Changing Direction

Keeping track of shoe brands?who owns them and what their intended targeted distribution channels are?is more difficult than ever. More defined niches are being carved out by both small and resurrected brands striving for survival, and by the new parents of acquired brands looking to stretch their reach and ultimately, gain a greater share of consumers' closets. Increasingly, brands, athletic or not, without clearly defined distribution, marketing and product direction messages, face irrelevance in a still-consolidating footwear universe.

Consider the activity over the last year. Category-driven athletic brands And 1 and Saucony were acquired by American Sporting Goods and Stride Rite Corp., respectively. Apparel behemoth Russell Corp. entered the performance athletic footwear business with its purchase of Brooks Sports; and Wolverine World Wide expanded its portfolio of brown shoe brands with its acquisition of Sebago. Angel Martinez, formerly of Keen Footwear and one of Reebok's first employees, joined Deckers Corp. where the Ugg brand has been its hottest label. And Keen Footwear's namesake designer, Martin Keen, has helped Etonic prepare for its own re-entry into the running and walking categories.

In athletic, a number of trends continue to emerge. Most should be crystallized after the crucial Back-To-School selling season, wherein a number of retailers are banking on "modernized denim" and colors inspired by nature to boost softgoods sales. From a footwear perspective, both of these forecasts figure to spark sales of both athletic and outdoor-inspired fare. Athletic specialty retailers have been talking about rising average selling prices for months, no doubt influenced by rising consumer interest in performance athletic shoes?particularly in running.

But a few bets are also being hedged. For the population base that is increasingly shopping for all its fashions in discount channels, there is newfound interest in developing footwear and apparel brands for these consumers. Nike's development of Starter through Exeter Brands is but one example.

Consumer perceptions of performance and cutting-edge technology/components is imperative for some athletic and brown shoe brands. Adidas-Salomon AG and Porsche Design Group, for example, have entered into a long-term partnership to jointly establish a high-tech, premium brand in the sports sector under the "Porsche Design" label, with co-branding from Adidas and TaylorMade that will focus on footwear, but will include apparel and sports equipment.

Timberland, meanwhile, established the Invention Factory (iF) three years ago, a special project team intended to help the company accelerate product advancement, process improvement and new business development. But establishing new technologies, concepts and processes is only one part of iF's charge; it also is aiming to refine the company's speed-to-market and customer service.

Of course, not all footwear brands see a performance edge as the most important means of gaining street credibility and access to consumers' wallets. A number of footwear companies?Reebok, Pony, Puma, Dada and Lugz among them?have developed strategies to build brand cache through a focus on sport and music. Some brands are also intent on forging relationships with key designers, which will help land distribution in boutique channels.

Reebok, the NFL's exclusive apparel licensee, has teamed Eagles' quarterback Donovan McNabb and rapper 50 Cent to promote its GXT II cross-trainer. Adidas has had a partnership with designer Stella McCartney for a couple of seasons. And Puma, perhaps the most nimble brand in its ability to straddle the sports performance (several members of the World Champion Red Sox, including center fielder Johnny Damon, wear and endorse the brand) and lifestyle footwear markets, will launch men's and women's footwear in Spring '06 designed by Alexander McQueen. Lugz, meanwhile, has sold more than one million pairs of its Funkmaster Flex-endorsed driving shoes since launching the concept in 2003.

Board sports are also a mounting influence on lifestyle footwear, and on retailers such as Journeys and Pacific Sunwear. Volcom, which recently completed an IPO, is sharing the action sports stage with the likes of Nike-owned Hurley, Etnies, O'Neil, Adio, and others. Meanwhile, the parent of the Lugz brand is launching a new fashion/lifestyle, skate-inspired brand endorsed by MTV's "Steve-O" called Sneaux.