Macy’s Inc. (M) is opening what it calls the world’s largest women’s shoe department at its New York flagship store beginning this month. Barneys New York Inc. just opened a unisex shoe floor, and Saks Inc. (SKS) is expanding its 10022-SHOE concept at its main store and rolling it out to more branches.

Retailers are expanding and enhancing their shoe departments because the footwear business has become so lucrative, with sales per square foot and profit margins that top other categories.

A new generation of designers such as Tabitha Simmons is driving demand, following predecessors including Christian Louboutin, who made designing shoes cool, said Saks President Ronald Frasch. High fashion is coming into ladies’ shoes at prices as low as $100, and the most extreme designs are being adapted for mass consumption by reducing heels to 2 1/2-inches from 5 inches, said Deborah Rudinsky, a footwear-market analyst for Doneger Group, a New York-based trend forecasting firm.

“The shoe can take the center stage and lead the outfit,” said Robert Burke, founder of a namesake luxury-goods consulting firm in New York. “The interest level has continued to grow. I would say it is here to stay.”

The trend was born in the late 1990s and early 2000s, whenHBO’s “Sex and the City” made designers Louboutin, Manolo Blahnik and Jimmy Choo household names. Blahnik’s open-toed Sedaraby d’Orsay pumps and the red soles on Louboutin’s covered platform shoes became icons beyond the New York fashion world.

Recognizable Details

“It became visually apparent from 50 feet that someone was wearing Louboutin,” Burke said in a telephone interview. “It was a detail recognizable not just to the fashionistas, but the husband of the fashionista and the general public.”

Designers Roger Vivier, Walter Steiger and Giuseppe Zanotti helped stretch notions of how to marry form and function, paving the way for new designer names, including Simmons, Alexandre Birman and Nicholas Kirkwood. Jeffrey Campbell and Sam Edelman, who sell fashion shoes at $100 to $200, have helped make the trend more affordable.

Sales of women’s fashion footwear grew 1.1 percent to $21.9 billion in the 12 months ended in June, according to Port Washington, New York-based market research firm NPD Group Inc. While that lags behind the recent growth rates of 4.2 percent for apparel and 7 percent for handbags and luggage, shoes perform well in terms of store productivity and profitability.

“There is no question that shoes are the most productive in terms of sales per square foot,” Muriel Gonzalez, a Macy’s executive vice president, said in an interview, while declining to provide figures. The Saks flagship’s shoe floor in New York is surpassed in productivity only by the main floor, Frasch said in a telephone interview.

Shoe Margins

Shoes and handbags have gross margins as wide as 50 percent at luxury department stores, while women’s apparel has a maximum of 45 percent, according to Kurt Salmon, a New York-based retail consulting firm.

Improving the chains’ profitability through shoe sales may boost their shares’ relative values. Macy’s shares trade at a 40 percent discount to the 32-company Standard & Poor’s 500 Retailing Index on a price-to-earnings basis, according to data compiled by Bloomberg. Saks’s premium to the index has shrunk to 32 percent from this year’s high of 72 percent in January.

The retailers are pulling out the stops to make the shoe shopping experience what Frasch calls more “emotional.”

Macy’s is adding a Champagne and chocolate bar in the shoe department at its Herald Square flagship and is hiring runners to bring shoes to sales associates wielding handheld devices. Saks is adding a camera that will be pointed at shoppers’ shoes and display the images on a screen. Barneys New York has added more obscure designers who appeal to shoe fetishists.

300,000 Pairs

Macy’s 63,000 square-foot selling and stock space on the store’s second floor will carry 300,000 pairs of shoes, feature a designer shoe salon, bigger shop-in-shops for brands such as Coach and Michael Kors and include shoe closets inspired by New York neighborhoods such as the Upper East Side and SoHo. Women’s shoes had commanded 54,000 square feet on the fourth and fifth floors.

“We see a high degree of passion among our customers for shoes,” said the Cincinnati-based chain’s Gonzalez. “We wanted an opportunity to pull it all together in one cohesive statement.”

Saks, based in New York, is adding 7,000 square feet of selling space to its Fifth Avenue flagship’s 8th floor women’s shoe area and has created such 10022-SHOE departments at 11 of its stores with a plan to expand that to 15.

Women’s shoes accounted for 12 percent of Saks’s sales last year, compared with a combined 8.5 percent for men’s and women’s footwear in 2006, the year before the retailer opened its first 10022-SHOE department, named after the special New York zip code Saks obtained for it.

Barneys Department

Barneys New York in mid-July opened its new combined 22,000 square-foot, fifth-floor designer shoe department, adding 350 styles and increasing women’s space by almost 60 percent and men’s by almost 40 percent.

Shoes are less prone to markdowns because footwear is increasingly season-less -- women now even wear boots in the summer -- and ageless, with styles appealing to teenagers and older customers alike, Rudinsky said. Shoes also are easier to fit than clothes and can be worn more often.

Shoes are so prominent now that women increasingly are buying outfits to go with their shoes, rather than vice versa, Frasch said. Fashionistas, for example, have been pairing neutral clothes with currently popular neon shoes.

Designers are expressing themselves with bows and other embellishments, animal faces, signature heels, exotic skins and unusual combinations of materials, Burke said.

“It’s not just the stores that are a lot more open- minded,” said Simmons, the 39-year-old New York-based, U.K.- born designer whose shoes are known for corset-inspired lace-up backs. “The consumer wants to try new things.”