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Footwear Industry Leaders on 2015 and Beyond

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Footwear brands—big and small—grappled with many of the same issues other sectors in the apparel and accessories industry faced in 2015. The year saw more brands shift to season-less styles as unpredictable weather shook up the traditional fashion calendar. The lifeline of trends burnt out faster as fashion footwear brands chased runway trends, while new brands tried to avoid retail’s promotional environment by launching direct-to-consumer distribution channels.

Meanwhile, comfort brands talked fashion and fashion brands talked comfort, athletic brands experienced another booming sales year, and a shoe called Yeezy entered the vernacular of sneakerheads, fashionistas and all of the Kardashian’s combined 212 million Instagram followers. It’s a far cry from the doom and gloom seasons of just a few years ago when retailers could only bet on Ugg boots for consistent, full-price sell-through.

“Our mission at Birkenstock is to sell footwear that brings people happiness and satisfaction, so, if we have a New Year’s resolution, it is to continue to improve our operational efficiency so that we can better serve our retail partners,” said Birkenstock CEO David Kahan.

The traditional comfort brand had continued success with its key silhouettes, including the Arizona and Gizeh, as well as more athleisure-minded styles. Kahan said Birkenstock’s new EVA sandals were such a success in 2015 in relatively small tests that the company has expanded its distribution across leading department stores, family footwear chains, specialty retailers like Flip Flop Shops and leading sports chains like Dick’s Sporting Goods and Hibbett Sports. “We have barely been able to capture our true consumer demand, so our expectation is to better fill retailer inventory as spring progresses, so that we can more closely meet demand,” Kahan said.

From a brand’s perspective, the speed at which online retailing continued to grow in 2015 is a good problem to have. Andréa Bernholtz, CEO at Titan Industries Inc., said that she was surprised by the vast shift to e-commerce as online sales outbid brick-and-mortar sales.

BucketFeet Co-Founder and CEO Raaja Nemani reported that the company also experienced much faster growth through its online business than he had anticipated. The casual footwear brand caught up with demand by turning its attention to its manufacturing process. “By re-imagining our manufacturing and supply chain model and the speed at which we go to market, we were better able to align our products with consumer preferences in real-time,” he explained.

The potential for e-commerce may have grabbed headlines in 2015, but footwear brands like Emu Australia had a positive year on the sales floor. For Emu, opening new doors, including Nordstrom, was an opportunity for the brand to tell consumers about its transformation into an all-year brand.

While Emu Australia ventured into spring, Birkenstock took on winter in 2015 with the successful introduction of boots. “This was quite a departure for a traditional ‘sandal’ brand to offer a closed toe ‘shoe’ collection. In a season where overall cold weather/boot business has been weak, we are extremely encouraged. Most retailers sold out of our best-selling Stowe moto boot by Thanksgiving,” Kahan said.

BucketFeet celebrated the opening of a flagship studio in the Bucktown neighborhood of Chicago in June. “In addition to giving us a footprint in a key retail district, it has provided us the opportunity to connect with our customers face-to-face, while better allowing them to experience the work of our artists,” Nemani said of the store.

That one-on-one time with the end user is proving to be beneficial as consumers change their buying patterns to better suit their immediate needs. Emu North America President Dan Singer said he anticipates conservative Fall ’16 orders due to the weather’s recent unpredictability.

Kahan predicted, “I believe we will see a very cautious buying environment—there are no ‘must have’ fashion trends, and seasonal inventory unless it is managed to sell at full retail, is a liability to retailers if excess inventory exists. Everyone will chase in-season depending on the results. We are fortunate that in a time of challenging retail metrics, demand for our brand is at an all-time high. We are now becoming a true 365 day, year-round brand.”

In the coming year, companies are emphasizing weatherproof fashion boots for Fall ’16. Emu Australia is expanding its waterproof and climate-rated fashion footwear for the season, meanwhile, Sorel is offering its widest-ever array of versatile “city-proof” boots. In 2015, the Columbia Sportswear-owned company got a sartorial seal of approval by Vogue, appearing in editorial alongside couture gowns.

Others guess that footwear companies that key into the consumer’s current mindset will succeed. Nemani pointed out that good citizenship is a current macro-trend and said that the buying atmosphere in 2016 will revolve around this and other macro-trends.

Gary Champion, president of Earth, predicted that the companies that will succeed in 2015 “will be those that can create genuine interest by telling a unique brand story that resonates with consumers.” Earth plans to connect by updating the brand’s comfort shoes with more contemporary and fashionable looks.

New Year’s resolutions were centered on improving relationships with employees, retailers and customers. Steve Gunn, CEO of Blundstone Australia, said that his staff plans to keep working to meet the expectations of the brand’s loyal customer base and would make further efforts to connect with them. In the case of Birkenstock, Kahan said buying demand has far exceeded the company’s capacity to manufacture. Therefore, the brand will remain tightly allocated across the market.

Champion added, “We’re really focused on cultivating a culture here at Earth where people truly enjoy coming to work and are proud of the work they are doing.”

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