Pain at the Other Pump

Say it ain't so!

I read this story in the Wall Street Journal this morning and I am officially annoyed. You know, I do my part. I take the crappy metro to work and I try to save gas by walking more - and this is the thanks I get? The price of shoes is going up! I just can’t win.

Pain at the Other Pump: Shoe Prices Rise

By RACHEL DODES AND RAY A. SMITHMay 13, 2008; Page B1

The hottest trend in footwear this season? Inflation.

After a decade of declining prices, footwear makers at all levels are raising prices. The mass-market Payless, a unit of Collective Brands Inc., recently increased prices on shoes in stores, though it won't say by how much. Brown Shoe Co., which makes Via Spiga and Buster Brown footwear and hasn't altered prices in years, plans an increase of 5% to 12% for fall. And the Nine West shoe label plans to boost prices on some styles by 15% next year.

The moves reflect higher costs in China, which makes about 85% of shoes sold in the U.S., as well as higher fuel costs and the weak U.S. dollar. And they could presage price increases of other goods soon: Handbags, belts and other leather accessories are made in the same region in China.

The shoe price increases follow 10 years in which U.S. footwear prices fell 4.3%, according to the U.S. Bureau of Labor Statistics. A key reason for the decline was that makers moved production to low-cost locales such as China and passed along some of the savings to consumers.



For retailers already struggling with a downturn in consumer spending, the higher costs couldn't come at a worse time. They fear the price increases will further damp shopping, forcing them to eventually slash prices to move merchandise and hurting their profit margins in the process. Nannette Kiefer, a 45-year-old homemaker in West Palm Beach, Fla., says she will take more time to find bargains if stores suddenly begin charging $120 for two pairs of shoes that she used to get for $100.

The prospect of higher prices "is causing a good deal of apoplexy" among retailers, says John Shanley, an analyst at Susquehanna International Group, who estimates that shoe makers will raise prices by an average of 10% to 15% in the next year, which would be the largest single-year increase in more than 50 years, according to the BLS.



Some makers figure they have room to maneuver now because the weak dollar has pushed up the price of high-end shoes made by European labels. At Jones Apparel Group Inc., maker of Nine West shoes, Chief Executive Wes Card says that, even if the price of a $65 shoe rises to $75, consumers are likely to view it as a good value compared with European luxury brands. "The gap between a Nine West shoe ... and a Jimmy Choo" has gotten wider, he says.

Others aren't so sure. "We understand this may be difficult for consumers, so we will work to provide them even more value from our brands," by adding features such as breathable linings and cushioned in-steps, says Brown's chief financial officer, Mark Hood.




Like I really needed an excuse to post pictures of cute shoes?





So while I was looking at pictures for this post, I came across the Buster Brown logo. WTF? Is this what it always looked like? Seriously- they make kids shoes- I think I even had buster brown saddle shoes when I was little- but LOOK at the dog's eyes. I think this would scare most children!