Famous Footwear 2013 Annual Report Download - page 15

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2013 BROWN SHOE COMPANY, INC. FORM 10-K 13
Brown Shoe Company Sourcing and Product Development Operations
Brown Shoe Company sourcing and product development operations source and develop footwear for our Wholesale
Operations and Specialty Retail segments and also a portion of the footwear sold by our Famous Footwear segment.
We have sourcing and product development oces in China, Hong Kong, Italy, Macau, St. Louis, and New York.
Sourcing Operations
In 2013, the sourcing operations sourced approximately 47 million pairs of shoes through a global network of third-party
independent footwear manufacturers. The majority of our footwear sourced is provided by approximately 49 manufacturers
operating approximately 61 manufacturing facilities.
In certain countries, we use agents to facilitate and manage the development, production, and shipment of product.
We attribute our ability to achieve consistent quality, competitive prices, and on-time delivery to the breadth of these
established relationships. While we generally do not have significant contractual commitments with our suppliers, we do
enter into sourcing agreements with certain independent sourcing agents.
Prior to production, we monitor the quality of all of our footwear components and also inspect the prototypes of each
footwear style. We have leading lab testing facilities in our Dongguan, China oce, which provide high quality footwear
for our consumers. We also perform random quality control checks during production and before any footwear leaves the
manufacturing facilities.
In 2013, approximately 91% of the footwear we sourced was from manufacturing facilities in China. The following table
provides an overview of our foreign sourcing in 2013:
Country Millions of Pairs
China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.3
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.5
Product Development Operations
In our Dongguan, China oce, we operate a total of two sample-making facilities. By operating these facilities, we have
greater control over our product development in terms of accuracy, execution, and time to market.
We maintain design teams for our brands in St. Louis, New York, and China as well as other select fashion locations, including
Italy. These teams, which include independent designers, are responsible for the creation and development of new product
styles. Our designers monitor trends in apparel and footwear fashion and work closely with retailers to identify consumer
footwear preferences. Our design teams create collections of footwear and work closely with our product development and
sourcing oces to convert our designs into new footwear styles.
Our long range plans include further expansion into new markets outside of China, developing more progressive processes to
improve factory capacity and material planning, and continuing to understand ways to drive excellence in product value and
execution in a rapidly changing manufacturing landscape.
Backlog
At February 1, 2014, our Wholesale Operations segment had a backlog of unfilled orders of approximately $273.9 million
compared to $274.9 million on February 2, 2013. 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 any
particular time is aected by a number of factors, including seasonality, the continuing trend among customers to reduce
the lead time on their orders, and capacity shifts in China. Accordingly, a comparison of backlog from period to period is
not necessarily meaningful and may not be indicative of eventual actual shipments or the growth rate of sales from one
period to the next.
AVAILABLE INFORMATION
Our internet address is www.brownshoe.com. Our internet address is included in this annual report on Form 10-K as an
inactive textual reference only. The information contained on our website is not incorporated by reference into this annual
report on Form 10-K and should not be considered part of this report. We file annual, quarterly and current reports, proxy
statements, and other information with the Securities and Exchange Commission (“SEC”). We make available free of charge
our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports filed or furnished, as required by Section 13(a) or 15(d) of the Securities Exchange Act of 1934, through our internet
website as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC. You may
access these SEC filings via the hyperlink to a third-party SEC filings website that we provide on our website.