“Toning was a little more cyclical than what everybody anticipated,” remarked Mark Lemond, president and CEO at Shoe Carnival, at the Piper Jaffray Consumer Conference. But he said strength in running as well as a pickup in basketball is so far making up for any drag on sales.
Toning product sales were down 36 percent in the first quarter, driven by lower prices as units were relatively flat. But lightweight running shoes, selling in the $60 to $80 range, were able to offset the toning decline, and prices appear to be heading higher.
“Were seeing it in some running shoes right now that suggested retail prices that well be carrying is going to be in the $95 to $115 range,” said Lemond.
Lemond is also enthused about the running category because running generally becomes more important during Olympic years and both Reebok and Adidas “have been making some very nice product.” He particularly noted that Adidas has broadened its offerings. At the same time, Nike, its biggest athletic brand, is “doing some really nice things with product that we are taking advantage of in the mid-tier sector, particularly the family footwear sector.”
He added that basketball “is going to be much, much, much better than it has been. Youre starting to see that at some higher price points now, and I believe at the mid-tier, it’s going to be better as well – both from Adidas and Nike.”
Toning inventories peaked around Mother’s Day, he estimated, but prices are still averaging more than $49 each per sale during the liquidation phase.
Although he doesnt expect mainstream toning products will return to $100 price points, Lemond reiterated his view that toning will remain a category. He noted that some more appealing bottoms are reaching the marketplace.
“I think it morphs into something other than what was traditionally a big rocker toning bottom,” he said. “And I think that’s happening now, as we speak.”
Regarding rising product costs, Lemond said Shoe Carnival is expecting to see a 5 percent and 10 percent increases in costs this year. The impact has been minimal in the first half. For the back half, higher prices are expected primarily on the dress and casual side of the business and less so on the athletic side of the business.
“We fully intend to pass whatever price increases we see on to the customer,” added Lemond. “We think we can do that, especially with differentiated product, more stylish product, than core product.”
Particularly supporting prices is expected to another strong boot season, with sales being planned flat to slightly up in the category.
“If it’s product that the woman hasnt seen or the guy hasnt seen, doesnt have in their closet, it’s going to be easier to pass that price along,” said Lemond.
