'Worn Out' Shoemakers Still Have a Chance to Heal
Rockport is the latest shoe-related company to enter bankruptcy court.

More than half a dozen U.S. footwear retailers and manufacturers filed for bankruptcy in the past 14 months as they struggled to attract traffic to their physical stores, but brick-and-motor shoe sellers still have a chance to turn around their business, according to retail experts.

Rockport Group LLC is the latest shoe-related company to enter bankruptcy court, filing on May 14. It follows other shoemakers and specialty retailers Nine West Holdings Inc., Walking Co., Pinktoe Tarantula Ltd, Shiekh Shoes LLC, Aerosoles Inc. and Payless ShoeSource Inc., which filed in April 2017.

"The footwear retailers' bankruptcy filings reflect a general trend in the retail industry where many retailers have had tremendous challenges and some have been forced out of businesses," said Jie Zhang, professor of retail management at Robert H. Smith School of Business at the University of Maryland.

Annual sales at shoe stores declined 1.5 percent in the United States in 2017 despite a 1.3 percent increase in consumer spending on footwear last year, according to data from the U.S. Census Bureau and Bureau of Economic Analysis.

"Store-based footwear retailers are having a particularly difficult time, as more consumers are switching their purchases from online stores and discount retailers," Zhang said. She explained that online platforms, such as Amazon, and big-box stores, like TJ Maxx, are able to offer a broad assortment at lower prices than traditional shoe sellers.

The comfort footwear maker, which runs Rockport, Aravon and Dunham brands, filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code on May 14. Rockport's Chief Financial Officer Paul Kosturos stated in court filings that the company's bankruptcy reorganization was a result of "a costly and time-consuming separation" from former owner Adidas Networks, as well as supply-chain interruptions and a contract dispute with its primary logistic provider.

Changes in ownership and management in the past 15 years created instability in Rockport's business, said analyst Beth Goldstein at The NPD Group, a consumer tracking service. Goldstein added that bankrupt shoemaker Rockport has a chance to rebound as the sport leisure market continues to grow and outperforms fashion retailers.

There is a "shift in consumer preferences for footwear based on the casualization of fashion," said Goldstein, "If the brand plays up its heritage, as well as focus on comfort and innovation, all aspects that are important to consumers today, it could very likely see a turnaround."

Along with the bankruptcy filing, Rockport agreed to sell Charlesbank all of the comfort shoemaker's global assets in Asia and Europe, and plans to close its North American retail stores. The transaction will continue Rockport's "deep heritage and great brands" and help the company "be better positioned in today's evolving retail landscape" by focusing on its global wholesale, independent and e-commerce operations, according to Rockport's announcement.

Pamela Danziger, founder of Unity Marketing, a Pennsylvania-based consumer-insight research company, cautioned, however, that sticking to casual fashion cannot guarantee a reorganized Rockport will increase consumer sales at its storefronts. "Just being a comfort brand isn't enough anymore," said Danziger, "Americans have too much stuff already and American retailers have been filling their stores with more stuff that people can't justify buying."

"Buying shoes is so easy," explained Catherine Jai, retail management professor at Texas Tech University, that "now consumers may want more." She added that customers now "want fewer products with higher quality" and start to think "what kind of apparel or footwear can help them to maintain a healthy, sustainable lifestyle."

With the impact of online shoe-shopping platforms and big-box stores, a key lesson for footwear companies is to provide trendy, qualified and innovative shoes, according to Jai.

"If you don't have a good product that your target market will appreciate, no matter how many outlets you have your product in, that is not going to help," she explained.

This article was written by Xinyi (Ethel) Jiang, a reporter at Medill News Service in Washington D.C. She reports on technology and international trade. The Medill News Service is part of Northwestern University.

More from Lifestyle

Is This the Summer of Spiked Seltzer?

Is This the Summer of Spiked Seltzer?

Amazon Prime Day 2018: When Is It and What Should You Know?

Amazon Prime Day 2018: When Is It and What Should You Know?

This Could Be the Summer of Hard Seltzer

This Could Be the Summer of Hard Seltzer

What Is Business Casual Attire?

What Is Business Casual Attire?

Can Legal Cannabis Help Slow the Opioid Drug Epidemic in the U.S.?

Can Legal Cannabis Help Slow the Opioid Drug Epidemic in the U.S.?