The famous British shoe brand Church’s Footwear is going through tough times. After a disappointing 2020 they raised prices with around 40-50% last year to try a new approach, which resulted in a drop in sales with another 57%. This means that they’ve dropped a whopping 81% of their turnaround in just two years time, and losses are huge. Question is if they can turn things around.
Last week Church’s full accounts for year 2021 became public, and it was another devastating read. Will be a lot of figures now at first, but I hope you’ll cope. The 149 year old company had a turnover last year of £6.1 million, which is an amount they haven’t been down at for over 40 years. In 2019, before the pandemic, the turnaround was over £32 million, although still with big losses of almost £10 m (the company hasn’t made a profit in many years).
In 2020, the year that the pandemic hit, sales dropped to £14.2 m., with a loss before taxes of £16 m. Apparently, the company felt something had to be done, and they sure did something. In a questioned move they raised prices across the board with 40-50%, this was in April last year, which I wrote about here. For many shoe companies business was starting to pick up a bit last half of 2021, but with the new prices this certainly wasn’t the case for Church’s. Apart from the low turnover, losses before taxes increased with 53% to a whopping £24,7 m. This is something that for example Daily Mail has written about, and they seem to be working on a follow-up piece on Church’s as I was called up by one of their reporters who wanted to talk about the company’s situation.
Now it’s the first half of this year that the real comeback for their fellow quality shoe companies in Northampton and elsewhere have been noticed, and hopefully Church’s will see this as well. That’s at least what they expect, according to the full accounts. But then as all know, other issues have appeared and it seems large parts of the world is heading in to a recession. Nothing healthy shoe brands haven’t been through before, though Church’s doesn’t seem like an especially healthy company at the moment.
When Italian luxury house Prada bought Church’s in 1999 and slowly started introducing more fashion oriented stuff (even if the classic stuff has always remained), it’s well-known that many shoe nerds moved away from the company. I would believe that they’ve now underestimated their continuous loyal customers who’ve always been with the brand, men who’ve continued to return to the brand when they needed new shoes. Many of these likely felt that the extreme price hike was too much, and look at brands like Crockett & Jones, Cheaney or Loake instead. I’ve heard stories from retailers of the latter getting in old Church’s regulars. In turn, they likely overestimated the luxury shoppers – less sensitive to the new prices, but not as interested as the brand thought they would be.
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As of now, employment rate in the company has stayed rather levelled, for example in production it’s been around 300 persons since 2017, and administration rather levelled as well, if anything growed a bit, but if costs would have to be cut it’s an area they might look at. As I also touched upon in the previous article I wrote on the price hike, a strong Church’s also means a lot for the shoe industry in general in Northampton. They have always been one of the big players there, and all the big ones are important for keeping up the whole infrastructure of the shoe business. So even if you are one who don’t care much for the brand’s shoes anymore, as shoe interested one should still care for the company Church’s. Let’s hope they find a solid way forward.
In the late 80’s I bought my first pair of Church Consuls at the NYC store. A few years later they opened an outlet in Darien, Connecticut. Picked up about eight pairs at $185USD. They all now have a nice home in Back Bay, Boston. Most were u worn when I gifted them, Fond memories.
Church’s makes such beautiful shoes, I really hope they can turn things around.
Probably not a coincidence that Cheaney’s new styles are copies of Church’s Grafton and Shannon …
Churchs without doubt make magnificent footwear, but the naivety of thinking sales will increase by making them even more exclusive beggars belief.
Competition out there is tough in ANY sector, so pricing yourself out? Terrible move.
When I first heard about Church’s re-pricing (via Jesper’s past article), I wondered how the ‘Heritage’ brand would compare to the relative newcomers such as Carmina, Carlos Santos, TLB et al in the quality shoe market. Why would you spend £800 plus when you consider the market in 2022?
I have 2 pairs of pre-Prada Church’s shoes I bought on the second-hand market, I am quite fond of them as the last shape suits my feet (wide and flat!). I’m not one who will buy British to be loyal for loyal’s sake; however, I hope Church’s brand survives….
Tony
Very informative read, Jesper, and the recent publication of accounts on Companies House is very telling. Profits at Church’s has, unfortunately, been on a downward trajectory for some time. Perhaps, it is the perceived support of the Prada group that motivated them to try various other non-Northampton-based products (e.g. sneakers, leather accessories), but the truth is, these other lines probably didn’t perform as well as they hoped.
And, I suspect the recent re-pricing strategy is to try to bolster profits by relying on the East Asian or Middle Eastern markets, where they thought their products were more price inelastic (for one reason or another). But maybe this didn’t work out and, at the same time, they lost a bunch of consumers in Europe.
I hope they can get back to their roots, but Crockett has grown so strong now and taken a hold of that niche. So, I don’t know…
^^^Thanks for your comments everyone! Yeah certainly hope they will prevail.
Eric Thullieux: Hehe yeah I thought about that as well, and that they made them in polished binder as well 🙂
William Wong: No problem to try out other things as well, many others do that too, I think issue is the lack of development and focus on the quality stuff they were known for that’s been the issue.
You’re probably right that they though a lot about EA and ME luxury shoppers with the new pricing strategy.
On Crockett, they seem to have seen a bit of a belayed pandemic hit, where they stayed levelled 2020 but for last year saw sales drop with 58%. For most others the drop came earlier, albeit continued in 2021, think it’s only Loake who’ve managed to retain sales between 2020 and 2021.
I first read about Church’s price increase in this well informed blog. I had my doubts that this would work. This is a tragic management mistake.
As a shoe fan, here would be my game plan-
1. Launch a new line that is based on what the traditional Church buyer always bought. Price it reasonably. That way they capture the traditional clients back. Without launching a new line, they could just drop prices of their standard line. But somehow they need to win back the traditional buyers.Dropping prices is always a tricky U-turn.
2. Increase the pitch of their welt stitch – simple, but the major drawback of a Church IMHO is the large welt stitch (low stitch per inch) – simple visual fix.
3. High end shops in the Middle/Far east if loss making need to be closed – by selling to other shops would still keep the perception of the brand.
4. Instead of trying to complete with the upper end (EG, GG), launch a range of `essentials` – something shoe buyers need for special occasions – interviews, weddings, funerals etc. – a black cap toe, a brown brogue, a black semi-brogue perhaps. These would be shoes anyone who went into a store would think ” I need one of those”, and market it as such.
Basically, Church needs to win back their market share as the `go-to` shoe shop. Trying to compete at the top-end was a big mistake, but no doubt Todds inspired.
The above is a quick over-coffee expression of personal views, interested to hear what others think!
Custom grade classics: mostly uninspiring lasts, uncomfortable soles (both rubber and leather), large welt stitch (structurally ok, but not nice on city shoes), unrefiened heel (vintage Church’s have really nice welts and heels), open channel soles (a rarety for calf at this price point). The uppers have a nice stitch density, lining is so so and the shoes feel relatively sturdy.
These classics won’t interest the new consumers of dress shoes. Most traditional costumers can’t afford them or/and know very well that there are better shoes at this price point. And these classics must have little appeal to the nouveau riches, who buy less and less this type of footwear anyway: no red soles, visible logos, flashy design, etc. I doubt they will even have much interest in their Crown and Royal lines, but it would be interesting to know how these lines are performing.
I doubt Church’s will be saved by their unexciting 840 euros sneackers with visible logos or fashion foward shoes.
Things are so badly run it doesn’t surprise me to hear that they are in difficulty – try buying a pair of slip-ons which is almost impossible! They need to go back to basics, pull back from China and the Middle East, stick with their traditional designs and part ways with Prada! Hope they survive
Tim: Yeah looks like they need to do something at least.
A once great house, totally ruied by Prada takeover.
Very sad to learn of the situation at Church’s shoe. The company was sold to Prada in 1999, and at that time it seemed that They would respect the integrity of the Brand. Expansion appeared to be quite rapid with new retail stores being opened. Pre 1999 the company had a preeminent position in the market and was expanding into complimentary products for men through focused licensing for leather goods, neck ware etc with renowned European manufacturers. As the company’s former marketing director I am naturally disappointed to see the decline of a great brand and hope it is not too late to repair the damage done in recent years by The current owners. I feel for what was a great and dedicated workforce.
Anthony Gledhill: Can imagine it’s sad to see a company one have worked for go in what one feel is the wrong direction.
Church’s makes a good shoe, but compared to the competition in the U.S. fine dress shoe market, they aren’t a good value. For far less than the price of their basic oxford, the best Alden and Allen-Edmonds cordovan shoes can be had in a full size range. They are asking A.Testoni prices without the style and construction. Their binder leather might sell well in England, but it looks heavily coated compared to calf offered by other makers for far less money.
Church’s only have themselves to blame for this situation. The product is now over priced to a level that consumers are going elsewhere (Oxfords 100% more expensive?). There are plenty of Northampton shoe makers making the same product and quality at 50% cheaper. Church’s is just over priced marketing and pretension mainly driven by Prada’s desire to be a “super brand” . They need to produce the product at a realistic market price and drop the Prada pretension. Quality will always be in fashion but ripping people off won’t be!
Very sad to see this happen to a great British shoemaker but the writing has been on the wall for quite some time since they were acquired by Prada. Many people I know stopped buying Church’s at this point in time as they had now lost a USP which was a British owned show maker. This together with their ( frankly ) ridiculous price increases have led customers elsewhere, mainly to the likes of Crockett & Jones who understand what customers like, want and most importantly are prepared to pay for a certain leather brogue or suede boot.
Idiot, bloody idiot. It’s a fookin’ crazy move.
church consul 173 : £940
vs
jm weston iconic oxford : €820
crockett and jones Audley : £670
edward green chelsea : £1050
What is your reason for buying Church?