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Item 1. Business

2023-03-28 compared with 2022-03-28 · 139 added, 155 removed, 175 unchanged (63% of the section changed)

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(the "Company"), originally founded as Brown Shoe Company in 1878 and incorporated in 1913, is a global footwear company.

Current activities include the operation of retail shoe stores and e-commerce websites, as well as the design, development, sourcing, manufacturing, marketing and wholesale distribution of footwear for women, men and children.

Our business is seasonal in nature due to consumer spending patterns, with higher back-to-school and holiday season sales.

While the third fiscal quarter has historically accounted for a substantial portion of our earnings for the year, we are beginning to experience more equal distribution among the quarters.

We meet consumers where they want to shop, whether in-store or online.

The Company’s business operations are organized into two reportable segments—Famous Footwear and Brand Portfolio.

The Famous Footwear segment is comprised of our Famous Footwear retail stores, famousfootwear.com and famousfootwear.ca.

The Famous Footwear segment operated 873 stores at the end of 2022, selling primarily branded footwear for the entire family.

The Brand Portfolio segment offers retailers and consumers a carefully cultivated portfolio of leading brands.

This segment is comprised of wholesale operations that designs, develops, sources, manufactures, markets and distributes branded, licensed and private-label footwear primarily to online retailers, national chains, department stores, mass merchandisers and independent retailers, as well as Company-owned Famous Footwear, Sam Edelman, Naturalizer and Allen Edmonds stores and e-commerce businesses.

It also includes the Sam Edelman, Naturalizer and Allen Edmonds retail stores, including 63 stores in the United States and 29 stores in China at the end of 2022, and the e-commerce businesses for our Company-owned brands.

Our net sales are comprised of four major categories:

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Clothing and accessories

Human Capital Management

As of January 29, 2022, we had approximately 9,200 employees, including 5,200 full-time and 4,000 part-time.

In the United States, there were no employees subject to union contracts.

In Canada, we employ approximately 17 warehouse employees under a union contract, which will expire in October 2022.

The Company’s success depends on our ability to attract, develop, motivate and retain qualified management, administrative, product design and development and sales and marketing personnel to support existing operations and future growth.

Our values – Passion, Accountability, Curiosity, Creativity and Caring, inform how we work, how we treat one another and how we live our mission.

Compensation Programs and Employee Benefits

We believe that pay, benefits and incentives make up the total rewards package and provide employees and their families with financial protection and security for the future.

Our compensation programs are designed to encourage and reward our executives and associates for superior performance and drive long-term shareholder value.

We offer a comprehensive benefits package to our employees that provides, among other benefits, competitive salaries and wages;

comprehensive health insurance coverage to eligible employees;

retirement plans;

education assistance;

paid time off;

parental bonding leave;

adoption benefits;

and charitable giving opportunities through the Caleres Cares Charitable Trust, including volunteer opportunities and our matching gift program.

Health and Safety

Our associates make health and safety a daily priority at our stores, distribution centers, offices and factories.

Newly hired associates are required to attend a health and safety training as part of the onboarding process and they receive a variety of relevant training and information throughout the year.

Our guidelines cover many common elements such as physical safety and security, workplace violence, emergency procedures, incident reporting protocols, first aid and other general health and safety topics.

All of our retail associates receive training in accordance with our Occupational Health and Safety Program, which provides for both their safety and that of our customers.

Our corporate offices support the well-being of our associates with on-site amenities such as a fitness center and a registered dietician that is available for consultations.

During 2021, we also offered our corporate associates paid time off to get the COVID-19 vaccine.

Diversity, Equity and Inclusion

Caleres was founded on the insight that people are unique, and we are proud of our inclusive and collaborative environment where differences are celebrated.

We believe that Caleres should be as diverse as the people and communities we serve.

We are committed to recruiting talented individuals from all backgrounds, ethnicities, genders, lifestyles and belief systems and developing diverse candidate slates for every open position with leadership accountability.

The Diversity, Equity and Inclusion Council that was established in 2020 is focused on elevating awareness of diversity, equity and inclusion through its educational communications and trainings provided to our associates throughout the year.

In addition, our commitment to diversity, equity and inclusion is reflected in our Board of Directors.

As of January 29, 2022, we had 10 directors, of which 60% are female and 20% are racially and ethnically diverse.

Environmental, Social and Governance (“ESG”) Initiatives

Our ESG initiatives are an important component of our enterprise risk management program.

Our long-standing pledge to quality craftmanship includes creating sustainable and lasting value for all of our stakeholders.

Our ESG Steering Committee is responsible for developing programs, goals and metrics to support our ESG initiatives.

In 2019, we engaged a third-party consultant to help us assess factors that are most significant to Caleres and its stakeholders.

The following categories were identified as most material and provide the framework for our ESG initiatives:

Brand Portfolio

Sustainable Product Offerings

Supply Chain Labor Standards

Materials Recovery/Waste Reduction

Facility Energy and Emissions

Many of our ESG goals focus on high impact areas of opportunity, such as the materials that are used in our products, their byproducts and supply chain labor standards.

We are striving to use environmentally preferred materials to produce all of our products and packaging, and we will ensure all of our strategic factories around the world comply with leading global work standards.

During the first quarter of 2021, we published our inaugural corporate ESG report, which was nationally recognized on Newsweek’s Most Responsible Companies list and ranked in the top 10 for the consumer goods category.

The report detailed our ESG strategy and provided our goals for sustainable products and practices.

This report may be accessed at www.caleres.com/about/esg.

The information contained on our website is not incorporated by reference into this Form 10-K and should not be considered part of this report.

We expect to publish another ESG report in April 2022, detailing our progress toward our identified target goals, which we seek to achieve by 2025.

With many companies operating traditional brick and mortar retail shoe stores and departments and e-commerce businesses, we compete in a highly fragmented market.

In addition, the continuing consumer shift to online and mobile shopping has increased price competition and requires retailers to lower shipping costs charged to customers, improve shipping speeds and optimize mobile platforms.

Our competitors include local, regional and national shoe store chains, department stores, discount stores, mass merchandisers, numerous independent retail operators of various sizes and e-commerce businesses.

Quality of products and services, store location, trend-right merchandise selection and availability of brands, pricing, marketing, advertising and consumer service are all factors that impact retail competition.

In addition, our wholesale customers sell shoes purchased from competing footwear suppliers.

Those competing footwear suppliers own and license brands, many of which are well-known and marketed aggressively.

Many retailers, who are our wholesale customers, source directly from factories or through agents.

The wholesale footwear business has low barriers to entry, which further intensifies competition.

FAMOUS FOOTWEAR

Our Famous Footwear segment is one of America’s leading family-branded footwear retailers, with $1.7 billion in net sales for 2021.

Famous Footwear employs an omni-channel approach to reach consumers wherever they want to shop, including our growing e-commerce channel through famousfootwear.com and famousfootwear.ca, as well as nearly 900 Famous Footwear retail locations.

Our core consumers are those who seek leading national brands of athletic, casual and fashionable footwear at a value for themselves and their families.

Our Famous Footwear segment is one of America’s leading family-branded footwear retailers.

Famous Footwear employs an omni-channel approach to reach consumers wherever they want to shop, including our e-commerce channel through famousfootwear.com and famousfootwear.ca, as well as nearly 900 Famous Footwear retail store locations.

Our core consumers are those who seek leading national brands of athletic, casual and fashion footwear at a value for themselves and their families.

Famous Footwear features a wide selection of brand name athletic, casual and dress shoes for the entire family.

Brands carried include, among others, Nike, Skechers, adidas, Vans, Crocs, Converse, Puma, Birkenstock, New Balance, Under Armour, Asics, Timberland, Bearpaw, Sperry and Dr.

Martens, as well as company-owned and licensed brands including, among others, Blowfish Malibu, LifeStride, Dr.

Scholl’s Shoes, Naturalizer, Rykä, Zodiac, Circus by Sam Edelman and Franco Sarto.

Brands carried include Nike, Skechers, adidas, Vans, Crocs, Converse, Puma, Birkenstock, New Balance, Under Armour, Dr.

Martens, Asics, Timberland, Bearpaw, Skechers, and HeyDude, as well as company-owned and licensed brands including LifeStride, Dr.

Scholl’s Shoes, Blowfish Malibu and Naturalizer, among others.

Our Company-owned and licensed products are sold to our Famous Footwear segment by our Brand Portfolio segment at a profit and represent approximately 6% of the Famous Footwear segment’s net sales.

We work closely with our vendors to provide consumers with fresh product and, in some cases, product exclusively designed for and available only at Famous Footwear.

Famous Footwear’s retail price points typically range from $20 for shoes up to $260 for boots.

We believe we have strong relationships with our significant branded footwear suppliers, but the loss of any one or more suppliers could have a material impact on our Famous Footwear segment and the Company.

Famous Footwear’s retail price points typically range from $20 for shoes to $300 for boots.

We believe we have strong relationships with our significant branded footwear suppliers, but the loss of any one or more key suppliers could have a material impact on our Famous Footwear segment and the Company.

Famousfootwear.com and famousfootwear.ca offer an expansive product assortment, beyond what is sold in our retail stores.

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Orders are typically ready within an hour through this convenient service.

Our retail store locations also fulfill approximately half of all e-commerce orders not picked up in the store.

Our retail store locations also fulfill approximately two-thirds of all e-commerce orders not picked up in the store.

Leveraging our brick-and-mortar store inventory reduces delivery times, driving an enhanced consumer experience.

We continue to enhance our digital technology and e-commerce platform, as well as add new features to the Famous Footwear Rewards mobile application to deliver a superior experience for our customers who visit Famous Footwear on a mobile device.

Famous Footwear also has an extensive customer loyalty program, Famously You Rewards (“Rewards”), which informs and rewards members with free shipping and bonus points for online purchases, product previews, earned incentives based upon purchase continuity and other periodic promotional offers.

Our e-commerce websites allow members of Rewards to view their points status and purchase history, manage profile settings and engage further with the brand.

Famous Footwear also has an extensive customer loyalty program, Famously You Rewards (“Rewards”), which informs and rewards members with free shipping and bonus points for online purchases, product previews, incentives based upon purchase continuity and other periodic promotional offers.

Our Famous Footwear websites allow members of Rewards to view their points status and purchase history, manage profile settings and engage further with the brand.

Famous Footwear’s mobile app also serves as a hub for Rewards members to shop, find local stores, redeem Rewards certificates and learn about the newest products, latest trends and hottest deals.

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Regional malls

We expect to open approximately 20 new stores and close approximately 30 stores in 2022, as we continue to align our real estate and e-commerce strategies.

We anticipate that our retail store count in 2023 will be approximately flat to the ending store count for 2022.

New stores typically experience an initial start-up period characterized by lower sales and operating earnings than what is generally achieved by more mature stores.

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Famous Footwear also uses regional third-party pooled distribution sites across the country.

Famous Footwear’s marketing programs include e-commerce advertising, digital marketing and social media, direct mail and in-store advertisements, all of which are designed to further develop and reinforce the Famous Footwear concept and strengthen our connection with consumers.

Famous Footwear’s marketing programs include e-commerce advertising, digital marketing and social media, direct mail and in-store advertisements, all of which are designed to further develop and reinforce the Famous Footwear brand and strengthen our connection with consumers.

We believe the success of our marketing campaigns is attributable to highlighting key categories and tailoring the timing of such messaging to adapt to seasonal shopping patterns.

we spent approximately $59.5 million to advertise and market Famous Footwear to our target consumers, a portion of which was recovered from suppliers.

In 2022, we spent approximately $62.6 million to advertise and market Famous Footwear to our target consumers, a portion of which was recovered from suppliers.

BRAND PORTFOLIO

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Certain of our branded footwear products are sold under brand names that are owned by the Company and others are developed pursuant to licensing agreements.

Our Brand Portfolio segment sells footwear on a wholesale basis to retailers.

The segment also sells footwear on a direct-to-consumer basis through our branded retail stores and e-commerce businesses.

Our Brand Portfolio segment also sells footwear on a direct-to-consumer basis through our branded retail stores and e-commerce businesses.

Portfolio of Brands

The following is a listing of our principal brands and licensed products:

Since 2004, Sam Edelman has been synonymous with aspirational luxury and irreverent, trend-on style.

The following is a listing of our owned brands and licensed products:

Since 2004, Sam Edelman has been synonymous with aspirational luxury and on-trend style.

Inspired by timeless American elegance, designer Sam Edelman’s innate understanding of the customer translates conceptually into a modern lifestyle informed by rich heritage, creativity and innovation.

Beyond its iconic footwear, Sam Edelman offers an ever-expanding range of product categories to fit the customer’s lifestyle including dresses, fragrance, outerwear, denim, handbags, small leather-goods, sunglasses and children’s shoes.

Beyond its iconic footwear, Sam Edelman offers an ever-expanding range of product categories to fit the customer’s lifestyle including dresses, ready-to-wear, outerwear, denim, belts, small leather-goods and children’s shoes.

The full range of Sam Edelman product is sold through Sam Edelman retail stores and online at samedelman.com, in addition to department stores, national chains and independent retailers around the world at suggested retail price points from $100 to $300.

In October 2018, we acquired Vionic to expand our access to the growing contemporary comfort footwear category.

Vionic brings together style and science, combining innovative biomechanics with the most coveted trends.

Bridging the fashion gap with supportive and stylish offerings, Vionic designs its innovative Three-Zone Comfort footbed technology into every shoe it makes, delivering podiatrist-developed stability, cushioning and the ultimate in arch support.

As pioneers in foot health with a global team of wellness experts behind the brand, Vionic brings a fresh perspective to “feel great, look great” footwear that champions more vibrant lifestyles for women and men.

In 2018, we acquired Vionic to expand our access to the growing contemporary comfort footwear category.

Vionic is dedicated to harnessing science, ingenuity and input from medical professionals, athletes and raving fans to make shoes that bring balance to our lives.

The fusion between dynamic movement and grounded stability is how our exclusive Vio Motion Technology solves whole body balance.

Featuring a wide range of silhouettes, premium materials and thoughtful design for women and men, Vionic offers the style you want with the comfort you crave across a vast selection of fashion sneakers, casual and dress options, all-weather boots, sandals and slippers.

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Since 1927, Naturalizer has crafted beautiful and modern styles that look and feel exceptional, inside and out.

Our legendary emphasis on fit and elegant simplicity launched a brand that became known as “the shoe with the beautiful fit.” Our Naturalizer brand is sold primarily at national chains, online retailers, online at naturalizer.com and naturalizer.ca, department stores, independent retailers and its two flagship retail stores.

Naturalizer footwear is also distributed through wholesale partners in 34 countries around the world and approximately 45 retail stores.

Suggested retail price points range from $69 for shoes to $240 for boots.

Blowfish Malibu:

In July 2018, we acquired a controlling interest in Blowfish Malibu and in November 2021, we acquired the remaining interest.

Blowfish Malibu, which was founded in 2005, designs and sells women’s and children’s footwear that captures the fresh youthful spirit and casual living that is distinctively Southern California.

The brand is sold at national chains, our Famous Footwear stores and independent retailers.

Suggested retail price points range from $35 for shoes to $90 for boots.

Allen Edmonds:

In 2016, we acquired Allen Edmonds to increase our penetration in men’s footwear.

Allen Edmonds, founded in 1922, is a brand of premium men’s footwear, apparel, leather goods and accessories, built on its United States manufacturing heritage.

Allen Edmonds products are available at our 56 Allen Edmonds stores in the United States, online at allenedmonds.com and at select retailers worldwide at suggested retail price points from $245 for shoes to $495 for boots.

For more than 70 years, LifeStride has created quality footwear for women who value both style and all-day comfort.

LifeStride is made for the woman on-the-go, with SoftSystem comfort in every shoe, so she does not have to sacrifice comfort or style for the price.

The brand is sold in national chains, our Famous Footwear retail stores, online, including lifestride.com, and department stores at suggested retail price points ranging from $60 for shoes to $130 for boots.

Scholl’s Shoes:

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We have a long-term license agreement to sell Dr.

Scholl’s Shoes, which is renewable through December 2026 for sales in the United States, Canada and Latin America.

Allen Edmonds:

In 2016, we acquired Allen Edmonds to increase our penetration in men’s footwear.

Allen Edmonds, founded in 1922, is a U.S.-based direct-to-consumer and wholesaler of premium men’s footwear, apparel, leather goods and accessories with a strong manufacturing heritage.

Allen Edmonds products are available at our 61 Allen Edmonds stores in the United States, online at allenedmonds.com and at select retailers worldwide at suggested retail price points from $245 for shoes to $495 for boots.

For more than 70 years, LifeStride has created quality footwear for women who value both style and all-day comfort.

The brand is sold in national chains, our Famous Footwear retail stores, online, including lifestride.com and department stores at suggested retail price points ranging from $60 for shoes to $130 for boots.

Scholl’s Shoes in the United States, Canada and Latin America.

Blowfish Malibu:

In 2018, we acquired a controlling interest in Blowfish Malibu and in November 2021, we acquired the remaining interest.

Blowfish Malibu, which was founded in 2005, designs and sells women’s and children’s footwear that captures the fresh youthful spirit and casual living that is distinctively Southern California.

The brand is sold at national chains, our Famous Footwear stores and independent retailers.

Suggested retail price points range from $30 for shoes to $90 for boots.

Franco Sarto:

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The brand is sold in major national chains, online, including francosarto.com, department stores, specialty retailers, our Famous Footwear retail stores and independent retailers at suggested retail price points from $99 for shoes to $280 for boots.

For over 30 years, Rykä has been innovating athletic footwear exclusively for women.

For over 30 years, Rykä has been innovating athletic footwear exclusively for a woman’s foot.

Rykä offers footwear to serve her needs for walking, running and hiking along with lifestyle trends.

The brand is distributed through national chains, online retailers, including ryka.com, independent retailers, department stores, specialty retailers and our Famous Footwear retail stores at suggested retail price points from $80 to $145.

The Vince women’s shoe collection launched in 2012 and was expanded in 2014 to include the Vince men’s footwear collection.

Vince creates elevated yet understated pieces for every day.

The brand is primarily sold in premier department stores, online, national chains and specialty retailers at suggested price points from $275 for shoes to $595 for boots.

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The brand is distributed through national chains, department stores, online retailers including bzees.com, independent retailers, specialty retailers and our Famous Footwear retail stores at suggested retail price points from $80 for shoes to $130 for boots.

The Zodiac brand was launched in the late 1970s and acquired by us in 2005.

In July 2019, we initiated a brand refresh by blending the past with the present to provide authentic, quality footwear that is supremely relevant for today’s modern and expressive consumer lifestyles.

The brand relaunched in 2020 and Zodiac is now available at major national chains, online retailers, including zodiacshoes.com, and our Famous Footwear retail stores at suggested retail price points ranging from $69 for sandals to $149 for boots.

Veronica Beard:

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The brand is distributed through domestic wholesale partners carrying Veronica Beard ready-to-wear and independent footwear retailers at suggested retail price points ranging from $295 for shoes to $550 for boots.

We have a license agreement to produce footwear through December 2024.

We have a license agreement to sell footwear through December 2024.

The Zodiac brand was launched in the late 1970s and acquired by us in 2005.

In 2019, we initiated a brand refresh by blending the past with the present to provide authentic, quality footwear that is supremely relevant for today’s modern and expressive consumer lifestyles.

Within our Brand Portfolio segment, our brands are distributed on a wholesale basis to approximately 4,600 retailers, including online retailers, national chains, department stores, mass merchandisers and independent retailers throughout the United States and Canada, as well as approximately 70 other countries (including sales to our retail operations).

Our most significant wholesale customers include Famous Footwear and many of the nation’s largest retailers, including online retailers such as Amazon.com, Nordstrom.com, Macys.com and Zappos.com;

national chains such as DSW, TJX Corporation (including TJ Maxx and Marshalls), Nordstrom Rack, Ross Stores and Kohl’s;

national chains such as Nordstrom Rack, DSW, TJX Corporation (including TJ Maxx and Marshalls), Kohl’s and Ross Stores;

department stores such as Nordstrom, Macy’s and Dillard’s;

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and independent retailers such as Qurate Retail Group, which operates QVC, Home Shopping Network and Zulily.

Many of these wholesale customers also sell our products through their own websites, in addition to their retail store network.

Many of these wholesale customers also sell our products through their own websites.

In these arrangements, orders are typically fulfilled on a drop-ship basis from our logistics network.

We also sell product to a variety of international retail customers

and distributors.

We also sell product to a variety of international retail customers and distributors.

The loss of any one or more of our significant customers or brands could have a material impact on our Brand Portfolio segment and the Company.

Our Brand Portfolio segment sold approximately 38 million pairs of shoes on a wholesale basis during 2021.

We sell footwear to wholesale customers on both a landed and a first-cost basis.

Landed sales are those in which we obtain title to the footwear from our overseas suppliers and maintain title until the footwear clears United States customs and is shipped to our wholesale customers.

Landed sales generally carry a higher profit rate than first-cost sales as a result of the brand equity associated with the product along with the additional customs, warehousing and logistics services provided to customers and the risks associated with inventory ownership.

To allow for the prompt shipment of reorders and to satisfy our growing e-commerce demand, we carry inventories of certain styles.

First-cost sales are those in which we obtain title to footwear from our overseas suppliers and typically relinquish title to customers at a designated overseas port.

Many of these customers then import this product into the United States.

Our Brand Portfolio segment sold approximately 37 million pairs of shoes on a wholesale basis, either landed or first-cost, during 2022.

Products sold under license agreements accounted for approximately 12% of the sales of the Brand Portfolio segment in 2022, 13% of the segment’s sales in 2021 and 15% of the segment’s sales in 2020.

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At the end of 2022, we operated 56 Allen Edmonds stores in the United States, each averaging approximately 1,550 square feet.

We expect to close approximately five Allen Edmonds stores in 2022, as we continue to align our real estate and e-commerce strategies.

We operated seven Sam Edelman stores in the United States and 16 in China at the end of 2021, each averaging approximately 2,300 square feet.

After closing the majority of our Naturalizer retail stores at the beginning of 2021, we ended the year with two flagship Naturalizer stores in the United States.

We anticipate expanding our Sam Edelman and Naturalizer presence in China in 2022 with the opening of approximately 14 Sam Edelman stores and two Naturalizer stores.

We expect to open approximately two new stores and close approximately one Allen Edmonds store in 2023, as we continue to align our real estate and e-commerce strategies.

We operated six Sam Edelman stores in the United States, each averaging approximately 2,200 square feet, and 28 stores in China at the end of 2022.

After closing the majority of our Naturalizer retail stores at the beginning of 2021, we ended the year with one flagship Naturalizer store in the United States and one store in China.

We anticipate expanding our Sam Edelman presence in China in 2023 with the opening of approximately nine new stores.

We continue to build on the recognition of our portfolio of brands to create differentiation and consumer loyalty.

Our marketing teams are responsible for the development and implementation of innovative marketing programs that serve the consumer facing needs of our portfolio of brands as well as that of our retail partners.

In 2021, we spent approximately $50.2 million in advertising and marketing support for our Brand Portfolio segment, including digital marketing and social media, consumer media advertising, print, production, product placement, trade shows and in-store displays.

In 2022, we spent approximately $62.3 million in advertising and marketing support for our Brand Portfolio segment, including digital marketing and social media, consumer media advertising, print, production, product placement, in-store displays and trade shows.

The marketing teams are also responsible for driving the development of branding and content for our brand websites.

We continually focus on enhancing the effectiveness of these marketing efforts through consumer insights, market research, product development and marketing communications that collectively address the ever-changing lives and needs of our consumers.

Our marketing teams are instrumental in continuing to drive growth in e-commerce sales, producing relevant and purpose-driven brand positioning and creating meaningful connections with consumers that have increased awareness

and loyalty across our portfolio.

We continue to leverage consumer insights and data to inform marketing initiatives to capture a greater share of our target consumers’ spend as well as reach new audiences with a high propensity to purchase our products.

Product Development, Sourcing and Manufacturing Operations

We develop and source footwear for our Brand Portfolio segment.

We have sourcing and product development offices in Clayton, Missouri;

Dongguan, China;

Putian, China;

San Rafael and Culver City, California;

New York, New York;

Port Washington, Wisconsin;

Florence, Italy;

Ho Chi Minh City, Vietnam and Hong Kong.

In addition, we have manufacturing facilities in Port Washington, Wisconsin and Santiago, Dominican Republic that manufacture our Allen Edmonds footwear.

Product Development Operations

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We operate a sample-making facility in Dongguan, China that allows us to have greater control over our product development in terms of accuracy, execution and speed-to-market.

Our long-range plans include further expansion into new markets outside of China, particularly those in Vietnam, growing our use of 3D design technology in developing new product, and continuing to drive excellence in product value and execution in a rapidly changing manufacturing landscape.

Our distribution center campus in Chino, California, which opened in 2018, provides additional shipping flexibility, operational efficiencies and an expansion of our logistics infrastructure capacity.

Sourcing Operations

Our long-range plans include further expansion into new markets outside of China, particularly those in Vietnam, and continuing to drive excellence in product value and execution in a rapidly changing manufacturing landscape.

Sourcing and Manufacturing Operations

In 2022, the sourcing operations sourced approximately 35.4 million pairs of shoes through a global network of third-party independent footwear manufacturers.

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The following table provides an overview of our sourcing by country in 2022:

Manufacturing

While we source the majority of our footwear from independent footwear manufacturers as discussed above, we also maintain and operate manufacturing facilities in Port Washington, Wisconsin and Santiago, Dominican Republic.

While we source the majority of our footwear from independent footwear manufacturers, we also maintain and operate manufacturing facilities in Port Washington, Wisconsin and Santiago, Dominican Republic.

These facilities manufacture footwear and certain accessories for our Allen Edmonds brand.

We believe operating our own manufacturing facilities in North America provides us with greater control over the quality and craftsmanship that are essential to the iconic Allen Edmonds brand.

In addition, our Port Washington facility serves our recrafting operations, which allows the Allen Edmonds consumer to extend the life of their footwear, restoring their shoes to nearly their original state.

At January 29, 2022, our Brand Portfolio segment had a backlog of unfilled wholesale orders of approximately $452.4 million, compared to $218.2 million on January 30, 2021.

In addition, our Port Washington facility serves our recrafting operations, which furthers our commitment to sustainability.

Our recrafting operations allow the Allen Edmonds consumer to extend the life of their footwear, restoring their shoes to nearly their original state.

Most styles can be recrafted twice, and some can be recrafted three times.

At January 28, 2023, our Brand Portfolio segment had a backlog of unfilled wholesale orders of approximately $284.6 million, compared to $452.4 million as of January 29, 2022.

Most orders are for delivery within the next 90 to 120 days.

Orders are subject to cancellation;

however, with the exception of the cancellations we experienced in 2020 associated with the impact of the COVID-19 pandemic on our wholesale partners, we have not experienced significant cancellations of orders.

The increase in our backlog order levels reflects the delayed receipt of inventory due to global supply chain disruptions and higher demand.

Depending on the timing of receipt of this inventory, certain customers may request price concessions or choose to cancel their orders.

The backlog at any particular time is affected by a number of factors, including supply chain disruptions as mentioned previously, seasonality and capacity shifts at international manufacturers.

We are actively working to diversify and leverage our sourcing model to help offset the impact of the supply chain challenges, but expect the disruptions to continue into 2022.

however, with the exception of the cancellations we experienced in 2020 associated with the impact of the coronavirus pandemic on our wholesale partners, we have not experienced significant cancellations of orders.

The decrease in our backlog order levels reflects the return of the global supply chain back to pre-pandemic efficiency, as well as more conservative buying by our wholesale customers as they more tightly manage their inventory levels.

In addition, due to supply chain constraints during 2021, retailer inventory was lower and backlog levels were higher at January 29, 2022.

The backlog at any particular time is affected by a number of factors, including supply chain disruptions, seasonality and capacity shifts at international manufacturers.

Accordingly, a comparison of backlog from period to period may not be indicative of eventual actual shipments or the growth rate of sales from one period to the next.

Human Capital Management

As of January 28, 2023, we had approximately 9,300 employees, including 5,300 full-time and 4,000 part-time.

In the United States, there were no employees subject to union contracts.

In Canada, we employ approximately 17 warehouse employees under a union contract, which will expire in October 2025.

Since our founding in 1878, we have been all about the right fit.

But it starts in the heart – right within our Company’s culture.

Our values – Passion, Accountability, Curiosity, Creativity and Caring, inform how we work, how we treat one another and how we live our mission.

Compensation Programs and Employee Benefits

We believe that pay, benefits and incentives make up the total rewards package and provide employees and their families with financial protection and security for the future.

Our compensation programs are designed to encourage and reward our executives and associates for superior performance and drive long-term shareholder value.

We offer a comprehensive benefits package to our associates that provides, among other benefits, competitive salaries and wages;

comprehensive health insurance coverage to eligible employees;

retirement plans;

education assistance;

paid time off;

parental bonding leave;

adoption benefits;

and charitable giving opportunities through the Caleres Cares Charitable Trust, including volunteer opportunities and our matching gift program.

Health and Safety

Our associates make health and safety a daily priority at our stores, distribution centers, offices and factories.

Newly hired associates are required to attend health and safety training as part of the onboarding process and they receive a variety of relevant training and information throughout the year.

All of our retail associates receive training in accordance with our Occupational Health and Safety Program, which provides for both their safety and that of our customers.

Our corporate offices support the well-being of our associates with on-site amenities such as a fitness center and a registered dietician that is available for consultations.

Diversity, Equity and Inclusion

Caleres was founded on the insight that people are unique, and we are proud of our inclusive and collaborative environment where differences are celebrated.

We believe that Caleres should be as diverse as the people and communities we serve.

Our Diversity, Equity and Inclusion Council is focused on elevating awareness of diversity, equity and inclusion through its educational communications and events, as well as trainings provided to our associates throughout the year.

In addition, our commitment to diversity, equity and inclusion is reflected in our Board of Directors.

As of January 28, 2023, we had 11 directors, of which 55% are female and 18% are racially and ethnically diverse.

Environmental, Social and Governance (“ESG”) Initiatives

Our ESG initiatives are an important component of our enterprise risk management program.

Our long-standing pledge to quality craftmanship includes creating sustainable and lasting value for all of our stakeholders by governing and operating with integrity and transparency and by pursuing ambitious ESG targets.

Our ESG Steering Committee is responsible for developing programs, goals and metrics to support our ESG initiatives.

We conducted an assessment to determine those areas of our operations that are most important to Caleres and our stakeholders, which in turn guided the framework for our ESG initiatives.

Many of our ESG goals focus on high impact areas of opportunity, such as the materials that are used in our products, their byproducts and supply chain labor standards.

We are striving to use environmentally preferred materials to produce all our products and packaging, and we will ensure all of our strategic factories around the world comply with leading global work standards.

In April 2022, we published our second ESG report, which was once again nationally recognized on Newsweek’s Most Responsible Companies list and ranked 11 th in the consumer goods category.

The report detailed our ESG strategy and provided our goals for sustainable products and practices and highlighted our progress toward our identified target goals, which we seek to achieve by 2025.

Our ESG reports may be accessed at www.caleres.com/about/esg.

The information contained on our website is not incorporated by reference into this Form 10-K and should not be considered part of this report.

We expect to publish another ESG report in April 2023.

With many companies operating traditional brick-and-mortar retail shoe stores and departments and e-commerce businesses, we compete in a highly fragmented market.

In addition, our wholesale customers sell shoes purchased from competing footwear suppliers.

Those competing footwear suppliers own and license brands, many of which are well-known and marketed aggressively.

Many retailers, who are our wholesale customers, source directly from factories or through agents.

The wholesale footwear business has low barriers to entry, which further intensifies competition.

Our business is seasonal in nature due to consumer spending patterns with higher back-to-school and holiday season sales.

Although the third fiscal quarter has historically accounted for a substantial portion of the Company’s earnings for the year, we have experienced more equal distribution among the quarters in recent years.

AVAILABLE INFORMATION

10 unchanged sentences

Current Position

Chief Executive Officer and Chairman of the Board of Directors

Vice President, General Counsel and Secretary

Executive Chair

President, Chief Executive Officer and Director

Senior Vice President, General Counsel and Secretary

Senior Vice President, Chief Financial Officer

Division President – Famous Footwear

Chief Sourcing Officer

Senior Vice President, Chief Financial Officer

Senior Vice President, Chief Accounting Officer

4 unchanged sentences

The period of service of each officer in the positions listed and other business experience are set forth below.

Sullivan, Chief Executive Officer and Chairman of the Board of Directors since February 2014.

Sullivan, Executive Chair since January 2023.

Chief Executive Officer and Chairman of the Board of Directors from February 2014 to January 2023.

President and Chief Executive Officer from May 2011 to November 2020.

1 unchanged sentence

President from January 2004 to March 2006.

Schmidt , President since December 2020.

Schmidt , President, Chief Executive Officer and Director since January 2023.

President from December 2020 to January 2023.

Division President – Brand Portfolio from October 2015 to December 2020.

3 unchanged sentences

Various positions, including Vice President, President, Group President of Wholesale Footwear for Nine West Group from September 1998 to February 2008.

Burke , Vice President, General Counsel and Secretary since August 2016.

Burke , Senior Vice President, General Counsel and Secretary since August 2016.

Vice President, Legal from December 2015 to August 2016.

1 unchanged sentence

Various positions at the Company, including Associate General Counsel and Director, Talent Management, from March 2001 to March 2012.

Calandra, Senior Vice President, Chief Financial Officer since September 2022.

Chief Financial Officer of a.k.a.

Brands in 2021.

Executive Vice President, Chief Financial Officer and Treasurer of Tailored Brands, Inc.

from 2017 to 2020.

Various executive finance positions, including Senior Vice President Corporate Finance and Investor Relations with Gap, Inc., from 2005 to 2016.

Edwards , Division President – Famous Footwear since November 2020.

8 unchanged sentences

from 2002 to July 2006.

Hannah , Senior Vice President, Chief Financial Officer since February 2015.

Executive Vice President and Chief Financial Officer of JC Penney Company, Inc.

from May 2012 to March 2014.

Executive Vice President and President–Solar Energy of MEMC Electronic Materials, Inc.

and had previously served as Executive Vice President and President–Solar Materials from 2009 to 2012.

Senior Vice President and Chief Financial Officer of MEMC Electronic Materials, Inc.

from 2006 to 2009.

Hasty , Senior Vice President, Chief Accounting Officer since January 2020.

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business