Famous Footwear to Open More ‘Flair’ Concept Stores as Retailer Sees Sales Traction With Millennial Families
Caleres president and chief executive officer Jay Schmidt revealed new details on Tuesday about how the company’s “Flair” — which stands for “Famous Localized and Immersive Retail” — concept stores are working to improve sales and enhance consumer experience at its Famous Footwear retail banner.
According to Schmidt, who spoke on the company’s fourth-quarter conference call, the company opened 21 Flair stores during the period.
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“The second wave of Flair stores have proven highly successful and are outperforming the chain, and delivered positive year-over-year comps in the fourth quarter,” he said. “We plan to continue to refine our approach to improving consumer experience to ensure we are realizing the highest return on this investment.”
The CEO added that Famous Footwear will transform an additional 23 stores to the Flair concept in 2024, with the goal of having 44 Flair stores by the end of this year.
The first Flair concept store was introduced in March 2022 and is characterized by oversized, immersive pinwheel displays that showcase new items, emerging trends, seasonal offerings or high demand brands and products. Other key design elements include a storefront with large backlit graphics, use of digital format signage throughout the store, fresh color treatments, an elevated kids’ area, modern lighting and elevated seating.
“We’ve tested in a variety of different centers and different configurations to determine which formula drove the highest impact,” Schmidt told FN on Wednesday. “We now have a blueprint for what works and have seen a 5 percent lift in the go-forward format.”
This enhanced rollout comes as Famous Footwear reported a total sales decline of 1.5 percent with comp sales down 5.9 percent in the fourth quarter. According to Schmidt, traffic was down in Q4 and seasonal products, namely boots, represented much of the sales decline in the period.
“Famous once again, though, outperformed its competitive set gaining market share in shoe chains,” the CEO said on Tuesday’s call. “During the holiday season, the consumer was motivated by highly demanded trend items instead of promotions. Robust selling on key athletic brands and styles and cozy products like slippers drove a modestly better sales trend during the 7-week holiday period.”
Famous Footwear’s kids’ business was a highlight in the quarter, up 2 percent year-over-year in sales and up 1.4 points in market share amongst shoe chains. “As you know, we view kids as our key differentiator and the entry point for the millennial family,” Schmidt told analysts. “Our kids’ business has outpaced the rest of the chain for 12 consecutive quarters, and 2023 marked our highest level of annual kids’ sales ever.”
Looking ahead, Schmidt added that the company plans to build on its leadership position in kids’ shoes while continuing to focus on evolving its Flair store format. “Our target consumer, the millennial family continues to prioritize kids’,” the CEO said. “We are seeing a slightly better [sales] trend as we move from February into March, and that gives us some sign for optimism, but obviously very early on in the quarter.”
On Tuesday, the St. Louis-based company reported fourth quarter sales of $697.1 million, up 0.1 percent from the prior year. Adjusted net earnings were $30.8 million for the quarter, with adjusted earnings per diluted share of 86 cent.
Caleres’ net sales were down 5.1 percent to $2.82 billion, in line with the company’s prior guidance. Adjusted net earnings were $149.3 million, with adjusted earnings per diluted share of $4.18, ahead of its guidance range.
Looking ahead, Caleres expects net sales for fiscal year 2024 to be between flat and up 2 percent, compared to the prior year. Earnings per diluted share is expected to be between $4.30 and $4.60. For the first quarter, Caleres expects consolidated net sales to be between flat and up 1 percent, with earnings per diluted share in line with Q4 on an adjusted basis.
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