When the New York-based footwear company Common Projects launched their minimalist white sneaker, the Achilles, in 2004, there was little to forecast the brand would soon exceed 10 million dollars in annual sales and inspire countless imitations.
With a branding signature of gold digits printed across the heel portion of the shoe’s upper, the tennis shoe appeared to be re-birthed, though perhaps no-one made them as perfect as CP, as they are affectionately known to customers.
But nearly two decades later and the luxury sneaker market appears to be losing inertia. Earlier this year data from analytics company Retviews showed a slowdown in deliveries from luxury retailers. Analysing new arrivals over a three-month period showed a significant 33 percent decrease in the share of sneakers between 2021 and 2022.
Despite footwear being a power category for luxury brands - Euromonitor International estimates that the luxury footwear sector will generate 40 billion dollars by 2027, which is 29 percent more than in 2022 - other shoe styles are piquing demand.
Retviews data shows leading luxury brands by default put a stronger focus on men’s trainers, which make up 48 percent of their assortments. This is partially due to brands like Gucci and Prada tapping into streetwear and offering a more extensive assortment of sneakers. Despite the continued prominence of sneakers in luxury footwear, Retviews data also shows that the shoe’s presence in collections is slowly decreasing to make room for styles like loafers and high heels.
While comfort shoes and sneakers dominated the pandemic, formal footwear is once again gaining momentum, with heels having surpassed sneakers for womenswear, where sandals and stilettos account for 34 percent of the women's assortment. Sandal heels are a particular category winner, with its assortment share increasing by 25 percent, said Retviews.
The issue of pricing
Reviews data analysed the pricing patterns of sneakers versus men's loafers, where Prada's entry-level price for a more formal shoe is 22 percent higher than that of its tennis shoes. Similarly, Ferragamo sneakers have an average price that is 23 percent lower than moccasins. And again, Prada's 'slingback' pumps in brushed leather saw their value rise by 23 percent during 2022.
In 2018, Balenciaga’s chunky Triple S sneaker retailed for under 1,000 dollars and achieved soaring sales which contributed to the brand passing the billion euro revenue mark. Today it retails for 1,250 dollars, as part of a collaboration with Adidas, but the brand has expanded its formal offer, too.
A report by Grand View Research found that the global market for formal shoes is expected to decline at a CAGR (compound annual growth rate) of 4.5 percent from 2020 to 2027, however this does not apply to all types of formal shoes, with sales of more versatile and casual formal shoes like loafers and oxfords are back in demand.
As taste and consumer preferences evolve, brands expanding with a more formal footwear offering may see plenty of growth yet for 2023.
Article source: Lectra Reviews report "Decoding Luxury Footwear"