Lean inventory management pays off for shoe retailers
To maintain revenues, companies have tailored retail operations to keep a tight hold on inventory, and the strategy is paying off.
Footwear companies such as Foot Locker, Brown Show and Dick’s Sporting Goods benefited this year not only from a warmer winter, but from maintaining lean inventories.
In fact, Foot Locker saw impressive gains on the stock market in the first quarter. Shares for the retailer were up by 10 percent for $30.89 a share, while Brown Shoe, which owns the Naturalizer brands, was up 9 percent – valued at $9.51 per share, Reuters reports.
"(Inventory management) bodes well for product margins in the second and third quarter," CL King analyst Steven Marotta said about Brown Shoe, according to the news source.
Keeping inventories lean helps retailers reduce supplier costs and allows the profits gained to go further, as they’re covering fewer expenditures. However, retailers saw revenues boosted by unseasonably warm weather, which encouraged more consumers to get moving outside.
