Shoe Carnival: From Whimsical Beginnings to National Expansion

Rethinking Locations

The natural customer traffic patterns of malls has brought new types of customers to Shoe Carnival and helped the company expand its market. Today, Shoe Carnival is nearing 20 in-mall locations and has committed to building more each year.

The move into mall locations is only the latest evolution for Shoe Carnival. Shoe Carnival began in Evansville, Ind., in 1978 as a result of the creativity and entrepreneurship of a local shoe salesman, David Russell. His ingenuity and personality carried the shoe store from its small flagship store, Shoe Biz, into the publicly traded, leading family channel footwear retailer it is today. Russell’s vision was to create a fun shoe shopping experience, and his first store boasted stacked shoeboxes, toys, balloons, and prevalent 1950s-era music piped through a jukebox that was only interrupted by managers to announce surprise sales.  Although Shoe Carnival stores have eliminated most of the clutter in its updated, contemporary locations, shoppers still experience the foundation of fun that its founder envisioned.

The initial Shoe Biz shop and subsequent stores adopted the name Shoe Carnival in 1982 and grew exponentially in profitability and quantity of stores throughout the 1980s. Shoe Carnival ultimately transitioned to a publicly traded company in 1993, trading on the NASDAQ Stock Market under the symbol SCVL. Today, Shoe Carnival is nationally known as a leading retailer in the footwear industry and operates more than 400 stores in 32 states and the commonwealth of Puerto Rico. Shoe Carnival maintains its corporate headquarters and distribution center in Evansville.

While the whimsical attractions and toys have long since disappeared from Shoe Carnival’s floor plan, the atmosphere of fun and surprise, along with consistent customer service, remain. Shoe Carnival offers the largest selection of the latest styles from the best brands in the shoe business. The company is known for its incredible variety of children shoes, with associates on hand to properly measure children’s feet and fit shoes, as well as its lengthening list of women’s fashion shoes and accessories from notable names such as Madden Girl, Nine West and Kenneth Cole Reaction. The stores offer highly technical running shoes and men’s fashion options, including the largest retail selection of work shoes for the family.

Since taking over Shoe Carnival’s development program seven years ago, Gubser’s mission has been to open new stores at an accelerated pace. Shoe Carnival is now launching between 20 and 30 locations each year but Gubser expects that rate to climb as the company rolls out new concept stores. In addition to its strip center and mall locations, Shoe Carnival is developing a third prototype: a smaller store in the 4,000 to 6,000 square foot range designed for county-seat type of communities where Shoe Carnival currently has less presence. “We’re doing that to address some of the smaller communities across the country and get closer to our customers,” Gubser explains.

The first of the small prototype stores opened in Blytheville, Ark., and Shoe Carnival is working on a second one in Marion, Ind. “We have high hopes for that concept, that we’ll be able to build as many of those each year as the standard-size stores,” Gubser says.

Online Presence

On average, Shoe Carnival stores stock approximately 28,000 pairs of shoes, which allow each location to have both a broad assortment and a depth of sizes. Managing that volume of inventory requires a state-of-the-art distribution center coupled with an industry leading information system that tracks daily sales and automatically replenishes stock for delivery the following week. Shoe Carnival’s multi-channel capabilities allow customers to shop in any way they desire, be it from the comfort of their home or in any of the more than 400 brick and mortar locations throughout the US.

The new online shopping and store prototypes are supporting expansion. The company is entering markets such as south Florida as well as Philadelphia, where it opened seven stores in the past year. While Shoe Carnival continues to evaluate new markets, it is filling out the areas it currently serves. “We are a conservative company fiscally,” Gubser says. “We self-fund all our development work. We’re careful about our real estate selection and how we want to expand.”

This self-funded approach to real estate helps Shoe Carnival better manage the ups and downs of the economy. Gubser says it has also given Shoe Carnival the ability to be flexible when opportunity arises. “We are capable of deciding on something and moving on it with an agility that I think has been unmatched by the other companies I’ve been associated with,” he adds. To help guide that growth and real estate decisions, Shoe Carnival has developed a model program that calculates sales projections for target sites and even entire markets.

Even as e-commerce becomes a bigger part of the company, Gubser believes physical stores will remain a vital component of attracting customers. “The question is always asked, ‘Is there room for retail stores in the coming years in the market?’” Gubser says. “We’re still confident that people like the excitement our stores offer, browsing shoes and trying them on right then and there.”