Famous Footwear 2013 Annual Report Download - page 10

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8 2013 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 $2.5 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. Both our 2013 and 2011 fiscal years had 52 weeks, while our 2012 fiscal
year included 53 weeks. The dierence in the number of weeks included in our fiscal years can aect annual comparisons.
During 2013, categories of our consolidated net sales were approximately 63% women’s footwear, 23% men’s footwear,
9% children’s footwear, and 5% accessories. This composition has remained relatively constant over the past few years.
Approximately 70% of footwear sales in 2013 represented retail sales, including sales through our e-commerce websites,
compared to 71% in 2012 and 70% in 2011, while the remaining 30%, 29%, 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 11,200 full-time and part-time employees as of February 1, 2014. 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 2016.
RETAIL OPERATIONS
Our retail operations at February 1, 2014 included 1,223 retail shoe stores in the United States, Canada, and Guam.
The number of our retail footwear stores at the end of each of the last three fiscal years was as follows:
2013 2012 2011
Famous Footwear . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044 1,055 1,089
Specialty Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 222 234
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,223 1,277 1,323
During 2013, Famous Footwear opened 51 stores and closed 62 stores. During 2013, Specialty Retail opened 11 stores and
closed 54 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 1,044 stores at the end of 2013, net sales of $1.5 billion in 2013, 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 consumer
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, Vans, Sperry, Asics, DC, BOC by Born,
Sof Sole, Bearpaw, and Steve Madden, as well as company-owned brands including, among others, LifeStride, Dr. Scholl’s,
Fergalicious, Naturalizer, and Carlos. 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 $40 for footwear with retail price points typically ranging from $22 for shoes up to $190 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.