Footwear Economics
According to market analysts, footwear is starting to fail. Because of the failing real estate market, peoples high amount of debt and high food and gas prices, the demand for shoes is starting to fall. Of course shoes are always a necessity, but the high prices that are slapped on designer shoes are starting to turn customers off. Because there is a lower demand, the designers themselves are failing to make the shoe of the season. It seems that they are scared that no one will spend the large amount of money and therefore, making the shoe in the first place, is a waste of money.
In the past we can see shoes like Airwalks (now sold at Payless), Heely's, or even jelly shoes. But this season there is no one shoe that all the celebrities are wearing, and that all of the mainstream wants to have. Recently the trend of flats and peep toe pumps has been the inspiration and must have, but since spring there is not really anything new.
I am sad to say that one of the only companies to survive the falling shoe market is Deckers Outdoor Corporation, the creator of the UGG boot. Its popularity started in about 2002 and through very clever marketing they have kept their boots popular even through the failing markets.
While most shoe companies are only raising about three percent in the stocks (if they aren't dropping up to eighty percent in a year) Deckers is rising 14 percent on their shares. They are adjusting to the current market by making a limited amount of shoes and raising the price. This makes the shoes that are available more exclusive, so more people want them, despite the high price. Therefore, the people that will still pay the high price despite the debt and failing markets, make up for the difference that the company would have made had the market been normal.
Deckers clever marketing schemes definately illustrate the importance of knowing the market and finance. Because of their knowledge they were able to adjust...
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