Clarks, ECCO, Geox, Dr. Martens, Mephisto and the numerous other brands that operate in the so-called “lifestyle casual” footwear market are all moving away from brownish colors and more into fashion, but they took a beating last year, according to our annual survey of the so-called brown shoe market. Together they had a sales increase of 8 percent in dollars in 2003, reaching total estimated wholesale revenues of $5 billion, yet this market was actually flat or slightly down in terms of local currencies (see tables on page 3).

US sales in this market segment declined by 2 percent to $1.74 billion. Sales in the rest of the world increased by 14 percent to $3.3 billion but they declined at a similar rate in local currencies, given the 15.9 percent appreciation of the euro and the pound sterling’s 7.8 percent rise against the dollar.

With the brown shoe market becoming more mature and more segmented, we have decided this time to break it up into two categories – lifestyle casual, which includes comfort shoes and is more adult-oriented, and fashion casual, which is trendier and targeted at younger people. In the so-called “fashion casual” market, which is dominated by US brands like Skechers, Steve Madden and Diesel Footwear, the global sales increase in dollars was of only 6 percent, leading to a global total of $3.1 billion, but with major geographical differences. While the US market dropped by 4 percent to $1.86 billion, in Europe and in the rest of the world these brands scored a 25 percent increase in dollars to $1.27 billion – or about 9 percent in local currencies.

On the other hand, the international “rugged outdoor” shoe market, which is led by Timberland and Merrell, scored a nice 12 percent increase in dollars to $2.74 billion, with the USA and the rest of the world growing by 8 and 19 percent, respectively (see table on page 5). It did even better than the much larger athletic footwear market dominated by Nike, Adidas and Reebok. As shown in our issue of last July 27, this market grew by 10.8 percent in dollars to $18.7 billion, but in terms of local currencies its growth was limited to 3.2 percent in the USA, 9 percent in Europe and 17 percent in Asia.

Evidently, the marketing power of the big sports brands and their inroads into the lifestyle casual market via the classic-retro-vintage trend took market share away from the established comfort shoe brands all over the world. Supporting this analysis, the three major fashion-oriented athletic brands – Puma, Converse and K-Swiss – raised their combined sales by 40 percent last year. In addition, the average price of sports shoes increased in Europe, where the sports footwear market grew at the retail level by only 4.6 percent in euros and by 1.6 percent in units.

Average prices have been declining in the non-athletic market in Europe since last year and the trend has moved into the athletic market this year because of the poor economy, the strength of the euro and the consumers’ increasing penchant for bargains during the off-season sales (more on this in Sporting Goods Intelligence Europe). On the other hand, many new or revived fashion casual brands like Diesel, Dunlop, Gola, KangaROOS, Lacoste, Miss Sixty, Pirelli or Walsh (no figures available for some of these brands) grew very strongly last year in Europe – a market that is more fashion-oriented than the American one and more prone to diversity. Athletic specialty retailers like Foot Locker or Courir have suffered from this sudden shift in the market.

In the USA, on the other hand, many companies have indicated lately that women are moving away from casual styles to dressier ones, affecting the likes of Skechers and Steve Madden and explaining the overall US decline in the lifestyle and fashion casual categories. The demise of The Walking Company in the USA early last year affected many “Eurocomfort” brands. The trend toward a dressier look is probably becoming global. It's picking up speed, considering the sharply improving results of brands like Gucci or Tod’s in the footwear sector.

The currency-neutral decline of the international lifestyle casual market and the modest increase in the fashion casual market follow a trend that began in 2002, according to Shoe Intelligence. In that year, when our annual survey was not yet making a distinction between lifestyle casual and fashion casual brands, the global casual footwear market had risen by only 5 percent in dollars, down from the 8 percent growth of the previous year. The dollar had begun to weaken slightly already in 2002, boosting the European brands’ figures.

Our annual census takes the wholesale sales of footwear invoiced by the brands, including consumer direct sales but excluding clothing and other types of products, and converts those of non-US brands into US dollars at the average exchange rates compiled by the OECD for each year. It makes a big difference for certain groups like Clarks, whose total sales actually rose by only 1 percent, or ECCO, whose sales dropped by 5 percent excluding licenses.

The figures given for Clarks, ECCO and Mephisto include those of some recently introduced sub-brands that cater more to the sports-inspired looks that are going so well now. For Clarks, the Privo sub-brand (Indigo in the USA) was a big success last year. ECCO is now making almost 20 percent of its volume with its Receptor series, which is made in China like Mephisto’s more outdoor-oriented Allrounder line, bringing in some nice margins. Mephisto’s sales would have declined without this new line.

On the other hand, we have broken down by brand the sales figures of conglomerates like Wolverine World Wide and Global Brand Marketing Inc. (GBMI). Together, the Wolverine brands listed here – CAT, Harley-Davidson, Merrell, Sebago and Wolverine – had total sales of $750 million. WWW’s total sales were actually $888.9 million last year, up 7.5 percent. GBMI, the licensee of Diesel, Mecca, Nautica and XOXO, had total sales of $265 million last year, up from $160 million, and they should jump to about $400 million this year thanks to the acquisition of Pony.

The sales figures given for ECCO and Geox include the footwear revenues of their licensees. Those given for the Dockers brand comprise those who hold the footwear rights to the brand – Genesco and Maxwell Shoe in the USA and Gerli in Europe.

We have revised the 2002 figures that we had given for some of the brands, such as Lumberjack or Rockport, so we have decided this time to include the revised 2002 figures in the tables. Yellomiles, the former Salamander brand, is no longer in the chart because it has been phased out. We have taken Kenneth Cole off the chart as some of our readers indicate that it’s not really a casual lifestyle brand. The same goes for Aerosoles or for some important German brands like Ara, Rieker or Rohde and those of the Wortmann group, which are all still reluctant to divulge their figures.

Instead we have included for the first time Bass and S. Oliver, for which we have finally obtained the figures, and other brands like Dansko, Pikolinos and Replay, which gave them to us. For many brands such as Birkenstock, FinnComfort and Mephisto we only have estimates. Dr. Martens’ figures are also estimates, and that brand’s decline is now seemingly coming to an end.