Monday, January 21, 2013

Each New Year kicks off furiously in the footwear and apparel business. “After-Christmas Clearance” has become a major strategic shopping season unto itself for retailers; trade shows in Florence, New York, Orlando, Chicago and Vegas offer anticipatory looks at Fall Season fashions and a chance to showcase again what could be ordered last minute for Spring; department stores and independent clothiers shift their focus to their bigger plans for the new year (having been consumed by the Holidays for all ofQ4); and across the country people’s intensity turns back to work, after a month of reflections, reconnections and recreation. Combined with a few recent roundtable dinner discussions with friends who have some pretty big jobs in Minneapolis and Milwaukee, there’s also a lot of proprietary backward-looking and forward-looking information to process.

This year’s prognosticating has been unusually challenging, I think. The whole spectacle of continued fiscal crisis and dysfunction in Washington should be making for uncertainty that’s bad for business. Sales in our stores in mid-December seemed to indicate that the economy was headed for a “cliff-based” slowdown, while our “leaders” once again punted in their showdown. Other retailers were sharing the same longer term concern through the grapevine. Then January landed, and things have been going surprisingly well (knock on wood).

The consensus among my friends in senior roles in investment management, insurance, manufacturing, agribusiness, corporate finance and health insurance seems to be that the economy will continue to weather the stand-off in the Capitol, and will grow 3-4% in 2013 – with the Fed keeping interest rates mostly where they are, unemployment falling gradually and housing recovering distinctly. It seems, then, that retailers’ experience in December will continue throughout the year – with solid business interrupted by disconcerting spurts of negative momentum which, we hope, go away again.

In fashion, things are more easily predicted. The professional men’s wardrobe transformation that began a couple years ago continues. Multiple shades of brown shoes and wing tips of many kinds remain hugely popular for dress and casual situations. Special occasion dress is getting more dressy now. Pleated pants are out, flat fronts are in (I got called out for pleats myself this summer by younger members of the “Reddit” website community, when I had to post a picture of myself to confirm my identity). Overly generous sizings in pants, shirts and sweaters have given way to slimmer-fitting apparel. Vests, as a substitute for a sport coat, are also spreading at the office and social functions. And “pops” of brighter colors are seen in almost everything – from soles to shoelaces to socks, and to any kind of patterned shirts, ties, vests and blazers. You golfers out there can follow what’s happening by thinking of Ricky Fowler’s influence on PGA attire. Three years ago his orange, lime green and bright blues were unique outliers; last year they became mainstream, on and off the course. Bright colors – writ small and large – are seen all across the entire conservative to high fashion spectrum.

Finally, last night (1/19), the National Hockey League re-started their season after the owners locked-out the players for several months. This is very big news in my part of the world. So, I thought I’d finish with an update on “Allen Edmonds Arena”, about which I wrote a year ago. As I said then, many great brands have a sports facility named after them and, not to be outdone (but within our company budget), my hockey-crazy brother-in-law offered to christen his backyard rink “Allen Edmonds Arena”. He supplied the yard, the boards and the water, and we supplied the banner. My nephew, now 6, is scoring even more goals at AEA this year than last. The on-ice action has picked up speed and we had a great intra-family game over vacation with my sons and nephew taking on my brother-in-law and me. A friend of mine, who somehow hadn’t yet heard of the new sports facility in town, drove by their house and, surprised, snapped the attached photo.  

Here’s hoping 2013 does indeed bring lower unemployment, improving economic growth, continued strong business for Allen Edmonds and for all… and better weather for making outdoor ice.

Warm regards,

Paul D. Grangaard

President & CEO

Allen Edmonds Shoe Corporation