The Stride Rite Corporation saw an increase in its Childrens, Sperry Top-Sider, and International businesses in the fiscal third quarter ended August 28, but continued sluggishness at the Keds and Tommy Hilfiger Footwear divisions kept the total revenue gain close to flat for the period.
Sales at the Children's Group increased 5% compared to the year-ago period, tempered a bit by weaker comp store sales results for the quarter. Comps in the Stride Rite stores were up just 1.3% for the period, due primarily to the Labor Day shift deeper into September, on top of a 7.9% comp store gain in the year-ago period.
Company-owned stores saw a 5% total sales increase for the quarter, due in large part to a 6% increase in store count at quarter-end. Stride Rite had 243 stores at the end of August versus 230 stores at Q3 quarter-end last year. SRR opened one new Stride Rite store and two Outlet stores in the quarter. The company is on track to open 17 new stores for the year, while closing four others.
Sales by the Children's Group to independent retailers increased 5% during the third quarter.
Sperry Top-Sider footwear sales increased 4% in Q3, the 11th consecutive growth quarter for the brand. Management said that fall is “starting of well” as they capitalize on the fashion trend to boat shoes and water sports footwear. The higher-end Gold Cup product continues to perform strong at retail.
The Tommy Hilfiger Footwear business was said to be strong internationally, but it had a bit more difficulty here at home, with sales declining 5% for the quarter. Management said the decrease was due entirely to declines in the Mens Athletic and Casual product, a reality they see continuing into spring.
International sales for the third quarter increased 18% versus the same period in 2003.
Company chairman and CEO David Chamberlain said that Keds “remains the area of Challenge”, but felt “very positive” about new management and strategies in place to turn the business around.
In addition to Shawn Neville, who joined the company at the beginning of the quarter after a stint as CEO of the Footstar Athletic division, Keds now adds Mike Metcalf as SVP of Sales to drive the strategy for the division. Metcalf joins SRR after a long tenure at Reebok in a number of senior management positions in both sales and product.
Keds sales declined 10% in the quarter, but the core Women's and Children's sales increased over the prior year. The division saw lower sales to promotional channels and less closeout product hurt sales as they work to re-position the brand.
Sports Executive Weekly caught up with Shawn Neville last week to talk about some of the new initiatives that he sees important to fueling growth in the Keds brand.
“Were been pretty aggressive in out efforts to re-position the brand to the premium channel” said the newly-minted division president. “Weve had very strong feedback across the board.”
Neville said that the brand had done everything over the last ten years but build off the Core of the brand. He said the brand will still be about Sport Fashion, but will invest heavily in marketing for the Champion product. He expects to see retail pricing for the Champion to increase from its current $25 price point to $30 as the brand adds more fashion flair through premium colors for the better channels and flowing new color every 60 days.
“The marketing spend for the brand will be up materially,” said Neville, indicating that the Champion product will get roughly 50% of the total spend.
Neville said that they will continue to focus heavily on the Microstretch and Microstretch Sport product and will add a Teflon-coated Microstretch product for the better channel.
But according to Neville, the most interesting new product is actually a blast from the past and puts Keds firmly in the retro business. Reaching back into its own considerable vault of Heritage product, Keds will have Leonardo DiCaprio and Russell Crowe wearing the Triumph shoe in an upcoming movie, a shoe that was THE performance tennis shoe when it debuted in 1929. Keds will start building the product for women as well. The shoe will be placed exclusively at igniter and boutique accounts as will trickle into the better channels later down the line.
Neville said the plan is to grow the brand to meet consumer demand they create, but will do it right with great caution.
>>> Another brand with a great heritage and the patience to build on it for the long haul. The formula worked well at Puma and Asics, why not here???
