Famous Footwear 2014 Annual Report Download - page 13

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12 2014 BROWN SHOE COMPANY, INC. FORM 10-K
In connection with our omni-channel approach to reach consumers, we also operate Naturalizer.com, Naturalizer.ca,
SamEdelman.com, and DrSchollsShoes.com, which oer substantially the same product selection to consumers as is
sold in their respective retail stores. Additional websites such as Ryka.com, LifeStride.com, ViaSpiga.com, Vince.com,
CarlosShoes.com and FergieShoes.com serve as additional brand-building channels for us.
References to our website addresses do not constitute incorporation by reference of the information contained on the
websites and the information contained on the websites is not part of this report.
Marketing
We continue to build on the recognition of our portfolio of brands to create dierentiation and consumer loyalty.
Marketing teams are responsible for the development and implementation of marketing programs for each brand, both
for us and for our retail partners. In 2014, we spent approximately $22.3 million in advertising and marketing support for
our Brand Portfolio segment, including print, consumer media advertising, production, tradeshows, digital marketing and
social media, public relations and in-store displays and fixtures. The marketing teams are also responsible for driving the
development of branding and content for our brand websites. We continually focus on enhancing the eectiveness of
these marketing eorts through market research, product development and marketing communications that collectively
address the ever-changing lives and needs of our consumers. In 2014, the marketing teams were instrumental in the
development and execution of new product launches, including branding, positioning and marketing to both the
consumer and trade audiences.
Sourcing and Product Development Operations
Our sourcing and product development operations source and develop footwear for our Brand Portfolio segment 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, Vietnam, Italy, Macau, Ethiopia, St. Louis and New York.
Sourcing Operations
In 2014, the sourcing operations sourced approximately 48 million pairs of shoes through a global network of third-
party independent footwear manufacturers. The majority of our footwear sourced is provided by approximately
35 manufacturers operating approximately 56 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 and
Putian, China oces, and we also perform random quality control checks during production and before any footwear
leaves the manufacturing facilities.
In 2014, approximately 85% of the footwear we sourced was from manufacturing facilities in China. The following table
provides an overview of our foreign sourcing in 2014:
Country Millions of Pairs
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.3
Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5
Product Development Operations
In our Dongguan, China oce, we operate a sample-making facility that allows us to 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.