BELFAST, Me. — Colburn Shoe Store, established in 1832, advertises itself as the oldest shoe store in the country. It has occupied the same small storefront on Belfast’s Main Street since 1905. It’s a place where the owner, Colby Horne, and his father, Brian, remember the brand and size their customers like, and those of their children, their partners and probably their siblings, too.
They know the shoe business. But they can no longer sell some of the most popular brands, like Nike and Adidas.
The Hornes are among a number of independent retailers who have been cut off in recent years by giant shoe manufacturers adjusting their retail strategies. In some cases, small businesses are required to make large yearly purchases of $20,000 or more. That outlay can amount to at least 500 pairs of shoes, far too many for a one-room shop to carry and sell in a year in addition to its other brands.
Independent shoe stores like Colburn have been Main Street mainstays, but others have been pushed out of business by competition from big-box stores and online shopping. Now, with some big shoe companies’ required minimum orders, the smaller owners are under more pressure.
Glick’s Shoe Store in Lewistown, Pa., for example, closed on May 11, after 90 years in business. Nicole Swanger, the assistant manager, blames the store’s demise on losing its account with Nike, which had been its top-selling brand. And a Massachusetts retailer sued Nike after losing the account despite spending far more than $20,000 annually.
“The trend seems to be that volume is the way for the big shoe companies to make money,” Brian Horne said. “Obviously, a hole-in-the-wall shoe store doesn’t speak volume.”
In addition to the preference for larger retailers, Brian Horne said, the big shoe companies are increasingly steering customers to their own websites.
The United States footwear market was worth $72 billion for the 12 months that ended in March, and nearly 30 percent of those sales were made online, according to estimates from the NPD Group, a market research firm. Footwear sales were up 4 percent from the 12 previous months. But direct-to-consumer sales from brands’ own stores, websites and catalogs grew much faster, at 12 percent.
“It doesn’t mean the physical stores are going to go away, but there will be a whole lot less of them,” said Matt Powell, a sports industry analyst for NPD. “It’s unfortunate, because our country’s retail business was built on the small mom-and-pops.”
Nike ended its relationship with the Hornes with a November 2015 letter stating, “We have recently determined that Colburn Shoe Store no longer aligns with our business strategy.”
The shoemaker would not discuss the specifics of its retail approach.
“Nike continually evaluates the marketplace and competitive landscape to understand how we can best serve consumers,” Sandra Carreon-John, a Nike spokeswoman, said in an email statement. “As part of this, from time to time we do make adjustments to our sales channels, in order to optimize distribution.”
Adidas also declined to discuss specifics, but claimed it had no minimum order threshold. “Our retail partners can order products in any quantity,” the spokeswoman, Maria Culp, said in an email.
Yet Ms. Swanger, of Glick’s Shoe Store, said the increased minimum volumes were a significant reason for the store’s closing.
“It’s a huge problem. We lost Nike a couple years ago,” Ms. Swanger said. “That really hurt us.”
In late May, UGG closed its account with Maine Sport Outfitters, an independent outdoors store in Rockport, citing its failure to meet a $10,000 annual minimum. The company’s footwear buyer, Emma Beaudry, said the store had already lost its Adidas and Nike accounts, and minimum volumes were a factor in both cases.
Other independent retailers say they lost accounts despite maintaining minimums. Kevin Carter, a third-generation co-owner of Carter’s Clothing and Footwear, said the company’s stores in New Bedford and Fall River, Mass., had bought $350,000 worth of Nike products annually, and that they represented nearly a quarter of its sales. But after a 30-year relationship, Nike stopped selling to Carter’s in 2013, with no explanation.
The Carter family sued Nike in 2013, claiming, in part, that the shoemaker’s letter terminating the account “was in bad faith, and intended to hide its true interest of favoring large-scale retailers who would set higher prices for Nike product.”
Nike moved to dismiss the suit, claiming its invoice agreement required dealers to file any legal action in Oregon, where the company is based. The court granted the motion to dismiss, but Mr. Carter said the family had chosen not to pursue a legal challenge in that state.
“The real sad part of it is, all the little independents that they are cutting off were around before the chains,” Mr. Carter said. “We were on every corner, and that’s what built their brand.”
Big-box stores like Walmart, Costco and Target account for the largest portion of footwear sales in the United States, said Andy Polk, senior vice president of the Footwear Distributors and Retailers of America, a trade organization. They are followed by chain stores like Famous Footwear, Rack Room Shoes and Shoe Carnival.
Nike’s global revenue grew steadily to $36 billion in 2018 from $28 billion in 2014, driven mostly by sales in overseas markets, the company said in its annual earnings report.
Nike accounts for more than a third of the athletic shoe market in the United States, said Mr. Powell, the NPD analyst. And he said its decision to limit the number of retailers made good business sense, especially because it can make a higher profit by selling directly to consumers from its own website.
Mr. Powell added that the trend was noticeable across all retail sectors: Manufacturers are focusing on their most profitable accounts, and closing those that are marginal.
Catering solely to big retailers can have its risks, too. When the Sports Zone and the Sports Authority filed for bankruptcy in recent years, they owed millions of dollars to Nike, one of the top unsecured creditors in both bankruptcy cases.
The announcement by Payless ShoeSource in February that it would close thousands of stores was covered by the news media, but nobody is closely tracking the number of independent stores that are closing, Mr. Powell said.
“It’s something we’re concerned about, too,” Mr. Polk said. “There’s just a lot of churn in the industry right now.”
Chuck Schuyler, president of the National Shoe Retailers Association, another trade group, said the number of independents in the United States was declining, and estimated that 6,000 to 8,000 independent shoe stores remained. He said those retailers could remain competitive by giving customers the service and attention they could not get online.
Brian Horne and his son, Colby, in the family’s shoe store, which is adapting to requirements from shoe manufacturers and changing consumer habits. CreditTristan Spinski for The New York Times
Colby Horne said losing the Nike and Adidas accounts had stung, but he’s gotten over it. Now, when customers come in looking for Adidas or Nike running shoes, he gently suggests they might try a shoe from a brand popular among runners like Brooks, New Balance or Saucony. The store has accounts with more than 100 brands.
“You need to adapt your business, and seek out the brands that don’t require minimums,” he said. “There’s a lot of good stuff out there.”
Customers will try on shoes in his store, Colby Horne said, then buy them online, a tactic known as showrooming. Or they will bring in ill-fitting shoes they had purchased online, asking for help with the fit. But he sees these instances as an opportunity to provide personal service, something online retailers cannot duplicate. He may not be able to make a sale at that moment, but he might encourage a customer to come back.
“That’s where your sales skills need to come in,” he said. “And you find a way to nicely say, ‘We’re happy to take care of this problem for you. Next time, swing by and I can give you pointers on the shoes, and help you out so you won’t have to go through all of this.’”
