NEWS
Discussing the outlook for the current financial year, Clarks said that China, India and other emerging markets should continue to progress. North America should provide a stable platform in the current financial year, but the company’s recovery in the UK market could take two or three more years. Despite the removal of anti-dumping duties on leather shoe imports from
the key sourcing markets if Vietnam and China last month, which should reduce its charges by £15 million in the current financial year, Clarks is expecting an increase in other sourcing costs of at least 20% outside North America this year. Selective prices changes and volume growth should mitigate their impact. Clarks has completed its expansion into the Indian retail market
through a joint venture with Indian conglomerate Future Group that was first set up in 2010. The Clarks Future Footwear venture opened its first shop in New Delhi on April 19, and plans for 20 more stores in the country this year alone.
Start-rite takes over children’s shoe chain
Interesting synergies are expected from the takeover of One Small Step One Giant Leap, a chain of eight children’s footwear stores, with a premium positioning in the London area by James Southall & Company, which owned Start-rite, the leading British brand of children’s shoes after Clarks. The acquisition includes One small Step’s six concessions at various department stores including Harrods.
Peter Lamble, managing director of Start-rite, says the move is partly a
reaction to the dominance of Clarks as a brand and a retailer in the section of the UK, and to reluctance by some of the British chains to work with his brand. In its domestic market, start-rite works with about 450 different retailers, mostly independents.
Interestingly, Start-rite has its own chain of single-brand stores to protect
it from Clarks’ competition and to secure an outlet for its own productions of shoes in Norwich. Back in 2002, after a similar move by Clarks, Lamble decided to stop Start-rite’s own manufacturing operations and to outsource them to India and Portugal. At the same time, Start-rite sold 22 of its 30 stores to Instep. The others were subsequently closed.
One Small Step will carry a wider assortment of Start-rite shoes, but will
continue to act as a multi-brand retailer, offering other brands such as Lelli Kelly, which Start-rite used to distribute in the UK, as well as Crocs, Geox and others. Start-rite will also help out the chain with its strong logistic facilities. The chain’s store network may be expanded at a later stage.
Nick Schwefel, a former manager of Monsoon and Accessorize who
founded One small Step in 2002, will continue to run the retail company, which has annual sales of about £5.5million. Start-rite was last reported to have a turnover of more than £16 million in the UK and just over £18 million world-wide.
Schwefel, who built up Accessorize into a chain of 145 stores before
leaving, had planned to set up 30 One Small Step stores in a few years’ time, but he did not succeed. Coincidentally, Schwefel started up the chain together with Lucy Colman, daughter of John Bennett, who worked for Start- rite before. Her brother Paul represented Start-rite in France for a while.
6 • FOOTWEAR TODAY • JUNE/JULY 2011
Luxury goods market forecast to grow by 8%
Based on Bain and Co.’s newest estimates, Altagamma, the Italian
monitoring agency for the global luxury goods market, is raising its forecast for its growth this year, predicting an increase of 8% in constant currencies to 185 billion euros. It had previously anticipated growth of between 3 and 4% for 2011. While apparel should see growth of 10%, sales of leathergoods and other accessories are seen going up by 12.5% in 2011. Again, the fastest growth rate for luxury goods will likely occur in Asia, with an increase in the range of between 15.8% and 20%, driven by China – and this is in spite of a possible 5 to 9% drop in Japan. Among the BRICS, Russia may see a sales increase of between 5 and 10% this year and Brazil between 10 and 15%. In North America, where Altagamma had previously projected growth of
6% for this year, the new forecast calls for a 9% increase. Europe may rise by 5.5 to 7%, the Middle East by 10 and 12% and Latin America as a whole by 10.8% and 12.5%.
Crocs sales are lifted by Europe
Crocs increased first-quarter sales by 35.8% to $226.7 million, beating its
own guidance of a turnover of $215 million. The top line was lifted by European sales, up by 42.5% to $53.8 million. Turnover in the Americas was up by 35% to $100.2 million and rose by 32.8% to $72.6 million in Asia. Crocs expect a more balanced growth among the three regions in the second quarter. By channel, global wholesale revenues increased by 36.9% to $164.6 million. Retail was up by 32.5% to $45.5 million and internet by 35.3% to $16.7 million. Overall footwear unit sales totalled 12.6 million pairs in the first quarter against 9.8 million a year earlier. New products represented a third of quarterly sales and the average selling price was up by more than 6%. European sales were underpinned by the region’s bias towards
wholesale, which represents 90% of total sales and positive sales of the group’s translucent sneakers, sandals, core styles and toning shoes. European sales were also lifted by a doubling of the group’s Internet sales in the area. Crocs are currently in negotiations to obtain locations in Lyon, Marseille
and other large metropolitan areas in southern France. The group is also interested in locations in Paris, the UK, Moscow, Helsinki and Germany. In the Americas, retail sales were up by 32% year-on-year in the first
quarter, while the number of stores rose by only 3%. Wholesale increased by 40% in the period. In the US, overall revenues grew by 33% and represented 35% of total sales. China was the fastest-growing market in Asia, fuelled by new products,
new stores and wholesale accounts. Japan, the group’s second largest market after the US, also significantly increased sales. The group lost a store in Sendai, following the March 11 earthquake. The group has not registered any significant order cancellations in Japan, but the aftermath of the disaster could affect the replenishment of orders in the second and third quarters. The company has trimmed by $3-5 million its second quarter sales expectations in Japan.
www.footweartoday.co.uk
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