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As costs continue to rise and gross margins dwindle, footwear companies are targeting international growth and e-commerce to bring in revenue, reported WWD.

“Expanding in international markets is the key theme in terms of top-line growth for companies this year,” R.J. Hottovy, analyst at Morningstar Inc, told WWD. “The U.S. is pretty mature now in terms of footwear and other categories, so retailers and wholesalers are really looking overseas because there is a lot more spending power in emerging markets, and it keeps growing.”

Jeff Van Sinderen, analyst at B. Riley & Co., believes there could be a great market for American labels to make the jump to overseas sales.

“Different markets bring different opportunities, plus you can grow a business faster internationally because of the large scale,” he explained. “In contrast, launching a new brand in the U.S. ... would involve more expense when you factor in marketing costs.”

As the troubled economy continues, many labels are seeking to make their mark in emerging markets. Crocs Inc. president and CEO John McCarvel reports the largest potential expansion option in percentage terms is China, where the company is seeking to build its brand.

“Revenue from China grew 88 percent in the first quarter year-over-year, and we’re still underpenetrated in cities such as Chengdu. ... We have a good partner out there, so we really look to that market as an opportunity,” McCarvel said to WWD.

On the other hand, The Jones Group Inc. is considering Europe and Latin America for its expansion. Combined with extending the firm’s reach beyond footwear and apparel, Jones CEO Wesley Card hopes to “add incremental growth on top of a very big base business.”

“We like international [as it’s] an area where we’re underpenetrated,” Card said, noting the potential for growth in China, India, Russia and Brazil.

International expansion has paid off for Steven Madden Ltd., with global business having become its quickest-growing area. The company has just added a presence in India, the United Arab Emirates and the Benelux region, and Edward Rosenfeld, the firm’s chairman and CEO, is happy to report international sales have clocked in at least three consecutive quarters of more than 50 percent year-on-year revenue growth.

Deckers Outdoor Corp. has also seen profit rise through new markets. It has just experienced the “best first quarter ever” due to converting its U.K. and Benelux’s wholesale business to retail. It is now turning to Asia, where the region tops the list as having potential sites for the company’s new 15 planned stores.

Those firms seeking greater sales are also turning to e-commerce in droves, attracting by the Internet’s ability to reach a range of consumers and by fewer fixed costs in running an online business.

And it has paid off. In the first quarter, Timberland Co.’s North American e-commerce group increased by 43 percent, whereas Deckers’ international online business rose 27 percent to $23.5 million. Finish Line Inc. saw a 30 percent surge in Internet sales for fiscal year 2010.

“Growth there is going to be absolutely huge,” Van Sinderen said. “A lot of companies have e-commerce sales that contribute a single-digit percentage to consolidated revenue, and they think they can take it into the double digits. Selling things online also reaches consumers in other countries, which ties back to the growth opportunity in international.”

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