Shoes Help Luxury Retailers Step Up Their Sales

When Chanel decided to revamp some of its U.S. stores this year, it made a bold choice: One of its Hawaii boutiques would be dedicated entirely to shoes.

With the new Honolulu boutique, which features $1,460 sandals adorned with pearls and $750 ballerina flats, the French maison whose sales dropped 17% last year hopes to perk up demand not only for shoes, but for its clothes, bags and cosmetics.

Chanel’s focus on shoes is part of a new push by luxury houses looking for ways to combat a slump in high-end fashion. The slowdown in China—for years a major driver of luxury—along with terrorist attacks in Europe, Russia’s economic crisis and a grueling U.S. election season—means that 2016 likely will be the first year to see a decline in luxury purchases since 2009, according to consultancy Bain & Co. The fall is expected to be nearly 1% after a 12% year-over-year rise in 2015.
Shoes, however, remain a bright spot, with footwear expected to grow 5% annually in the next five years, outpacing other high-end categories, according to Bernstein forecasts. Shoes make up about 6% of the luxury market.
Gucci gave footwear a more prominent position during a recent revamp of its boutiques around the world. In Milan, the company set up its shoe display near the store’s entrance.

Bottega Veneta found that the predominance of its iconic woven intrecciato bags in its shops appeared to be boring shoppers. So the Italian brand diversified its lineup by expanding its shoe offerings in a fifth of its 250 stores world-wide. In many boutiques, the company created footwear sections for the first time. As a result, shoe sales grew in the double digits in the first half of the year, compared with an overall sales decline of 9% at the house.

Shoes are “a strong lever to diversify and rebalance the brand,” says Jean-Marc Duplaix, chief financial officer at Kering SA, Bottega Veneta’s parent company.

Shoes’ lower price point is attractive in a market where aspirational and accessible luxury products are growing the fastest. According to Bain, accessible products represent 40% of all luxury purchases, up 2 percentage points in the past year.

Ambra Cerri, a 31-year-old Milan resident, bought two pair of Moschino shoes this year, each costing about €500 (about $523), a €700 pair of boots by Italian brand Pollini and two pairs of shoes by Calvin Klein. Meanwhile, she purchased just one bag, a Dolce & Gabbana piece for €1,400.

“You can find shoes even at €450, while a nice bag costs over €1,000,” said Ms. Cerri. But even at a lower price point, shoes “give you the idea that you’re really spoiling yourself.”

Brands also are seizing on consumers’ desire for high-end sneakers and custom-made or personalized shoes. Gucci, for instance, extended its customization services—already available for bags—to sneakers, which sell for €500. Customers can have their initials embroidered on the side of the sneakers, on top of the brand’s signature red-and-green striping. They also can choose between a gold or silver horse-bit—another Gucci emblem—on certain models of the house’s mules.

Online luxury retailing—now a big focus for the industry—is an ideal fit for shoes, which are easier to sell online, in part because the sizing is less onerous than for clothing.

Moreover, luxury executives contend that internet shopping facilitates the sale of what often is an impulse purchase for many women. According to Bain, online sales make up about 15% of total shoe purchases globally, compared with an 8% stake for total luxury-goods sales.

During the weekend following Thanksgiving this year, sales of shoes via Yoox-Net-A-Porter’s platform more than doubled compared with the previous year. And the company expects that pace to continue in the coming months, says Lea Cranfield, the company’s merchandising director.

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