Shoe makers reverse trend by raising prices

By The Wall Street Journal

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, 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 percent to 12 percent for fall.

• And the Nine West shoe label plans to boost prices on some styles by 15 percent next year.

The moves reflect higher costs in China, which makes about 85 percent of shoes sold in the United States, 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 percent, 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.

John Shanley, an analyst at Susquehanna International Group, estimates shoe makers will raise prices by an average of 10 percent to 15 percent in the next year, which would be the largest single-year increase in more than 50 years, according to the BLS.

However, 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, 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 said.