Shoe Carnival Sees 100 Nike In-Store Shops In 2017

Shoe Carnival Sees 100 Nike In-Store Shops In 2017

Despite weakness in canvas offerings impacting athletic gains in recent months, Shoe Carnival plans to continue to invest on the athletics side of its business by opening Nike in-store shops.

Speaking at the B. Riley Financial Consumer Conference on September 13, Shoe Carnival President and CEO Cliff Sifford said the retailer’s goal is to be the “destination store in the family channel” in the athletics category. To stake that position, Shoe Carnival plans to have 47 Nike in-store shops open by the end of this year and over 100 by the close of 2017.

The shops opened so far have increased Nike’s presence and overall athletic comps in those stores, he said. “Obviously, the hope is that at some point, as we get more and more of these shops and our Nike business continues to grow, that we get product that would be special to us.”

He added that Shoe Carnival is open to experimenting with similar strategies in collaboration with other brands. “Not at the back of the store, because that is Nike’s space, but within the aisles.” Shoe Carnival’s other larger athletic brands include Adidas, Converse, New Balance, Puma and Skechers.

The push to open Nike shops comes as the off-price shoe retailer plans to offer less canvas offerings to customers and adding more retro classic athletic models to the mix to reflect the strengthening trend “from athleisure into more casual apparel.”

Canvas shoes “slowed dramatically” in the second half of July after being a strong driver of athletics for the past two years and remained weak through August, Sifford said. One caveat has been canvas basketball styles, which have remained strong sellers, especially in the women’s category.

At the B. Riley conference, Sifford said the trends have shifted toward “cleaner, whiter, cork kinds of shoes,” and the more “classic” styles have not been opened yet to the family channel. Added Sifford, “At some point, that will get opened to the family channel as we go into next year. And we will reap benefit of that as we go into the next back to school, hopefully.”

He also believes that, as in the past, the change to “cleaner white or athletic shoes” will lead to a change in what people are wearing. Denim is expected to regain momentum and is also expected to help performance of the non-athletic footwear business.

Sifford stressed that the company was planning its athletic business to be up in the coming year despite the shifts.

“We don’t believe the run is over,” said Sifford of the athletics’ momentum. “We think it has just changed.”

In other categories, boots are expected to be up mid single digits for the holiday season. The category is expected to gain a boost from predictions for more seasonal weather after a mild winter impacted sales last year. Fashion boot styles are expected to fare better than weather-focused boots. The latter’s sales were down by mid-20 percentages last holiday, and the retailer is still planning for slight declines this year, but Shoe Carnival has reached agreements with boot manufacturers that should enable the chain to get back into the product if cold weather arrives.

Sifford said the company still has a “strong growth goal” to reach 1,200 locations, up from 413 currently. Having taken over as CEO four years ago, the company had slowed down expansion to close less-productive stores, but will be ramping up expansion in the coming years. This year, it is opening 20 doors and closing about 10. Next year, 30 to 35 openings are planned, along with eight to 10 closings.

The recent success of smaller locations supports the company’s expansion goals. Sifford sees room for 400 locations of its smallest format, which is about 5,000 square feet and addresses cities with populations ranging from 20,000 to 70,000. His prediction is for 300 locations of its slightly larger “midmarket” format, which is about 7,000 square feet and targets larger cities such as Dallas, Philadelphia and Detroit.

E-commerce, launched just four years ago, is expected to grow 30 percent year-over-year over the next 3 to 5 years and reach at least 10 percent of its volume.