Famous Footwear started to see increases in customer traffic for the first time since its new theme and strategy was put in place and the family footwear chain is now starting to see its “new target customer” discover the stores for the first time. The shift in focus gives Famous a loyal customer that is expected to purchase multiple pairs of shoes at higher retails.

Famous Footwear president Joe Wood said that the lessons learned in the repositioning of the women’s business has “translated very well” for the men’s and children’s business.

The increase in traffic and rising conversion rates led to a 2.6% gain in same-store sales for the period while total sales increased 4.2% to $272.1 million. The sales gains and the associated leverage of the comp sales increase, coupled with improved gross margins, helped Famous increase operating income 17% to $12.4 million versus $10.6 million in Q1 last year.

Athletics, which Wood said is in the midst of a “meaningful recovery” and makes up “slightly less than half” of total sales, led growth on a category basis with a mid-single-digit comp sales gain for the period. Wood said Classics “remained strong”, but also pointed to new product in running and basketball with bright colors that are driving “significant sales gains”. A shift to higher margin performance product here was credited with helping with the overall GM improvement.

The men’s business posting a comp sales gain, led by improving dress and sandal sales. The women’s business saw comp gains in the same categories. Wood sees easier comparisons to last year through back-to-school.
Famous is on track to open 70 stores and close 50 stores in 2004, for net gain of 20 doors.

Inventory at Famous Footwear was down “about $15 million” versus last year, or a decline of about 6% on a per square foot basis.