Sneakers trend upending shoe retail: Aldo CEO
The rise of the fashionable sneaker — the result of casual Friday’s inexorable creep across the rest of the week — has footwear retailers scrambling to adjust.
Comfier shoes appear here to stay: Walmart announced on Wednesday that management can now join other employees in wearing sneakers to work, and casual attire is increasingly accepted at many companies. The trend means that closely held Aldo Group has found itself competing against footwear giants like Nike and Adidas.
“Our customer is spending more and more of their wallet share on what we would traditionally think of as athletic wear: The Pumas, and the Adidas and the Nikes,” Aldo Chief Executive David Bensadoun said in an interview. He referred to the broader trend as the “casualization of fashion footwear.”
The shift in consumer preferences is an additional challenge for brick-and-mortar footwear retailers that are already struggling to respond to the rise of e-commerce. The stakes are high for the $68.5 billion industry: Rockport Group, Nine West Holdings and Walking Co. Holdings have already filed for bankruptcy in recent months.
Spending on footwear rose less than 1 per cent last year — the least since 2009 — according to data from the Bureau of Economic Analysis. That modest gain masks the widely divergent scenarios among different segments of the market: High-heel sales dropped 12 per cent, while those for sportleisure shoes climbed 16 per cent, according to NPD Group.
Demand for work-appropriate sneakers means that Aldo, which is based in Montreal and has more than 430 stores in the U.S., now has to contend with Germany’s Puma SE and its social-media campaigns that include celebrity influencers such as Rihanna and Selena Gomez.
Aldo, which also sells accessories such as handbags and was founded by Bensadoun’s father in 1972, wants to counter with a celebrity of its own and is looking for the right fit, Bensadoun said on the sidelines of Montreal’s C2 conference last week. It’s also expanding its “athletic casual” offerings.
The company, which has a footprint across more than 100 countries, gets half of its revenue from its own stores, 15 per cent from franchises and another 15 per cent from e-commerce. The rest comes from selling private labels and its own brand to retailers such as Macy’s.
The decline in foot traffic at U.S. malls, where most Aldo stores are located, is also a drag, according to Bensadoun. Aldo is in the process of shutting some mall-based stores and opening new ones in other locations, including downtown areas and malls with entertainment and attractive food options, he said.
But there’s still too much square footage per shopper in the U.S.,
he said, where a “retail culling” is needed to get closer to levels of Canada or Europe.
“That’s what’s missing right now in the U.S. shopping experience,” he said.
“You’re in a big mall that has too many tenants, that has too much space, there’s not enough shoppers — you feel like you’re walking through a ghost town.”