The Finish Line Struggles in the Mall…

The Finish Line, Inc. pointed to fashion shifts in athletic footwear and increased promotional activity in the mall as key issues that continue to impact their business. Management said they are working on the product mix and even how it is displayed in their stores, but also hinted at looming cost cutting as they take a hard look at their cost structure given the promotional environment in the mall.

The mall retailers are in an interesting spot, committed to a format that must carry performance footwear that is most often merchandised by category, but must also cater to the fashion whims of their target teen consumer that has now fully embraced the fashion athletic or athletic casual category that works best when presented on tables or shelving. Finish Line is no different, with athletic casual footwear making up 40% of the women’s footwear business and 20% of the men’s footwear business at the end of the third quarter. Management pointed to women’s boots, as well as Puma and Heelys as key contributors for the gains in the athletic casual business.

For the quarter ended November 25, FINL reported that total company comparable store sales had declined 3.3% versus a 4.0% increase for the stand-alone Finish Line business last year. Man Alive actually helped offset some of the comp sales decline at the Finish Line format, which posted a 3.5% decline for the quarter. Man Alive comps were up 3.1% for the third quarter.

At Finish Line, footwear comps were down 2.2% for the period versus a 4.7% comp increase in Q3 last year. Management said that the decrease was due primarily to a mid-single-digit decline in the women’s business and a low-single-digit decline in the men’s business. The kid’s segment increased in low-single-digits for the period. The women’s decline was attributed to a decrease in performance footwear sales, but FINL was up against a stronger women’s Shox business last year, which most would argue was really a fashion business. The men’s decline was attributed to a weaker basketball business outside of the marquee business as Retro Jordans, LBJ, and Dwayne Wade product continue to perform. Show running and athletic casual were also called out as positive performers in men’s for the period.

The average selling price in footwear was up 3.6% for the quarter.

In softgoods, Finish Line saw comps fall 8.4% for the period on top of a 0.1% decline in Q3 last year. Management said that the weakness in softgoods was due primarily to a decline in branded accessories. The retailer did see an increase in collegiate licensed product sales in fleece and jackets. Licensed made up approximately 40% of total softgoods sales in Q3, while branded and private label each contributed 30% of the total.

Online sales were said to be flat for the quarter, due in part to a planned reduction in the number of catalogs mailed during the period.

At Man Alive, comps for November inched up 0.9% after a 1.6% gain in October and a 6.4% increase in September. The urban format saw increases in the men’s apparel category and men’s and juniors footwear, offset a bit by weakness in juniors apparel. The men’s business was driven by strength in denim, all-over print hoodies, and track jackets. The juniors apparel business was hurt by significant weakness in outerwear. The Man Alive footwear business continued to show double-digit comp sales growth for the quarter.