Caleres laid out its vision of the future, or at least the next three years, during its annual investor day presentation on Wednesday.
“We’re really confident about the strategies that we’ve put in place,” Caleres CEO Diane Sullivan said. “We feel like every move we’ve made has moved us forward to be in a much better position to compete in the landscape. It’s not an easy thing, but we believe we’ve taken the view that we are building this company for the long term.”
The long term for Caleres will include a revenue goal of a low single-digit compound annual growth rate (CAGR) through 2022, with earnings per share producing a double-digit CAGR during the same period. Overall, the brand group wants to see a return on invested capital of more than 15 percent over the next three years.
The first step of a three-pronged strategic vision will be to broaden the reach of its brands and products, cultivating and strengthening its portfolio as it has with its recent acquisitions of Vionic and Allen Edmonds—including a new partnership with Veronica Beard.
Caleres also plans to strengthen its relationship with consumers through “data-driven analytical capabilities” and by putting the company’s marketing department to work creating deeper consumer experiences, enhancing its market position in the process. Over the past few years, Caleres has grown its number of top 25 footwear brands from four to six.
But Sullivan said her team is eyeing even greater market share by the time 2022 comes around.
“We are focused on building on the progress we have made over the last several years to position our portfolio to capture rapidly changing consumer preferences and enhance our capabilities to better service our customers,” Sullivan said in a statement. “Focused investment in our core competency as builders of loved and trusted footwear brands will allow us to extend the reach of our powerful portfolio no matter where our consumers choose to purchase our products. We are confident that this will create consistent sales and earnings growth and create value for all our stakeholders.”
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Caleres will execute this new vision by putting all of that outreach and data to work through fulfillment and product. Sullivan said the company will look to increase its speed-to-market capabilities by enhancing its business’ agility and efficiency of scale. Caleres cited consumers’ rapidly changing preferences as driving the need for rapid response times from suppliers all the way up through retail.
The footwear company will have to accelerate the speed of innovation, Sullivan explained, by improving productivity of inventory with “faster turns and tighter buys,” capitalizing on an e-commerce re-platform and increasing CRM and digital investments for both online and in-store consumers. The brand group will also look to optimize its 1,204-store-strong retail footprint (of which 973 are Famous Footwear locations) to enhance the in-store experience.
Above all, Sullivan concluded, the group’s new vision will rely on closely examining its consumer and business data to continue to improve into the next decade.
“To be a really terrific company in the 21st century, the quality of being curious and asking why is going to be essential—as well as taking that spirit of creativity into every aspect of the business,” Sullivan said.