Baker's Footwear Treading Cautiously in 2007

ST. LOUIS-After a harsh end to FY 2006, Baker’s Footwear Group is working to ensure the other shoe does not drop in 2007, quickly cutting inventory and limiting unit growth to nearly one-third of last year’s pace. The conservative approach is being invoked even though revenues were actually up compared to 2005, with management blaming an oversupply of boots and booties in the fourth quarter for offsetting gains posted in other categories.

“We just feel that the risk/reward ratio given the performance of 2006 is best served by buying very tightly,” CEO Peter Edison said yesterday in a conference call. “It is a strategy that might leave some profits on the table, but is more likely to assure at least an acceptable level of profitability.”

Bakers will invest in product, he says, but will monitor fashion changes and nimbly respond to evolving colors, styles and materials. The mall-based retailer caters to men 18 to 28 and women 16 to 35, offering a lineup of shoes and accessories that can go out of vogue at a moment’s notice and require huge markdowns to move. It is a scenario Bakers does not want to face again, says Edison, as it did when the winds of whimsy swept over the boot department last November.