Exploring the female side

Facts and figures show that the market for girls’ fashion athletic shoes is oversaturated. The keys to success in that market are a well-designed pricing strategy and product differentiation, according to executives. Footwear Market Insights figures show that competition in the girls’ market is fierce, with discounters accounting for over 39% of girls’ shoe sales in 1995.

Somewhere between Nike’s high-tech domain and Wal-Mart’s $3.99 canvas shoe lies a fashion athletic shoe market for girls. While some say this niche is showing strong sales, the facts and figures reveal an oversaturated market. So what can manufacturers do for an encore?

In the past, the untapped potential in this niche market has lured a number of manufacturers into the fold. Now the question is, how is this increasingly competitive and crowded category evolving as the major players scramble to hit girls with hybrid athletic styles?

Executives say the young women’s athletic market calls for product differentiation as well as well-defined pricing strategies – under $25 seems to be the magic number. According to Footwear Market Insights, Nashville, the average (regular, not sale priced) price of a pair of girls’ dress shoes for plantar fasciitis is $20.

The competition at retail is fierce, with a huge chunk of the business – over 39 percent of the total pairs of (all types) girls’ shoes purchased in 1995 – sold by discounters, according to FMI. Mike Kormos, president of FMI, noted that many kids have been bombarded with athletic shoes since the ’80s. And while the category has received more attention of late from vendors, sales have eroded since 1990. In 1995, athletic shoes made up 45.4 percent of the total pairs sold, according to FMI, but that number has dropped steadily since five years prior when athletic shoes totaled 51.4 percent of total pairs sold for the period. The sales decline has forced many players to develop new hybrid lines for girls. While style changes, such as rubber soles in wedge shapes, high heels and mule looks, may have spruced up the active casual market, they do not replace those dress shoes for bunions made for sports. It’s a tricky market, with the infringing active-shoe market giving the athletics market a run for its money.

As a result, a number of executives said that athletics with basic styling are what’s selling best for girls. At Guess Athletic, Sylmar, Calif., clean, fashion-forward styles have been the star performers, even for little girls ages 4-10, according to Randi Berger, marketing director. The company is presently trying to expand its distribution outside of its existing independent, sporting goods and mid-tier department store base to more upscale stores including the likes of Federated, said to Berger. But despite successes, she said there is a serious challenge in this saturated market to figure out what styles work for each type of store.

“We go up against Vans, Skechers… Where we are it’s a saturated market. It’s always a challenge to find innovative and different product,” noted Berger. Guess Athletic has found the most success with its active-casual category: shoes designed for activities, but without high-performance features. While she realizes “we’re not competing with the Nike and Asics, high-performance customer,” she said, the company does sport-specific shoes for walking, jogging and crosstraining, which are targeted for young women ages 12 and up.

What Guess Athletic and others contend with are constant shifts in supply and demand. While they will never rival Nike or Reebok’s market share, a number of clever niche players could grab a small bite of the fashion athletics pie. Rebels, Los Angeles, for example, introduced two fashion athletic styles for spring, the company’s first step into this category. Priced around $22.50 wholesale, the rubber-bottomed, suede or fabric-upper shoes for high instep are targeted towards department stores and boutiques.

“We introduced the kids’ styles because we were doing well on the women’s level,” said Kellee McCormack, co-owner.

Then there’s the important upscale casual athletics niche – exemplified by Italian import Superga, shown by Foreign Invasions, New York – that can be found in better specialty stores such as Barney’s, and independents such as Little Eric. And another section of the girls’ market, Oshkosh B’Gosh, Oshkosh, Wis., does well based on the strong brand recognition factor. At Oshkosh, as with Guess Athletic, basics perform the best at retail. Jennifer May, product manager, said the company has two categories – a basic, lower-priced group, and a more elaborately patterned higher-priced category. The number one athletic shoe in the lower-priced category is a basic leather lace-to-toe at an entry level price point of $12.50. The best seller last fall in the higher price range was a girls’ leather high-top athletic wholesaling for $17.75.

Like many other vendors, May said the OshKosh athletic category is not yet fully established and sales have been flat so far this year “The whole category is tough,” she said. “Either someone is marketing a gimmick that is unisex, so you have that choice, or they are doing something very feminine. We’ve chosen to do something specifically for girls.”

But despite the challenges, many remain optimistic. At L.A. Gear; the girls fashion athletic business is growing, in both specialty athletic and department store channels, said Jim Moodhe, vice president design, marketing and development. He therefore doesn’t feel the market is saturated, and said L.A. Gear will continue tooput emphasis on product specifically designed for young girls.

“The market is so wide open for girls’ athletics,” said Glenn Spencer, who heads up the Esprit kids division at Vida Shoes, New York Another niche player with potential for capitalizing on its recognizable brand, Esprit has bumped up the classic flower-embroidery idea by using vivid color combinations and touches like zigzag stitching and patent

While girls often buy shoes designed for boys, Esprit hopes to use its girl-specific designs and sizing as its bargaining chip. “Sam & Libby is delivering. And Reebok and Nike are moving into it, but they are more function over fashion,” said Spencer. There’s a tremendous opportunity for the mainline retailer to get into this business and get some of the thunder from it”.

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