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Shopping Centers Today -> March 2003
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TEEN SPIRIT
Despite shoe retailers’ bumpy ride, Journeys is on a roll
BY MAURA K. AMMENHEUSER
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Meriden, Conn. — Ten-year-old Sally Summers hit the mall recently wearing the retro, blue denim, thick-soled Vans sneakers with rainbow laces that she bought from Journeys. “It’s more skaterish there” (as in skateboards), she explained.
That’s probably not the exact language the Cromwell, Conn., preteen’s big sister, 17-year-old Annie, would use, but the older girl is as much of a Journeys fan. “I buy all my Vans there,” she said, showing off a worn, once-white pair. “They change color in the sun!”
Welcome to the place where teen-agers and shoe retailing meet. Journeys, a 519-store division of Nashville, Tenn.-based Genesco, caters to Generation Y’s (preteens to 20-somethings) footwear wants and whims. It carries fashion-conscious athletic, casual and semidressy shoes by such hot brands as Adidas, Candies, Diesel, Dr. Martens, Lugz, Puma and Timberland at teen-friendly prices (which, depending on sales, typically run $39 to $139). Music videos and a funky, colorful store design don’t hurt. Journeys also sells through a Web site that features electric-blue graphics; a promotion involving iPod, Apple’s hand-held digital music player; and help-wanted lines like, “Getting nagged to get a job?”
At about 1,200 square feet each, Journeys stores aren’t large, but they move plenty of merchandise. Together with its younger sibling, Journeys Kidz — 14 stores that offer similar styles, downsized for 8-to-12-year-olds — the chain racked up $381.7 million in sales in fiscal 2002, according to Genesco’s annual report. That was up 26.9 percent over 2001’s $300.7 million, which in turn was 39.7 percent more than the previous year’s $215.3 million. The numbers partly reflect expansion; in 2002 Genesco opened 108 Journeys stores. Still, same-store sales grew 6 percent. Journeys accounts for half of Genesco’s sales, which reached $746.8 million in 2002. (The company’s other chains are Jarman, Johnston & Murphy and Underground Station.)
Lee Peterson, a retail design consultant with WD Partners, Columbus, Ohio, who has worked with Keds, Stride Rite and Wolverine, estimated Journeys’ sales at $550 per square foot. (Genesco executives did not respond to requests for an interview.)
Journeys’ success comes during a bumpy time for shoe retailers generally. A few strong performers notwithstanding, “the shoe business as an industry is not in a very good position right now,” noted Joseph Tagliola, CLS, executive vice president of leasing for Westfield America, landlord to 43 Journeys and four Journeys Kidz stores.
ICSC research shows footwear sales per square foot rose 2.9 percent as recently as October, but fell 4 percent during the holiday season. Industry giant Foot Locker reported slight sales increases in fiscal 2001, as did West Nyack, N.Y.-based Footstar, though the latter saw same-store sales drop 2.2 percent. The Finish Line, Indianapolis, reported a $3.2 million loss for the quarter ended in November and a 1 percent dip in same-store sales for the period.
Journeys’ sales at Westfield centers were flat last year, Tagliola said, but “versus the rest of the [retail] industry, that’s pretty good. Compare that to the shoe business and it’s great,” he said.
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Sluggish shoe sales reflect a downturn in apparel, in retail generally and in the overall U.S. economy. Most people postpone shoe purchases when they cut spending, Peterson said. But teens are less likely than adults to sacrifice style for savings, he added. Moreover, Gen Y consumers have more cash to spend than previous generations.
Journeys has style in its favor, too.
“They are very perceptive in knowing their customer, what they want,” said Robert Michaels, president and COO of General Growth Properties, some 70 percent of whose 168 regional malls include Journeys stores. “They’re ahead of the curve on a lot of the fashion … knowing Europe [and] the rest of the world” and parlaying those trends to the U.S. market, Michaels said.
Journeys is the only retailer selling a cool shoe brand at the mall, said Killick Datta, CEO of Global Brand Marketing. Department stores cater to older customers, Payless ShoeSource doesn’t offer brand names, and few other chains carry athletic and fashion shoes for the 13-to-19-year-old set. “I’m talking sports, fashion and casual” in one store, he said. Global Brand makes Diesel shoes.
Tagliola describes Journeys as a “bridge” between fashion, athletic and discounters.
Journeys’ fashion sense comes from the relationships its management has with designers, Peterson said. “As long as Journeys has these hot merchants, people who really get it,” he said, the company will continue to offer the most sought-after looks.
Identifying Journeys’ direct competitors is difficult. “Anybody trying to go after the junior dollar” competes, said Tagliola, who cited Skechers. Peterson, meanwhile, pointed to The Walking Co. and Overland, niche-type retailers with cool shoes; and Aldo, which has a European sensibility and dressier, pricier wares. Peterson noted just one direct competitor: The Buckle, a chain that also offers stores packed with hot brands. But with 350 stores in fewer markets, Buckle isn’t likely to steal much of Journeys’ business.
Journeys hopes to replicate its success through its children’s division, Journeys Kidz, which debuted in 2001. The company plans to roll out 25 new Kidz stores this year, bringing the total to 39.
But youth fashion is a notoriously fickle world. Even the hottest companies can spread themselves too thin or invest heavily in out-of-date merchandise. Peterson said he worries that Journeys’ “stack ’em high, let ’em fly merchandising” — sticking affordable shoes on cheap, easy-access display racks — is risky. The moment Journeys begins to be even remotely perceived as a discounter, Peterson warned, it will lose its fashion-conscious customers.
Today, though, Journeys offers what teens crave: multihued Timberlands; Birkenstock slides; spike-heeled, lace-up fashion boots; and thin-soled, suede Converse sneakers, revived from the 1970s. Shoppers like teen-ager Sierra Ferguson do notice. Ferguson, who usually buys sneakers at a hip-hop store near New Haven, Conn., cruised through Journeys for the first time recently with her younger cousin, Charnice Carpenter. Ferguson beamed as she eyed the display of “Tims” in a kaleidoscope of colors. “They have some good flavors.”
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