“Compelling new sneaker styles from Sorel and a resurgence in the wedge category have contributed to phenomenal demand and brand warmth,” CEO Tim Boyle said on a call with investors and analysts. “Columbia’s success is rooted in the brand’s differentiated innovation, value proposition and authentic outdoor heritage.”
Founded in 1962, Sorel was known for its high-end boots and was later acquired by Columbia filed for bankruptcy in 2000 for $8 million. Now Columbia executives have said they expect Sorel to be its fastest-growing brand in 2022 as it continues to move away from being a pure winter brand, according to its call for fourth quarter results. On the recent earnings call, executives said Sorel’s sales were driven by strong performance in wholesale and direct-to-consumer sales.
“In addition to favorable cold weather product sales, we continue to see year-round styles gain traction,” Boyle said. “The Kinetic Impact Lace sneaker was the number one style by units sold on Sorel.com, underscoring the brand’s growing presence in the multi-billion dollar sneaker category.”
The clothing brand has been one of the retailers that has benefited from the outdoor boom during the pandemic, and during the winter season analysts say Sorel’s winter products were positioned to meet demand. As other retailers like lululemon Betting on the shoe market for growth, Columbia seems to be benefiting again from already having an established brand on its roster.
The shoes seem to be one of the retail brands last battlefields. Lululemon announced the release of its women’s sneaker line last month. Meanwhile, fitness equipment brand Nobull launched its first performance running shoe in February.
In Columbia’s case, shoes make up a large portion of its sales. This quarter, footwear alone accounted for $195.6 million in sales, while apparel, accessories and equipment combined accounted for $565.9 million in sales. Footwear sales were up 25% in the first quarter and the rest were up 21%.
Over the years, Sorel has released a variety of shoes for different markets. This month, Sorel and the artisan coffee company Alfred published two styles of sneakers inspired by popular drinks: iced matcha latte and iced vanilla latte. In 2019, it also launched its very first waterproof sneaker, dubbed the Basket Out ‘n’ About Plus.
“Sorel, in particular, is a brand that has shown some momentum over the years,” said Matt Powell, senior industry advisor for sports at The NPD Group. “It’s been an exciting acquisition for Columbia as they learn how important fashion is and how fashion and function combined really is a powerful story.”
Earlier this year, in January, Sorel partners with Zappos.com to launch three iconic shoe styles. Sorel has modified and added new features to some of its best-selling shoes to make them more accessible to consumers, including people with disabilities.
There are good reasons for Columbia to up their shoe game. Sneaker sales are up 20% in 2021 compared to 2020, according to The NPD Group. However, supply chain constraints continue to lead to stockouts. Last month, Modern Retail reported how certain sizes for specific bestsellers shoe styles were out of stocklike the Club C 85 Vintage style from Reebok and the Air Force Ones from Nike.
Like other clothing brands, Columbia’s operations are also plagued by supply chain issues. Executives said they expect some of its fall 2022 production to be “a little behind the market.”
“The supply chain is probably the biggest pothole wild card they could run into,” Powell said. “But they seem to have sailed quite well in this first quarter, so my instinct is that they will continue to outperform the rest of the market.”
Columbia reiterated its full-year net sales outlook of $3.63 billion to $3.69 billion, an increase of 16% to 18%. The company expects operating profit of $477 million to $502 million, up slightly from its previous guidance of $472 million to $498 million.
Jessica Ramirez, senior research analyst at Jane Hali and Associates, said Columbia could continue to face tough year-over-year comparisons, especially amid logistical challenges. However, the outdoor trend is still in full swing, which positions Columbia to reap the rewards.
“Columbia, as a group, they’re in a space where I think the consumer still has interests,” Ramirez said. “There’s just been a real shift in how consumers have decided to spend that free time and they’ve enjoyed it. I don’t see that going away and Colombia is a key player in this space.