The trend of ugly shoes has firmly taken root, with comfort now trumping appearance for many consumers. Whether it's Uggs for work, Crocs for parties, or Birkenstocks paired with socks all summer long, people are prioritizing comfortable footwear across generations. This shift toward casualization has thrust once-stale brands into the limelight, resulting in increased sales.
Stifel analyst Jim Duffy points out a retro trend characterized by the soaring popularity of chunky "dad shoes" from New Balance, as well as the explosive appeal of the Adidas Samba, Campus, and Gazelle sneakers.
But how did these bulky "dad shoes" become a fashion staple? The answer lies in the rising preference for shoes that "feel good on your feet." Younger consumers, in particular, are embracing comfort over fashion, even considering it a form of style.
The global comfort footwear market is projected to grow from $26.35 billion in 2023 to an impressive $47.37 billion by 2028. Established giants like Nike (NKE) and Adidas (ADDYY) now face competition from rising stars.
Interestingly, the average American buys only about seven pairs of shoes per year, according to Duffy. Brands like Deckers Outdoor (DECK), Crocs (CROX), Birkenstock (BIRK), and Skechers (SKX) are vying for coveted spots in consumers' closets.
Wedbush analyst Tom Nikic emphasizes that the larger brands, such as Adidas and Nike, recognize the threat posed by these up-and-coming companies. While they may be small today, their potential for growth is significant. Both Adidas and Nike need to focus on innovation and reduce their reliance on e-commerce sales.
Capitalizing on comfort, brands that have embraced this trend are reaping the rewards. Deckers, for instance, reported a 17% revenue increase over nine months, with profits growing nearly 50% to $632 million. Crocs also saw a 47% profit boost for the full year in 2023, accompanied by an 11% rise in sales. Hoka and Ugg, two of Deckers' comfiest brands, have been driving growth. Ugg sales surged 15%, reaching its first-ever $1 billion quarter, while Hoka's revenue jumped 22% to $429 million. Clearly, comfort is the new chic!
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