Famous Footwear 2002 Annual Report Download - page 4

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ITEM 1 - BUSINESS (Continued)
A summary of retail footwear stores operated by the Company at each of the prior three fiscal year-ends follows:
2001 2000 1999
Famous Footwear
Family footwear stores which feature a wide selection of brand-name, value-
priced footwear; located in shopping centers and outlet and regional malls in
the U.S. 920 925 867
Naturalizer
Stores selling the Naturalizer brand of women's footwear; located in regional
malls, shopping centers and outlet malls in the U.S. and Canada. 440 465 470
F. X. LaSalle
Stores selling women's and men's better-grade branded footwear in major
malls in Canada. 16 16 16
Total 1,376
1,406
1,353
E-Commerce
In late 2000, the Company purchased a majority interest in Shoes.com, Inc., an existing e-tailing company. Using the Company's
existing inventory, distribution network and information systems, the Shoes.com site was relaunched as a multi-brand footwear site in
Spring 2001. In addition, a FamousFootwear.com site was launched at the same time, which operates as a Famous Footwear e-tailing store.
These sites offer footwear and accessories to men, women and children that are purchased from outside suppliers and certain merchandise
that is sold in Famous Footwear stores.
The Company also operates an e-tailing site, Naturalizer.com, which offers substantially the same product selection to consumers as
the Company's domestic Naturalizer retail stores. This site functions as a retail outlet for the online consumer and serves as another brand
building vehicle for Naturalizer.
Wholesale Operations
The Company's Wholesale operation designs and markets branded, licensed and private label dress, casual and athletic footwear for
women, men and children at a variety of price points to approximately 2,200 retailers, including department stores, mass merchandisers,
chains and independent retailers throughout the United States and Canada. The division is a resource for many of the nation's largest
retailers, including Wal-Mart, Payless ShoeSource, The May Company, Federated, Dillard's, Nordstrom, Saks, Target, Sears and Famous
Footwear, as well as The Bay, Sears and Wal-Mart in Canada. The vast majority of the division's customers also sell shoes bought from
competing footwear suppliers.
6
ITEM 1 - BUSINESS (Continued)
In fiscal 2001 the division provided its customers with approximately 67 million pairs of shoes. Substantially all of this footwear was
imported through the Company's International division, except for those pairs produced at two company-owned manufacturing facilities in
Canada.
Wholesale orders for shoes are solicited by the Company's sales force throughout the year. The sales force is generally responsible for
managing the Company's relationships with its wholesale customers. Orders placed as a result of these sales efforts are taken before the
shoes are sourced with delivery generally within three to four months thereafter. Footwear is sold to wholesale customers on both a first-cost
and landed basis. First-cost sales are those in which the Company obtains title to footwear from its overseas suppliers and typically
relinquishes title to customers at a designated overseas port. Landed sales are those in which the Company obtains title to the footwear from
its overseas suppliers and maintains title until the footwear is inside the United States borders. Certain high-volume styles, particularly in
the Naturalizer and LifeStride lines, are inventoried to allow prompt shipment on reorders.
In addition to orders placed through the Company's sales force, the Wholesale division provides its retail customers the ability to directly
check inventory of all wholesale product in Brown Shoe's distribution centers, place orders, and track expected product arrivals over its
Internet site. Over 800 retailers utilize this e-commerce tool. In addition, the Company also provides these retailers with its "E-direct" system
that allows them to sell out-of-stock product, with Brown Shoe Company then shipping the product directly to the consumer's home.
Major brand names owned by the Company include Naturalizer, LifeStride, Buster Brown, Airstep, Connie and Brown Shoe. Each of
the Company's brands is targeted to a specific customer segment representing different styles and taste levels at different price points.