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Caleres had record profits last year. What about 2022?

Updated: Dec 29, 2022

-Austin Huguelet, Mar 21, 2022

CLAYTON — Shoe seller Caleres bounced back from a pandemic slump with its most profitable year in decades last year. Executives say 2022 could be even better.

They told investors in the past week they could improve on last year’s all-time high sales, and beat 2021’s record per-share earnings by as much as 13%, which would nearly double their pre-pandemic peak.

“We have seen a step change in the earnings power of the organization,” said CEO Diane Sullivan.

It’s a new look for the old Brown Shoe Co., which long struggled to grow the bottom line. But investments in online sales and key brands helped it survive and thrive on pandemic footwear trends, and analysts say they’re in the right place to ride the next wave. And at least for now, the economy is working with them: Supply-chain issues have allowed retailers to pare back discounts and make more money on their sales, and Sullivan says she thinks that’s here to stay.

A little over a decade ago, Caleres, which rebranded in 2015, was still recovering from the Great Recession.

But the lean years brought in new leadership with a new strategy: The company axed struggling brands, shuttered underperforming stores, and put a renewed focus on bestsellers. As numbers improved, the company invested in new distribution centers and logistics and brought in new talent to grow the online business. “We could see that we were going to have to be shipping directly to consumers,” Sullivan, the CEO, said in an interview Friday.

The pandemic threatened to throw a big wrench in the plan. The company laid off hundreds at its Clayton headquarters and wrote off a tenth of its assets. It lost more in the first quarter of 2020 than it made in the previous five years combined.

Then investments in logistics started paying off: Online sales jumped 40% as unprecedented government stimulus surged through the economy. People started seeking out more comfortable shoes for hanging around the house and more athletic shoes for getting outside — Famous Footwear wheelhouses. Nikes and Birkenstocks flew off the shelves.

Last year was even better: Even as people returned to stores, a good portion of the online gains stuck. Shortages in inventory driven by supply-chain snags allowed Caleres to ditch the usual buy-one, get-one promotions, juicing profits amid extraordinary consumer demand. The final tally for the year was $137 million, or $3.55 per share, the company said Tuesday.

Sullivan said the good times have staying power: Sales at Famous Footwear are holding steady as people continue to snap up running shoes and Crocs. And with more people heading back to the office and social events as the pandemic recedes, dress shoe brands hurt by the pandemic — Allen Edmonds, Sam Edelman and Naturalizer — could hit their stride.

Analysts found much of the story compelling. A lot of people heading back to the office might look at their old shoes and want an upgrade, said Jason Long, founder of local consulting firm Eye on Retail.

Burt Flickinger III, who leads the Strategic Resource Group consultancy, said there will also be a crush of weddings, rehearsal dinners, christenings and some of the first graduations in three years. “They’re going to need more shoes for that,” he said.

Americans have also gained weight during the pandemic. They’ll want running shoes to get back into shape and comfortable shoes in the meantime, Flickinger said.

The big question is whether Caleres will be able to keep selling shoes without resorting to the old discounting strategy.

Sullivan thinks it will. Stores have slimmed offerings to focus on bestsellers. And after the last two years, she doubts anyone in footwear wants big markdowns back.

Long, the St. Louis consultant, said that dynamic could hold, at least for a while. Given all the news of supply chain shortages and inflation, people aren’t looking for discounts as much, he said.

But Flickinger dismissed the idea. Inflation is already getting to be too much for consumers, he said, and shoe companies like Caleres will be forced to adjust.

“Their prices are going to have to come down,” he said. “Or the consumer is going to radically shift to places with better prices.”


Strategic Resource Group is the lead retail and brand CPG consulting firm throughout the United States and the globe. With more than three decades of experience, our team strategically collaborates with top retail chains, wholesalers, suppliers, and investment firms. Our retail industry experts are highly skilled at illuminating retail trends, identifying opportunities to increase consumption, and growing retail sales.

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