Famous Footwear 2004 Annual Report Download - page 8

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Table of Contents
BROWN SHOE COMPANY, INC. 2003 FORM 10-K
both in the United States and Canada. This footwear is primarily distributed through mass merchandisers. We also sell the Original
Dr. Scholl’s Exercise Sandal and a related line of footwear under this license to department stores, national chains and independent retailers.
In 2001, our Wholesale division launched a collection of women’s shoes — Carlos by Carlos Santana — to major department stores. This
footwear is being marketed under a license agreement with guitarist Carlos Santana, which is renewable through December 2006. This
product represents our most fashion-forward line and is distributed in approximately 330 department store doors and 300 specialty stores.
We also have a license agreement, which is renewable through December 2009, for the HOT KISS label for junior footwear to complement
the apparel line with the same name. This line is sold in several department stores and Famous Footwear.
In February 2004, we entered into an exclusive three-year license agreement, which is renewable through 2013, to design, source and
market men’s, women’s and children’s footwear at wholesale under the Bass brand. We expect the license agreement to expand our
footwear brand portfolio, greatly strengthen our offering in branded men’s footwear and provide an entry into the casual and outdoor
categories.
We continue to build on and take advantage of the heritage and consumer recognition of our traditional brands. Marketing teams are
responsible for the development and implementation of marketing programs for each brand, both for us and for our retail customers. In
fiscal 2003, we spent approximately $16 million in advertising and marketing support primarily for our Naturalizer and LifeStride brands,
primarily through cooperative advertising with our wholesale customers. We continually focus on enhancing the effectiveness of these
marketing efforts through market research, product development and marketing communications.
At February 28, 2004, our wholesale operations had a backlog of unfilled orders of approximately $166 million, including approximately
$16 million from the recently acquired Bass license, compared to $135 million on March 1, 2003. Most orders are for delivery within the next
90 to 120 days, and although orders are subject to cancellation, we have not experienced significant cancellations in the past. The backlog at a
particular time is affected by a number of factors, including seasonality, the continuing trend among customers to reduce the lead time on
their orders and, in some cases, the timing of licensed product movie releases. Accordingly, a comparison of backlog from period to period is
not necessarily meaningful and may not be indicative of eventual actual shipments.
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