Some shoe sellers gain on analyst report

AP News
Posted: Dec 02, 2009 12:11 PM

Shares of footwear retailers gained Wednesday after a positive report from Sterne Agee & Leach that said certain brands could have strong holiday sales coming up.

Sterne Agee & Leach analyst Sam Poser said three shoe companies stood out as those outperforming their peers this holiday shopping season. Those are Deckers Outdoor Corp., owner of the popular UGG brand; Skechers USA Inc., which sells Shape Ups; and Wolverine Worldwide, which sells Merrells.

Shares of Deckers rose $2.44 to $97.12 in late morning trading. Skechers rose $1.04, or 4.5 percent, to $23.98, and Wolverine Worldwide rose 40 cents to $26.69.

Poser said even as those three outperform, shoe makers face a tough spending environment. He said many said that they must gain market share in order to expand their business.

"With that in mind, retailers, especially major department stores, are aggressively promoting in order to gain market share and then putting the markdown responsibility back on the vendors," Poser told investors in a research report.

For example, Poser said Macy's had increased its markdown percentages to 70 percent from an initial 30 percent, then told vendors they had to contribute to the revenue lost through the markdowns.

Overall, Poser said sales over Thanksgiving were "only okay" and that retailers are looking hopefully to the next few weeks.