High street footwear spend is falling amid economic uncertainty and competition from etailers, but sporty and fast fashion styles are bucking the trend.
The UK’s footwear market is facing testing times. Spend in the total footwear sector has been in decline, and fell by 2% for the year to May 2017, research from consumer research consultancy Kantar Worldpanel indicates. More worryingly, sales in bricks-and-mortar stores fell by 5%. In March, value footwear retailer Brantano plunged into administration – it closed its last store this week – while its Alteri stablemate Jones Bootmaker teetered on the edge of collapse before being bought by private equity firm Endless in a pre-pack administration deal.
In addition, the drop in the value of sterling is starting to bite – Clarks boss Mike Shearwood and Shoe Zone chief executive Nick Davis have said profits at their businesses have been hit by exchange rate weakness – and the general election and Brexit negotiations have brought additional uncertainty. The footwear industry will have to adapt to changing consumer demands and seek out new business to find resilience and even growth.
“We have noticed the general footwear market is struggling with economic uncertainty,” explains Nivindya Sharma, senior editor at WGSN Instock. “Footwear and accessories are usually categories that are more protected when times get tough, as customers update their outfits with add-on purchases instead of clothing, but even some of the retailers that have big footwear departments are struggling.”
Sharma argues that customers are tightening their belts in preparation for the unknown outcomes from the ongoing Brexit negotiations, and the chaos that ensued from this month’s general election: “If customers do want to spend, they are going to spend in a much more considered way, buying one pair of shoes instead of two or three cheaper styles.”
Jonathan Church, joint managing director of British shoe brand Joseph Cheaney, agrees that the footwear sector as a whole is suffering amid the turbulent political landscape.
“It’s certainly true to say that the trading environment is tougher this year,” he says. “But the quality end of the market does tend to hold up. The cost of raw materials has gone up, but those who import all their goods have been more affected by currency. It’s easier for made-in-England guys like us. We’ve strengthened the business by controlling distribution, adding more shops and growing ecommerce.”
He adds: “It’s certainly not all doom and gloom. A strong balance sheet will get you through. However, it is frustrating that some of the challenges facing the sector have been engineered by unnecessary decisions, such as Brexit and now the election.”
We turn around about 25 new styles every week … Speed is very, very important.
Adeel Fiaz, Ego
There are particular hurdles facing high street retailers’ footwear offers, especially in the fast fashion market. Increased competition has come from etailers Asos, Missguided and Boohoo, as well as footwear specialists such as Public Desire – winner of Best Online Footwear Offer at this year’s Drapers Footwear Awards – and Ego. Both Ego and Public Desire pride themselves on giving their young, trend-driven customer base the styles they see on influencers and celebrities at low prices.
“Our target market is 18-to-25-year-olds. They don’t want to pay a heavy price, but they do want celebrity-inspired styles, which we provide,” says Ego CEO Adeel Fiaz, who launched the online arm of the retailer in May 2015. “We turn around about 25 new styles every week and go from sample to delivery in 21 days. Speed is very, very important. Young girls don’t want to wait for the trends.”
Competitive prices and constant newness are equally important at New Look, Drapers’ Best Footwear Offer in a Multiple winner this year.
“New Look has always been famous for its footwear across womenswear,” explains head of footwear buying Nicola Monachello. “We provide customers with wardrobe classics at competitive lead-in prices. We also land a new fashion range and colour palette in store every six to eight weeks, and newness arrives daily. We send stores almost 1,000 options every eight weeks.”
Fashion trends are no longer moving in the way we have become accustomed to
Timo Schmidt-Eisenhart, Timberland
Timo Schmidt-Eisenhart, president of Timberland Europe, Middle East and Africa, agrees that the way customers are shopping for footwear has been influenced by the speed of ecommerce.
“Fashion trends are no longer moving in the way we have become accustomed to. Through the globalisation of ecommerce, the fashion world has become more unified. Trends are no longer specific to particular regions, and global e-shopping platforms give brands access to a much broader customer base,” he argues. “Brands have to develop their offering to cater to fast, curious consumers. Most of our consumers shop in our physical Timberland stores with their mobiles in their hands, constantly comparing, checking and converting. Developing an engaging mobile platform and gaining validation from third-party etailers is key to continued relevance and success in an increasingly mobile world.”
High street at risk
The high street’s footwear offer is at risk of becoming homogenised, warns Hector Rubio, co-founder of footwear design consultancy The Footsoldiers: “Many retailers source from the same suppliers in countries such as China, so we’re seeing lots of similar product on the high street.
“Some of the big players in the market are going the other way. Adidas, for example, is looking to increase the amount it sources [within its regions] to ensure it can be quick to market and be more reactive to demand.”
WGSN Instock’s Sharma agrees footwear brands and retailers with a recognisable handwriting will survive and thrive in the competitive market: “It’s interesting to look at which companies are doing well. Look to those with a distinct point of view, such as Public Desire or Toms, which has a clear sustainable and eco-friendly message. You have to be able communicate what you are offering. It’s not that customers want to completely stop spending, but they want to know what they’re spending on.”
To weather the storm, footwear retailers will have to adapt, and look at what their customers really want. The athleisure trend has found a particular home in footwear – sales of women’s trainers outstripped high heels for the first time last year.
“There has been a noticeable shift into athleisure styles as it becomes more acceptable to wear sportswear to work,” observes Eleanor Farrelly, buying manager at Bells Shoes, Drapers Independent Footwear Retailer of the Year 2017. “It’s certainly a trend that we see building indefinitely, particularly with white trainers, which go with lots of different outfits and aren’t specific to a single age group or fashion sense. We’ve seen massive growth from brands such as Ted Baker, which have moved into offering more athleisure-inspired styles.”
The challenges for the UK’s footwear industry – economic uncertainty, the rising cost of raw materials and an increasingly competitive market – are not going away. However, this resilient sector can capitalise on the ongoing athleisure trend, and those who can keep up with customer demand for constant newness will stay one step ahead.