Brown Shoe headquarters on hold27 November 2008
Brown Shoe Co's profit dropped 62% in the third quarter due to a rapid decline in consumer spending. As a result the company have decided to slow their store expansion plans and postpone their new $568 million headquarters development in Clayton, USA.
In an earlier move, Brown Shoe said they had scaled back on the headquarters and retail campus to include only the 12-acre site they currently own. An earlier plan included about an acre of the Clayton High School campus. Profit decreased to $10.4 million, down from $27 million a year ago. Sales in the third quarter decreased 2.2% to $631.7 million compared to $645.5 million a year earlier. Same-store sales at Famous Footwear declined 5% versus a decrease of 2.6% in the comparable 2007 period. To deal with the economic slowdown, the company have reduced their store expansion plans for the 2009 to 2011 period and ‘indefinitely paused' the development of their new headquarters in the hopes of saving $72 million. Brown Shoe now expect to open 89 new Famous Footwear stores, instead of 100-110, and close 25 stores, said Dave Garino, a company spokesman. The company also expect to open 25-30 new speciality retail stores, including 15-20 in China, and close three of them.