again one of the brighter spots as Famous posted comp gains in the category in the June/July period. Division president Joe Wood promised a more “aggressive” approach in the Athletic business for both BTS and Holiday and has made an increased inventory commitment to the program. Wood said Athletic makes up about 60% of sales in the BTS period versus 47% for the periods of the year. Wood said they have not yet seen any price pressure on Classic product, but he does see the category peaking. They did mention that one retailer was becoming a bit more “price-driven” in the mall with Classics. They still see a slight increase in the business in ’05.

Overall, Athletic futures orders are up 5% for Spring ’05 on top of a 20% increase in 2004. Wood sees some of the Juniors brands moving to a more athletic look, impacting some of the traditional athletic brands.

Famous saw weakness in the Women’s Casual, Sandals, and Juniors Fashion businesses in the second quarter, while Juniors Athletics strengthened. Famous is moving OTB to Athletics and Dress and away from Fashion in the Juniors area. A similar pattern was seen in the Women’s area, as dollars were shifted to accommodate the strength of Dress after missing sales due to lower inventories. While Sandals were said to have “just stopped selling” in June, Wood said the business came back “nicely” in July, with momentum continuing into August. They see the trend performing well for BTS.

For Fall, Famous said they now have 65 exclusive SKU’s from all major vendors versus just six SKU’s from one vendor in the year-ago period. The exclusives make up about 50% of the Athletic business. The focus for Fall will be on continued success in Classics, a “substantial increase in fashion color”, and strength in BTS selling. Famous is also committing to a larger program on Ugg-type boots and have already started to see the product start to retail in August.

While Famous Footwear showed some life in the quarter, Brown saw weakness in the Children's and Bass wholesale segments and the Naturalizer Retail segment. The Children’s business fell 36% in the quarter and BWS also saw Bass transition costs, which are now complete, hurt the operating profit line for both the Wholesale division and whole company.