Famous Footwear 2012 Annual Report Download - page 10

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8 2012 BROWN SHOE COMPANY, INC. FORM 10-K
PART I
ITEM 1 BUSINESS
Brown Shoe Company, Inc., founded in 1878 and incorporated in 1913, is a global footwear retailer and wholesaler. Current
activities include the operation of retail shoe stores and e-commerce websites as well as the design, sourcing and marketing
of footwear for women and men. Our mission is to inspire people to feel good and live better...feet first! We are a global
footwear company with annual net sales of $2.6 billion that puts consumers and their needs first, by targeting family, healthy
living and contemporary fashion platforms. Our business is seasonal in nature due to consumer spending patterns, with
higher back-to-school and Christmas and Easter holiday season sales. Traditionally, the third fiscal quarter accounts for a
substantial portion of our earnings for the year.
Our accounting period is based upon a traditional retail calendar, which ends on the Saturday nearest January 31. Periodically,
this results in a fiscal year that includes 53 weeks. Our 2012 fiscal year included 53 weeks, while both our 2011 and 2010 fiscal
years had only 52 weeks. The dierence in the number of weeks included in our fiscal years can aect annual comparisons.
During 2012, categories of our consolidated net sales were approximately 62% women’s footwear, 24% men’s footwear,
10% children’s footwear and 4% accessories. This composition has remained relatively constant over the past few years.
Approximately 67% of 2012 footwear sales represented retail sales, including sales through our e-commerce websites,
compared to 66% in 2011 and 70% in 2010, and the remaining 33%, 34% and 30% in the respective years represented
wholesale sales. See Note 7 to the consolidated financial statements for additional information regarding our business
segments and financial information by geographic area.
We had approximately 14,100 full-time and part-time employees as of February 2, 2013. In the United States, there are no
employees subject to union contracts. In Canada, we employ approximately 20 warehousing employees under a union
contract, which expires in October 2013.
RETAIL OPERATIONS
Our retail operations at February 2, 2013, included 1,277 retail shoe stores in the United States, Canada, China and Guam.
The number of our retail footwear stores at the end of each of the last three fiscal years was as follows:
2012 2011 2010
Famous Footwear . . . . . . . . . . . . . . . . . . . . . . . . . . 1,055 1,089 1,1 10
Specialty Retail. . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 234 259
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,277 1,323 1,369
During 2012, Famous Footwear opened 55 stores and closed 89 stores. During 2012, Specialty Retail opened 29 stores and
closed 41 stores.
With many companies operating retail shoe stores and shoe departments, we compete in a highly fragmented market.
Competitors include local, regional and national shoe store chains, department stores, discount stores, mass merchandisers,
numerous independent retail operators of various sizes and internet retailers. Quality of products and services, store
location, trend-right merchandise selection and availability of brands, pricing, advertising and consumer service are all
factors that impact retail competition.
Famous Footwear
Our family platform includes Famous Footwear, which is one of America’s leading family branded footwear retailers based
on 1,055 stores at the end of 2012, net sales of $1.5 billion in 2012 and published information on our direct competitors. Our
target consumers are women who buy brand-name fashionable shoes at a value for themselves and their families. In addition
to our retail footwear stores, we operate Famous.com. Our omni-channel strategy provides our customer numerous shopping
experiences, access to a wider range of products and a variety of delivery options.
Famous Footwear stores feature a wide selection of brand-name, athletic, casual and dress shoes for the entire family.
Brands carried include, among others, Nike, Skechers, New Balance, Converse, adidas, DC, LifeStride, Reebok, Sperry, Asics,
Puma, Dr. Scholl’s Shoes, Vans, BOC by Born, Sof Sole, Fergalicious and Bearpaw. We work closely with our vendors to
provide our consumers with fresh product and, in some cases, product exclusively designed for and available only in our
stores. Famous Footwear’s average retail price is approximately $39 for footwear with retail price points typically ranging
from $22 for shoes up to $120 for boots.
Famous Footwear sells various Brown Shoe Company owned and licensed products. Such products are sold to Famous
Footwear by our Wholesale Operations segment at a profit and represent approximately 14% of Famous Footwear net sales.