By Sara Germano
Skechers USA Inc., the casual footwear brand that was tripped up
by its line of supposedly butt-firming shoes with curved soles, is
now outpacing traditional athletic shoe companies at their own
race.
For the quarter ended in March, Skechers accounted for 5% of the
sports footwear market, according to retail tracker NPD Group,
squeaking past Adidas AG's 4.6% as well as the 4% shares notched by
Asics and New Balance.
No one is anywhere near Nike Inc. and its proprietary Jordan
brand, which together account for 62% of athletic shoes sold in the
U.S. But Skechers's rise highlights Americans' growing preference
for cheaper shoes they may actually never use for running and the
threat that trend poses to some established athletic brands.
Most of Skechers's growth has come from its walking and casual
footwear segments, according to NPD Group analyst Matt Powell.
"Walking has been relatively dormant for a number of years, and
they've kind of reignited it," he said.
The Manhattan Beach, Calif.-based company is the latest
beneficiary of the so-called athleisure trend sweeping retail, with
shoppers increasingly snapping up sport-styled clothes and shoes
regardless of whether they plan to work out in them. By offering
stylish, casual shoes at a fraction of the price of more
traditional athletic brands, Skechers has gained a foothold with
family footwear and department store consumers.
David Weinberg, the company's chief operating officer, said
retailers' demand for Skechers has been strong, with the company
adding new accounts and expanding shelf space at existing
customers.
Retail unit sales of Skechers shoes rose 19% during the first
quarter, compared with 10% for Nike, according to SportsOneSource.
"They're not a poseur, they're a player," said Neil Schwartz, vice
president of business development for the market research firm.
After dipping earlier this decade, Skechers's sales have resumed
their growth, climbing 29% last year to $2.4 billion. Its shares
are trading around a record, up 1.3% Monday afternoon at
$102.05.
Running is the largest U.S. athletic footwear category by retail
sales, according to SportsOneSource. For the first time, sales of
fashion-focused casual shoes are driving sales instead of the more
sophisticated running shoes that long propelled the category,
according to the firm.
Traditional athletic footwear companies are shuffling their
assortments to cater to the casual crowd. Nike already has a best
seller in its Roshe sneaker, which isn't designed for running.
Technical brand Brooks Running, a subsidiary of Berkshire Hathaway,
last year introduced a line of retro-styled shoes from the
1970s.
Skechers, meanwhile, has been boosting its credibility as an
athletic brand. The company launched a performance line for serious
athletes in 2011. And when Meb Keflezighi last year became the
first American to win the Boston Marathon since 1985, he did it in
Skechers shoes.
Skechers made headlines in 2012 when it paid $40 million to the
Federal Trade Commission to settle false-advertising claims about
their Shape Ups shoes, which were touted to be butt-toning. The
company disputed any fault at the time.
The growth of Skechers's footwear business marks another
challenge for Germany-based Adidas. The world's second-largest
sportswear brand by revenue has slipped in various U.S. rankings.
Last year, Adidas fell behind Under Armour Inc. in combined U.S.
footwear and apparel retail sales, according to data from Sterne
Agee CRT and SportScanInfo.
Over the past year, the company has shuffled its American
management and redoubled its efforts to improve its business here.
Adidas reported a 7% increase in North American sales for the
quarter ended March 31.
Mr. Powell of NPD Group said that it appears Adidas has already
bottomed out in the U.S., and it's seeing some success with its ZX
Flux and Boost lines of footwear.
"My expectations are that the Adidas trends improve going into
the year, " he said. "Their retail numbers have improved. They're
still not good, but they're better than they were."
Write to Sara Germano at sara.germano@wsj.com
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