Famous Footwear 2013 Annual Report Download - page 14

12 2013 BROWN SHOE COMPANY, INC. FORM 10-K
Contemporary Fashion
Sam Edelman: Since its inception in 2004, designer Sam Edelman’s brand has quickly emerged as a favorite among
celebrities and fashionistas around the globe. Sam captures the imagination of women with on-trend styling and unique
materials. In 2012, the brand opened its flagship store in New York City and during 2014, the brand plans to expand its retail
presence with additional stores. Sam Edelman footwear is sold primarily through department stores, independent retailers,
and online at suggested retail price points starting at $65 for sandals, $90 for flats, $100 for heels, and $200 for boots.
In addition, we have license agreements to sell apparel and accessories under the Sam Edelman brand. The contemporary
apparel collection will consist of distinctive, fashion-forward tops, sweaters, bottoms, dresses and jackets with a similar
design aesthetic to Sam Edelman footwear and will launch to consumers in the fall of 2014. Sam Edelman held the No. 2
market share position in the bridge/designer zone within the women’s fashion footwear category across NPD tracked
point-of-sale channels at the end of 2013, according to The NPD Group/Retail Tracking Service.
Franco Sarto: The Franco Sarto brand has a loyal, career-focused consumer who is passionate about the brand’s modern
Italian-inspired style, fit, and quality. The brand is sold in major national chains, department stores, and independent retailers
at suggested retail price points from $79 for shoes to $225 for boots. Franco Sarto ranked No. 4 in market share position in
the better zone within the women’s fashion footwear category across NPD tracked point-of-sale channels at the end of 2013,
according to The NPD Group/Retail Tracking Service. We had a license agreement to sell Franco Sarto footwear that was to
expire in 2019. As further discussed in Note 19 to the consolidated financial statements, in February 2014, we purchased the
Franco Sarto trademarks for $65.0 million, terminating this license agreement.
Via Spiga: Via Spiga provides chic, sophisticated footwear for the cosmopolitan woman who wants to make a fashion
statement every day. The brand is primarily sold in the bridge/designer zone in premier department stores, upscale
boutiques, and online. This brand sells at suggested retail price points from $155 for shoes to $425 for boots. The brand
held the No. 7 market share position in the bridge/designer zone within the women’s fashion footwear category across
NPD tracked point-of-sale channels at the end of 2013, according to The NPD Group/Retail Tracking Service.
Fergie and Fergalicious by Fergie: We have created two namesake footwear lines in collaboration with entertainment
superstar Fergie (Stacy Ferguson) to fully capture the multifaceted aspects of Fergie’s life as an award-winning singer,
songwriter, and actress. Fergie footwear portrays the artist’s confident, individual style in a line of sophisticated, sexy
footwear with a glam rock influence. The brand launched in the spring of 2009 and is currently being sold at better
department stores, boutiques, independent retailers, and online at retail price points of $69 for shoes to $225 for boots.
Fergalicious by Fergie shoes have a fun, funky attitude inspired by her pop rock persona. Fergalicious by Fergie also
launched in the spring of 2009 and is available at Famous Footwear, Famous.com, and other national chains at retail
price points of $40 for shoes to $100 for boots. We have a license agreement with Krystal Ball Productions to sell
Fergie/Fergalicious footwear that expires in December 2014.
Carlos by Carlos Santana: The Carlos by Carlos Santana collection of women’s footwear is sold at major department
stores, national chains, our Famous Footwear stores, and online. Marketed under a license agreement with legendary
musician Carlos Santana, this brand targets trend-conscious consumers with hot, fashionable shoes inspired by the
passion and energy of Santana’s music. Suggested retail price points range from $89 for shoes to $225 for boots.
We have a license from Santana Tesoro, LLC to sell Carlos by Carlos Santana footwear that expires in December 2014
with extension options through 2020.
Vince: The Vince shoe collection launched in the fall of 2012 at premier department stores and upscale boutiques.
Vince delivers contemporary casual footwear that a sophisticated, modern woman wears eortlessly, serving as a
functional luxury basic for all her lifestyle needs. Suggested price points range from $150 for shoes to $595 for boots.
We have a license agreement with Kellwood Company to sell Vince footwear that expires in December 2015, with an
extension option through 2020. To expand the Vince shoe collection beyond women’s footwear, Vince men’s footwear
will launch to consumers in the second quarter of 2014.
Products sold under license agreements accounted for Wholesale Operations’ net sales of approximately 47% in 2013,
49% in 2012, and 38% in 2011. Brown Shoe Company also receives royalty revenues for licensing owned brands, including
brands listed above, to third parties.
Portfolio Realignment
During 2013, we substantially completed our portfolio realignment initiatives that began in 2011. These portfolio realignment
initiatives included selling the Avia, Nevados, and AND 1 brands acquired with American Sporting Goods Corporation;
exiting certain women’s specialty and private label brands; exiting the children’s wholesale business; the sale and closure
of sourcing and supply chain assets; closing two U.S. distribution centers; the termination of the Etienne Aigner license
agreement; the election not to renew the Vera Wang license in accordance with agreement terms; and other infrastructure
changes. Refer to Note 2 and Note 4 to the consolidated financial statements for further discussion.