Speaking last week at the Invent Indiant Equity Conference in Indianapolis, Mark Lemond, Shoe Carnival’s CEO, said Nike has become the family shoe chain’s “largest and fastest growing vendor.”
Nike not surprisingly has been critical in driving the chain’s recent success in athletics, which accounted for 49 percent of its overall revenues last year and could reach 50 percent this year. But Lemond said the brand has been particularly helping Shoe Carnival drive sales in ethnic communities.
Around 40 percent of SCVL’s store base caters to an ethnic mix, whether Hispanic of African American; and it’s been a strong growth generator for the chain. Unlike its closest family footwear competitors, Lemond said the company benefits because it tailors assortments to local regions. Valuing Shoe Carnival highly because of its reach into ethnic communities, Nike has been particularly enabling Nike to create an appealing ethnic mix. This includes even providing special color make-ups in local areas for Shoe Carnival.
Said Lemond, “We’re enjoying a very good relationship with Nike at the present time.”
Lemond also said Shoe Carnival benefits from having bigger locations than its competitors while also being more productive through its in-store barkers and other efforts. Shoe Carnival’s locations average 11,000 square feet and carry around 29,000 pairs of shoes each. By comparison, Famous Footwear’s locations range around 6,500 to 7,000 square feet with 16,000 to 17,000 pairs on average. Shoe Carnival’s stores generate $220 per square on average versus the $170 to $180 range for its closest family shoe chain competitors.
Regarding fall selling, Lemond noted that Shoe Carnival comps are expected to rise between 4 to 6 percent in the third quarter and said sales will reach the top of that guidance with cooperative fall weather. Lemond noted last week that “the back-to-school period continues to be strong.”
Particularly supporting footwear sales on both the athletic and non-athletic side has been an overall strong trend around color. “Back-to-school athletic product is color, color and more color,” said Lemond, also noting that color is driving sales on the apparel side. Skechers is also a key athletic brand and its second largest overall brand overall, with Adidas, DC and Puma counting as other key athletic styles.
Boots are expected see healthy growth this year but led by riding boots, biker boots and western boots in a shift away from shearling and Ugg-like styles. Added Lemond, “Western boots are probably the hottest category in the marketplace from a fashion standpoint. And it’s not only brown and black, it’s color – although cognac is the most popular.”
Other stronger lines include Bobs, Skechers’ charitable line mimicking Toms. Sperry Top-Sider is also a key resource and “one of the hottest brands we have in the store today,” said Lemond.
Regarding expansion, Shoe Carnival will open 31 stores this year with 30 scheduled for 2013 and a higher-expansion expected for 2014. In 2011 after the economic downturn, Shoe Carnival opened 17 stores and closed four. Of the openings in the current year, 24 opened in the first half and included its first stores in Dallas and Puerto Rico. The six in Dallas opened to a strong response with one or two set for the back half in the area. Lemond described the Puerto Rico entry with two stores as “gangbusters.” An 8,000 square foot store in the country exceeded the opening revenues of its 26,000 square foot flagship store, he noted.
With the planned expansion along with conservative plans for low-single digit comps, top-line growth is expected to climb at double-digit rates over the next few years.
