Just one day after announcing the $45 million acquisition of Rogan’s Shoes, Shoe Carnival Inc. president and chief executive officer Mark Worden told FN in an exclusive interview that he is “energized” about the company’s next chapter as it embarks on an 18-month integration plan to bring the family footwear retailer into the fold.
“Our plan is to rapidly grow our Shoe Station growth banner that we acquired back in December 2021,” Worden said. “And as part of that, we’ve been looking for similar retail leaders in different markets that we could roll into the Shoe Station business. Rogan’s is a perfect fit. Its customer base is very similar to the Shoe Station banner, its assortment has a lot of commonalities. And for us, it’s going to be a perfect match.”
This means that Rogan’s existing network of 28 stores across Wisconsin, Minnesota, and Illinois will be co-branded with the Shoe Station banner and will feature the combined name of Rogan’s Shoe Station, Worden noted.
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“There’s so much brand loyalty and trust [with Rogan’s Shoes], that we do not want the local customer to lose the brand they’re accustomed to seeing when they come to the store. Apart from this move, we will also be integrating Rogan’s Shoes website into the ShoeStation.com e-commerce operations as well as incorporating the business into Shoe Carnival’s company-wide CRM.”
The integration also will happen at the vendor level. The CEO highlighted Rogan’s “great selection” of performance running brands that will help position Shoe Carnival at an “even more relevant” place in the segment. He also hopes to gain insights from Rogan’s seasonal winter assortment and apply that to Shoe Carnival’s business. “Our intent is to build not to detract from the great brands and products that Rogan’s has developed,” Worden said.
As for how the Rogan’s Shoes team will combine with Shoe Carnival’s existing management structure, Worden noted that Pat Rogan, chief executive officer of Rogan’s Shoes, will be retiring while company president, Jim Rogan, will join Shoe Carnival as vice president. “Jim is going to stay on to help us grow the Rogan’s business in the future as well as lead us through the integration process,” Worden said.
Following this integration, the combined banner sales are expected to surpass $200 million by fiscal 2025. The acquisition also increases the company’s store count to an all-time high of 429, keeping the company on track to achieve its target to operate over 500 stores in 2028.
So, does this mean there will more Rogan’s Shoes stores open up in the future? Worden is uncertain. “We have to evaluate that in the next 18 months,” he said. “It’s our intent that it all operates as Shoe Station at the store level, the product assortment, the marketing and digital. But we need to learn and listen to our customers to see if we grow in adjacent states, should it be just Shoe Station or Rogan’s Shoe Station.”
What is for certain, though, is that Shoe Carnival is not finished with acquisitions. “It’s our intent to keep looking for these additional M&A opportunities and explore them when the time is right for our continued expansion,” Worden said.
Turning to the company’s outlook for 2024, Shoe Carnival said on Tuesday that, on a preliminary basis, it currently expects to grow fiscal 2024 total net sales in the low mid-single digit range, driven by the new business, Shoe Station banner growth, e-commerce expansion and continued CRM evolution. These gains are expected to be partially offset from the expectation of a challenging economic backdrop continuing in early 2024.
Asked what these specific economic challenges are, Worden told FN that he expects the inflationary pressures facing Americans is expected to persist at least through early part of this year. “We’re anxiously awaiting to see what stance The Fed takes on interest rates, but it’s unclear at this point in time,” Worden noted.
As for how he’s navigating the business through these economic pressures, the CEO added that over the past three years, Shoe Carnival has been able to “significantly” expand profits to shareholders by “aggressively” trying to control costs and trying to get the right value equation for customers.
And while the company will provide its updated guidance for fiscal 2024 in March when it reports final audited financial results for fiscal 2023, Worden added that the company highlighted Shoe Station and its e-commerce in the 2024 preliminary guidance because they have the fastest growth potential within the company.
“Shoe Station continues to deliver growth, both on a revenue and profit perspective,” Worden said. “And our e-commerce business as well. We’ve made significant investments to enhance the customer experience this year.”
