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BEST FOOT FORWARD

WOMEN’S SHOE CHAIN AEROSOLES HAS EMBARKED ON AN EXTENSIVE OVERHAUL

By Neil Janowitz

Jules Schneider, CEO and founder of Aerosoles, has always been one to look forward. About 20 years ago, as an executive of Kenneth Cole, he saw that Cole was doing little with its What’s What division, a marketer of women’s casual shoes. Schneider assembled a group to buy the division, then set out to meet an inexplicably overlooked demand for quality women’s footwear at prices far below the designer end.

The company began as a wholesale operation, selling mainly conservative shoes to department stores. But when those retailers started balking at Schneider’s increasingly progressive designs, he decided it was time for the company, renamed Aerosoles, to get a retail presence all its own.

From that point in the mid-1990s, the company established itself as a premier destination for affordable shoes blending class with comfort. Aerosoles operates 126 company-owned U.S. stores (New York City alone has 17), with a particularly heavy concentration on the coasts, and has roughly 125 licensed stores internationally. Mark Mueller, the company’s vice president of real estate, says this worldwide presence translates into same-store sales percentage growth in the high teens, with sales per square foot averaging about $450, and even higher in New York City.

Schneider is looking forward yet again. But whereas he once scaled prices down to provide an alternative to the top fashion lines, he is now boosting prices to create a new identity between the affordable women’s footwear market and the designer segment. The standard Aerosoles line, which previously ran in the $59-$69 range, now costs between $79 and $99, and the company has rolled out an Aerosoles Signature line with tags running from $129 to $149. Along with the price raises, Mueller says all offerings will feature a significant increase in quality.

Aerosoles is undergoing a massive overhaul of its storefronts and pursuing a concentrated expansion drive. Mueller, who cut his teeth in store deployment at Gap Inc., was brought aboard in January 2006 to spearhead the effort. Last April the Aerosoles store in New York City’s SoHo neighborhood, fresh from a floor-to-ceiling remodeling, opened its doors as the flagship example of the new look. The store is a clinic of sleek, minimalist design. Colors are limited to glossy black and understated white surfaces, with frosted glass panes and shelves and dark wood trim providing accents. The lines are curving and continuous, most apparent on the black lighting arches overhead. “The SoHo flagship was inspired by the store of our Milan licensee,” said Mueller. “It’s clean, sophisticated and luxurious and represents our new line of stores.”

The company aims to set up flagship stores in existing markets such as Chicago, Philadelphia and Seattle. “We’re looking at those areas in which we exist but aren’t fully established,” he said. “We want to get a flagship store in each of those cities.” Mueller anticipates the rollout of an additional 10 stores this year, each resembling the SoHo unit. “Our first mall prototype was completed recently in the Ridgedale Center, in Minnetonka, Minnesota,” he said. “The mall prototypes won’t be as fancy as SoHo, because it was very expensive. But they’ll have the important elements — the marble floors, the improved lighting and the white decor — so the shoes really pop.”

The company expects to open about 25 more stores next year and to remodel about 15 A-level ones. “We want to add more stores in street environments,” Mueller said. “That includes getting Manhattan up to 20 to 24 stores, which is what we see as their saturation point, as well as developing our presence in D.C., L.A. and Miami and other prominent urban areas.”

Aerosoles stores typically measure about 1,500 square feet, with 20 feet of frontage. The company prefers centers that cater to its target style-conscious workingwoman. Mueller cites Ann Taylor, Chico’s and Talbots as ideal neighbors. “We want to be the shoe store women come to after buying career outfits,” he said.

Such locations are standard fare for Stanbery Development, which houses Aerosoles units in five of its plazas and is eager to add more. “We have a core group of retailers, such as Gap, Talbots, Jos. A. Bank, that we call as soon as we start working on a new project,” said Ray Brunt, Stanbery’s vice president of leasing. “Aerosoles has joined that group. They fit well in our concept of a shopping center, and they have a great store with a great product and a great environment. Plus, women’s shoes will always be a good segment.”

Further encouraging Stanbery to reach out is the ease of working with Aerosoles. Brunt says Mueller and his staff respond quickly and intelligently to queries. “He’s a straight shooter and cuts right to the chase,” Brunt said. And Aerosoles’ upgrade plan is perfectly tailored to Stanbery centers.

“Our centers attract higher-end clientele, and Aerosoles may previously have been actually undershooting our customers,” said Brunt. “But after upgrading their quality and price points, they’re more in line with our clients. What they charge now isn’t going to meet much resistance.” It certainly has not thus far; Brunt says comp-store sales have risen in the double digits since Aerosoles boosted its product lines, and that the chain has consistently outperformed most other stores at Stanbery centers. This is no fluke, says Jeanine Pesce, a consultant at the American arm of PromoStyl, a Paris-based trend forecast firm. “The upgrade was a great idea,” she said. “It’s helped them reach markets they couldn’t before. They’re getting edgier and the price points are justifiable, because they’re both comfortable and very fashion forward, with more appealing colors and better hardware.”

What makes Aerosoles most appealing, says Pesce, is its universal appeal. “For a while now shoes have been very ornamental and baroque,” she said. “But basic shoes are the direction things are heading, and Aerosoles is keeping it basic and clean. They don’t have a specific customer in mind, so everyone from business casual to elderly to fashion-forward women are buying from them.”

And though Mueller groups Aerosoles with such conservative companies as Easy Spirit and Clarks, Pesce says she believes the chain now falls squarely among such hip brands as Cole Haan and Steve Madden. She also says the store is drawing an unexpected bunch. “Their basic, comfortable approach has helped them benefit from the nerd-chic movement that’s taking place,” she said. “Those types of shoppers are looking for less brand-name stuff and more of a downtown feel.”

But regardless of who is buying its shoes or, for that matter, why, Pesce says the company’s founding principles will continue to ensure success. “They simply make good, sturdy, comfortable shoes,” she said. “And in this era, when workingwomen wear flip-flops on the train and change into their dress shoes at work, it’s nice to find something that’s comfortable and stylish. It’s the best of both worlds.”