Potential Impact of Brian Costelloâs Appointment on Famous Footwearâs Performance
| Area | What the change brings | How it can affect results |
|---|---|---|
| Strategic Direction & Execution | Costello moves from Chief Merchandising Officer (CMO) to Division President of Famous Footwear. As CMO he oversaw buying, assortment planning, and merchandising for the entire Caleres portfolio (womenâs, menâs, kidsâ, athletic & fashion). | ⢠Sharper productâmix focus â He now has full P&L responsibility for one brand, allowing him to translate his merchandising instincts into a broader brandâlevel strategy (pricing, channel mix, SKU rationalisation). ⢠Speedier decisionâmaking â With both merchandising and overall division leadership under one roof, the cycle from market insight to assortment change can be shortened, helping Famous react faster to seasonal and trend shifts. |
| Merchandising & Assortment Strength | Deep experience in âall buying and merchandisingâ across multiple categories, including highâgrowth athletic and fashion segments. | ⢠Optimised inventory â Better alignment of inventory with demand signals (e.g., stronger focus on athleisure, kidsâ footwear, or womenâs fashion trends) can reduce markdowns and boost gross margin. ⢠Higher sellâthrough â A more dataâdriven, categoryâwide buying approach can improve the ârightâsizeârightâtimeâ product mix, increasing sameâstore sales and average order value. |
| Brand Positioning & Market Relevance | Costelloâs background spans both fashion and performance footwear, two areas where consumer expectations are rapidly evolving (e.g., âfashionâforward athleisureâ). | ⢠Hybrid product development â He can push for collections that blend style and function, appealing to the âactiveâlifestyleâ consumer and capturing share from both fashionâforward and performanceâfocused competitors. ⢠Trend agility â Faster incorporation of emerging trends (sneaker culture, sustainable materials) can keep Famous Footwear topâofâmind for core and new shoppers. |
| Channel & Omnichannel Strategy | Having overseen merchandising for the whole Caleres portfolio, Costello is familiar with the performance of each sales channel (department stores, specialty retailers, eâcommerce, DTC). | ⢠Channelâspecific assortments â He can tailor the product mix for each channel (e.g., more exclusive styles for key departmentâstore partners, broader SKUs for online). ⢠Digital acceleration â With merchandising insight, he can better integrate data from online traffic and conversion metrics into buying decisions, potentially expanding DTC sales and improving gross margin. |
| Cost Management & Profitability | As CMO, Costello already managed cost of goods sold (COGS) and margin optimization across the portfolio. | ⢠Marginâfocused buying â He can apply tighter margin controls at the division level, negotiating better terms with vendors and reducing excess inventory. ⢠Operational efficiencies â Consolidating merchandising and division leadership may eliminate duplicate processes (e.g., separate planning teams), lowering SG&A expense. |
| Cultural & Leadership Continuity | He reports to JayâŻSchmidt, the President & CEO of Caleres, and has been with the company since FebruaryâŻ2024. | ⢠Smooth transition â An internal promotion reduces disruption; Costello already knows Caleresâ culture, systems, and strategic priorities. ⢠Alignment with corporate goals â Direct reporting to Schmidt ensures the Famous Footwear division stays tightly linked to the broader Caleres growth agenda (e.g., sustainability, omniâchannel expansion). |
| Risk Factors & Execution Challenges | ⢠Learning curve â While Costello is strong on merchandising, the President role adds responsibilities for finance, operations, talent, and overall P&L stewardship. ⢠Market headwinds â Macroâeconomic pressures (inflation, consumerâspending slowdown) could test any new initiatives before they generate measurable upside. |
⢠Mitigation â His deep productâcategory knowledge should help prioritize highâmargin, highâgrowth SKUs early, cushioning the division against broader market softness. |
BottomâLine Outlook
Revenue Growth â By tightening the assortment to match consumer demand and leveraging a faster âinsightâtoâstoreâ cycle, Famous Footwear can expect incremental sameâstore sales, especially in highâmargin athleisure and fashionâforward segments.
Margin Improvement â Costelloâs experience in COGS control and vendor negotiations should translate into lower markdowns and higher grossâmargin percentages, contributing to a healthier divisionâlevel EBITDA.
Channel Optimization â A more nuanced, dataâdriven channel strategy (balancing brickâandâmortar, specialty partners, and eâcommerce) can improve sellâthrough rates and reduce inventory carrying costs.
Brand Relevance â Faster adoption of emerging trends and a stronger focus on hybrid performanceâfashion products will help Famous Footwear stay competitive against both pureâplay athletic brands (e.g., Nike, adidas) and fashionâforward retailers (e.g., Converse, Vans).
Execution Risk â The primary challenge will be Costelloâs ability to expand his focus from merchandising to the full P&L and operational oversight required of a division president. Early wins in product mix and margin will be critical to building confidence across the broader organization.
Overall Assessment
Given Costelloâs deep merchandising expertise, internal familiarity with Caleresâ systems, and immediate reporting line to the CEO, the leadership change is more likely to be a net positive for Famous Footwearâs performance. The division should see:
- Accelerated topâline growth through betterâaligned assortments and quicker market response.
- Improved profitability via tighter margin management and SG&A efficiencies.
- Enhanced brand positioning that captures the growing âfashionâable athleisureâ consumer segment.
If Costello can successfully broaden his operational oversight while maintaining his merchandising edge, the Famous Footwear division is wellâplaced to deliver stronger sales, higher margins, and a more resilient competitive stance in the coming fiscal periods.