All companies face the constant tug-of-war between vision, growth and fiscal responsibility. But sustainable footwear and accessories company Rothy’s has a unique perspective on this, as one executive oversees these seemingly opposing sides of the business.

In a Rothy’s fireside chat video for WWD x FN x SJ business hub Retail Rx, Nikara Johns, senior editor at Footwear News, sat down with Dayna Quanbeck—who has the multiple title of COO, CFO and president at the growing company. Quanbeck admitted it can be quite a juggling act, but that even while focusing on efficiency, organization and fiscal responsibility (while wearing her CFO hat), she never wants to ‘kill the dream.’

“What I love is to let my team go big, and I know that we will always come back to a discipline and rigor that is rooted in everything we do, and that’s part of having a sustainable business. But I know that if I don’t support the big ideation, we can’t get the financials either,” she said.

Initially started as a digitally native footwear brand, Rothy’s has been growing at a rapid clip, adding stores, wholesale, a shop-in-shop in London, bags, as well as men’s and kid’s product. All this works different parts of Quanbeck’s brain.

“I have an ability, like most CFOs, to look around corners and seek correlation, cause and effect, data patterns, data recognition. [But] it’s not just the numbers… sometimes it’s technical, sometimes it’s creative. That comes with the team dreaming, and then we can get to tactics, then refinement.”

To learn more about Rothy’s and watch the full fireside chat, CLICK HERE.

Just call him the shoe chef.

“This is my kitchen and I like to play with different ingredients,” said Giuseppe Zanotti, during an interview in his stylish Via Montenapoleone showroom during Milan Fashion Week.

As the designer marks 30 years of his namesake label, he is looking back with a special capsule collection focusing on the iconic Ring sandal, a key style from the beginning. The look is reinterpreted in a classic flat and new block heel.

For spring ’25, the designer also explored his love of jewelry shoes, using an oversized gold nugget to decorate pumps and sandals. The ornamentation helps modernize the classic pump, according to the designer. “I like to create a fusion between shoes and accessories,” Zanotti said. “The gold nuggets with the open toe and block heel, for me it’s my ideal pump.”

Zanotti also showed off a sexy sandal, defined by its geometric lines and ’80’s aesthetic. “I love to do shoes that are seasonless and fashionless,” he said.

Elsewhere in the spring ’25 collection, details define the assortment — from delicate metal flowers to glittering crystals to gold dome plates. The signature pointed-toe Intriigo silhouette is updated with hand-woven leather knots, while ballerinas go from day to night.

As he cooks up his next collection, Zanotti is expanding his retail presence with a new space at Milan’s Rinascente department store.

This fall, the designer has also gotten a boost from none other than Taylor Swift, who wore his over-the-knee boots to two Kansas City Chiefs games in September. Zanotti said he’s proud to have worked with the songstress since the beginning of her career, but seeing her step out in his shoes time and again next gets old.

“She goes everywhere in these boots,” he said. “I’m so happy!”

Danny Wasserman, the retail visionary who turned his family’s Upper West Side store into an independent footwear institution, died on Saturday. He was 80.

After a recent fall at home, Wasserman had been recovering for a few days in a New York hospital and died unexpectedly after going into cardiac arrest, according to Lester, his son. “He was waiting for a bed at a rehab facility and had been saying he was going to check himself out the hospital,” the younger Wasserman said, of his dad’s determination to the end.

Danny was the guiding force at Tip Top Shoes for more than 50 years — from the moment he joined his own father, Max Wasserman, in the business.

“This industry meant everything to him — he loved the shoes, the vendors, the gossip,” said Lester. “It was all about the love.”

In 2025, Tip Top, located on West 72nd Street, will mark both the 85th anniversary of its founding and the 60th anniversary of Wasserman family ownership — no small feat at a time when it has never been harder to be an independent operator. (The family acquired the store from original owner Ruth Pfiferling.)

Wasserman took great pride in the retailer’s ability to differentiate itself with top-notch customer service. “We tell our staff that everything we have is available somewhere else,” he told FN in 2015. “The only thing [that separates] us is our service.”

A constant presence on the shop floor, Wasserman was eager to share his lessons with anybody who walked through Tip Top’s doors. “When Danny talked, people listened,” Lester said. Whether he was talking about hot product and trends or markdowns and inventory flow, Mr. Wasserman wasn’t bashful, his son said.

Wasserman was immensely proud that Lester and daughter Margot, the children’s shoe buyer, decided to follow in his footsteps and become co-owners. Together, the family expanded into the kids’ business with a standalone store that opened in 1988 and opened a sneaker boutique, West, in 2007.

Margot Wasserman remembered the daily texts she and her father exchanged about “everything and nothing.” Topics ranged from reordering the right shoes, “especially socks and inserts,” discussing the latest TV shows and what they had for dinner.

One important lesson that Wasserman taught his kids and many others about the shoe business: “If something is unique, it will have legs.”

At trade shows, Wasserman walked the halls from morning to night, often with an entourage in tow. “He wouldn’t have had it any other way,” Lester said on Sunday.

Wasserman took great pride in his ability to spot new brands and emerging industry trends.

“We were one of the first to have Ugg Australia and one of the first in the Northeast to carry Birkenstock. I also recognized MBT, Kork-Ease, Sbicca huaraches and Jacques Cohen espadrilles,” he told FN in 2015.

Industry players reached on Sunday remembered Wasserman as one of a kind.

“I’ve known him all my life. He was a friend, a father and mentor to me. He was the best teacher anyone could be,” said Tarek Hassan, CEO of Concepts, who recalled attending countless shows and buying appointments under the tutelage of Mr. Wasserman. “He lived the business. He understood people, product and brands. He had an incredible eye. There’s only one Danny.”

David Kahan, CEO of Birkenstock Americas, said Wasserman — who had German roots — was one of the brand’s first accounts.

“He loved to recount his history with Margot Fraser and Karl Birkenstock. He took a chance on the brand when no one else carried it,” Kahan said. “He literally brought it to NYC and put tens of thousands of local New Yorkers and tourists into our products, including many regular celebrity clients. He even sold Yoko Ono a pair she got for John Lennon. Even when COVID shut down NYC retail, he and Lester set up a table outside the store and sold Birkenstocks one at a time to passers by.”

Kahan and Wasserman developed a close friendship through the years. “I consider him a true mentor in the industry. I don’t think a week has gone by in 20 years that I didn’t talk or text with him multiple times,” Kahan said.

Wasserman is survived by his wife, Carol; children Lester and Margot; and three grandchildren.

A funeral will be held at 11 a.m. on Tuesday, Oct. 8 at Riverside Funeral Home in New York. Shiva will be observed during select hours Tuesday through Thursday at Margot and Lester’s residences. Email Lester Wasserman at lwasser579@mac.com for more details.

Excitement is building for this year’s Shoes for a Cure charity shoe sale, set for Oct. 23 to 27 at Chelsea Market.

The industry fundraiser, which was reimagined last year, is celebrating a big milestone — its 30th year raising critical funds for breast cancer research.

The event, which began as a tent sale in Central Park, has raised more than $60 million through its three decades.

This year, the sale has gathered 10,000 pairs of donated shoes in an upstate New York warehouse and will sell them at the 5-day sale, which is run by 325 volunteers and supporters. Key donors this year include Rack Room, Marc Fisher Footwear, Michael Kors, Deckers, DSW and Saks Fifth Avenue.

Birkenstock, New Balance and Ugg will be among the big brands on display at the sale.

The 2024 grant recipient is Dr Lisa Newman, a New York doctor who has spent her entire career researching the cure for breast cancer. Last year, Shoes for a Cure raised $600,000 to support Newman’s tireless efforts.

“The cause is incredible, the mission is pure and the doctor is amazing,” said Sandi Mines, president of the Fashion Footwear Charitable Foundation (FFCF).

Newman has also been focusing on ways to close the gap in breast cancer treatment for women of color.

To build buzz, Shoes for a Cure has also enlisted four influencers — with a combined reach of 1.7 million followers — to help spread the word about the cause.

Outside of the New York effort, Shoes for a Cure is launching a Miami event in partnership with the Miami Design District.

The one day charity shopping activation and private cocktail event, which is invitation only, is set for Oct. 17. Proceeds of Shoes for a Cure Miami will be directed to Braman Family Cancer Institute at Sylvester Comprehensive Cancer Center.

For more information, contact Sandi Mines at smines@fdra.org.

Shopbop CEO Kim Fleissner is expanding her role and will now lead Zappos as well, FN has learned.

The move, confirmed by a Zappos spokesperson late Friday, comes as the Las Vegas-based footwear e-tailer’s CEO Scott Schaefer prepares to exit the company on Nov. 1. Both Zappos and Shopbop are owned by Amazon.

Fleissner has been CEO of Madison, Wisc.-based Shopbop since May 2018.

“Kim is a long-tenured leader who will champion the unique culture and differentiators of the Zappos brand, ensuring it continues to deliver customer-focused growth,” the Zappos spokesperson said in a statement.

Schaefer is leaving “to pursue other interests.”

“We would like to thank Scott for his contributions to Zappos through the years and wish him well in his future endeavors,” the spokesperson said.

The move marks the third CEO change at Zappos in four years. In 2020, a few months before his death, Zappos co-founder Tony Hsieh left the CEO role, and Kedar Deshpande took over. In late 2021, Deshpande departed the company for Groupon, and Schaefer was appointed acting CEO for a short time before getting the permanent gig in April 2022.

Zappos — which has quietly cut hundreds of jobs in the past few years — has not been immune to the changes and challenges sweeping across both the footwear industry and e-commerce space. Not only have many brands doubled down on their own DTC efforts, but brick-and-mortar retail has made a major comeback in the post-pandemic era.

Interestingly, both Zappos and Shopbop made their debuts in 1999 and were pioneers in the e-commerce space.

This is a developing story. Check back for more.

Why did Danyelle Freeman, a former restaurant critic for The New York Daily News, venture into footwear? Out of necessity, said the founder of Le Seul, the new fashion comfort line she debuted during New York Fashion Week.

About five years ago, Freeman’s life was altered when her husband accidentally ran over her foot with a car. The injury and its aftermath caused permanent damage to her feet, and the entrepreneur said she searched everywhere to find shoes that she could walk in — and wanted to wear.

“I used to have a closet full of beautiful shoes, and this was such an extreme change for me,” she said. “I would look at other people’s feet with envy because I was stuck in orthotics. I started wearing only long dresses because I wanted to hide my shoes.”

Determined to find a solution, Freeman began to learn about the intricacies of orthotics and comfort technology. “I finally decided I would make shoes myself,” she said.

Freeman enlisted longtime shoe designer Paul Andrew as her mentor prior to his appointment as Sergio Rossi’s creative director earlier this year.

From there, she began the process of finding Italian factories, hiring designers and refining the technology and comfort aspects of the collection. (Le Seul, a play on the sole of the foot, translates to “The Only One.”)

Features of each shoe include a custom-made insole board, molded silicone gel for shock absorption and foam padding. Dr. David Hancock, a physiotherapist and strength coach, who has worked with Nike and the New York Knicks, serves as an advisor to the brand.

To jazz up the comfort features, Freeman decked out her quilted insole with the brand’s signature heart. And the block heels featured throughout the collection have a heart footprint design.

The spring ’25 collection of flats, sandals, pumps and wedges is inspired by flowers and features other embellishments such as bows. “I wanted them to be feminine and attractive, but timeless and very wearable,” Freeman said. Colors run the gamut from black, ivory and tan to bermuda blue, red and champagne.

Price points range from $550 to $1,250, and the founder is meeting with buyers during Paris Fashion week. In the coming months, she plans to open pop-ups around New York.

It’s certainly not an easy climate for independent shoe designers as the big ready-to-wear brands gobble up more market share. But Freeman, who is self funding the business, is undeterred.

“I’m in this to win and I’m very serious about it,” she said. “I’m offering something that’s a need, and I think it will resonate with people.”

Six years ago, Philéo Landowski didn’t know the first thing about making a shoe.

Now, he’s established himself as a footwear designer with his own label, a Comme des Garçons collaboration and a host of hookups with major sports specialists.

During Paris Fashion Week, he is also showing “Avalanche,” a site-specific collaboration with Japanese installation artist Tadashi Kawamata in the courtyard of Dover Street Market Paris, a project supported by Adidas.

“This brand has been my school, both in terms of understanding what I want in terms of design but also in how to speak with suppliers, craftspeople and even the designers I now work with,’ said the 22-year-old designer.

That said, things started pretty strong for his eponymous brand which made its formal debut in 2020 at Comme des Garçons’ Trading Museum in Paris.

A long-time sneakerhead, Landowski wanted to make his own, being as sustainable as possible, with retro-inflected chunky styles that played on textures and material mixes.

“What interests me in a shoe is its interaction with a space, and the artistic aspect of it,” he said. “But you can’t forget that it’s a product at the end and there’s biomechanical engineering at play.”

Launched thanks to an initial 15,000-euro bank loan, the brand broke even from its first commercial season.  

“After that, there were so many layers that built on top as I started wanting to work on structure, which is something I understood over time,” he recalls.

The unisex line, which ranges from French size 36 to 45 (or the U.S. equivalent to a women’s size 5 and up to a men’s 11), soon included derbies and mary-jane style shoes.

Soon enough, the designer was recruited in 2021 by outdoor specialist Salomon, becoming creative consultant working on its “sportstyle” design lines and artistic direction.

All this allowed Landowski the luxury of growing at its own pace, he said.

Landowski set up a gallery on Rue des Grands Augustins, in the heart of the artistic Saint-Germain-des-Prés area. This might be an unconventional choice for an edgy emerging label, but Landowski confessed a particular attachment to the area.

“My grandfather owned an art bookshop in the 6^th arrondissement, which is where I met [artist] Katerina Jebb who then introduced me to [Dover Street Market chief executive officer and Comme des Garçons International president] Adrian Joffe,” he said.

“I also found it pretty great to be so close to art galleries like Kamel Mennour and telling myself that if I wanted a breather, I could go spend an hour in front of [works by] Anish Kapoor or Kawamata,” he continued.

“There are plenty of small moments but there’s never a time where it clicked,” he said. “I don’t think that exists, to be honest. It’s a myth and that’s a good thing because [a brand] is made of all these moments.”

Even so, there’s one he’s not likely to forget: meeting Rei Kawakubo in 2022.

“I was starstuck,” he said. “Comme des Garçons is the pinnacle of what you can do in terms of fashion, one of the first brands that really marked my aesthetic with the fact that it could be entirely different from one season to the next and yet have this entirely refined DNA and this rigorous thoroughness in creation.”

Although he demurred on details, this spring 2023 encounter led making footwear for Comme des Garçons, including a derby with an XXL sole spreading outwards on the fall 2024 runway.

When Adidas came calling, he floated the idea of an installation to mark the opening of Dover Street Market Paris in the spring of 2024. “I wanted a real artistic intervention and not just a meaningless happening,” he said. “I contacted Kamel [Mennour] and asked him if working with Tadashi [Kawamata] – and it just happened.”

With it comes an Adidas Superstar 82 in leather that has been reworked with a hand-painted leather patina in black that will retail exclusively at Dover Street Market Paris from Thursday.

Ten seasons in, the Phileo brand is now distributed in 14 countries with close to 40 doors, including Kith and of course, Dover Street Market Paris – the brand is also in its showroom program – as well as the retail emporium’s London, Ginza, New York City and Los Angeles doors.

Europe remains the largest market for the label, accounting for over 40 percent of sales but Japan and the U.S. are also major contributors, at roughly 20 percent each.  

It’s a restrained footprint but one that feels healthy, he said. “The mistake we made at the beginning was opening [wholesale] accounts too easily,” he added.

There are some 3,000 pairs, spanning around 30 references across 15 designs, that come out of the family-owned factory based in Portugal Landowski has been working since the beginning.

The Paris-based designer has also started collaborating with fashion labels such as Rokh, Kidill and Louis Gabriel Nouchi, among those he can name.

It’s a process he particularly enjoys. “I need to work with other creatives around me, be influenced by people because I feel it ultimately gives a lot of depth to the product.”

For fall 2024, he also introduced the Phileo Artisanal line, a more formal offering where he wants full creative freedom.

“I wanted to push further on this idea of being sustainable and durability placed at the heart of creation,” he said.

In addition to commercial success, he’s also garnered attention from the French Ministry of Culture, which awarded him a bursary over the summer, and won the accessories prize of the Grand Prix de la Ville de Paris, awarded in September.

For the designer, the next step is solidifying the business.

“It’s held its own since the beginning and that’s great,” he said. “But now, it’s about being able to earn a living from it one day but at least continue to develop, to create and make it steady on the long run. For me, that’s more important than trying to make it into some kind of one-hit wonder that would make no sense.”

While overall U.S. attendance at Micam has waned in recent years, the buyers who were on the scene this week in Milan were upbeat about spring ’25 offerings — and vendors’ willingness to make deals.

“The show helps us to justify some of the designs our current vendors are showing us,” said Doug Becker, a third-generation family member at Becker Shoes, who is now leading the retailer with Bradley, his son. “We also look for new vendors that are not available in Canada to help round out our assortment. We are always trying to give our customers something a little different than other retailers may offer.”

Billy Lawson, owner of Shoe Inn — which has locations in New York, New Jersey and Connecticut — has been coming to Micam for four decades, and much of his time at the show has been spent alongside wife and co-owner Melissa Lawson. Now, with their son Peter leading day-to-day operations, Micam has become a true family affair.

“This time, we also brought my girlfriend and sister-in-law to give us some younger eyes,” Peter Lawson said, about their show strategy.

The family noticed a slightly dressier assortment from many vendors, with carryover trends like slingbacks, espadrilles and ballet flats continuing to dominate.

Here, more retailers sound off on their top picks and the advantages of attending Micam to set themselves apart.

Bradley Becker, co-owner, Becker Shoes

Top Trends: “We have seen a diverse number of styles and trends, but loafers are still dominant. Country music is super popular right now, and we are seeing this influence translate into many footwear lines. We can now find western boots available from most countries, and are able to retail these styles at more competitive prices than if we were to buy them from a North American distributor.”

Deal Making: “There is always a chance to negotiate quantities and pricing. The main goal of going to Micam, for us, is to dodge unnecessary markups from North American distributors, resulting in better margins and better retail pricing.”

Morgan Kunitz, co-owner, Kunitz Shoes

Top Trends: “Square-toe Mary Janes, and lots of patent. Beige is the new black and plenty of soft neutrals to go with it.”

Deal Making: “There are plenty of factories to work with, and whether it is minimums or customizations, they are open for business and willing to make it work.

Overall Takeaways: “When you are in the day-to-day of your business, it can be really hard to gain perspective. I always feel refreshed after attending Micam as it’s a great reset to come back and bring new ideas and inspiration to the business after witnessing the thriving footwear industry. Developing our private label has been not only been a profitable venture but an advertising tool.”

Janice Abernethy, president, Abbadabba’s

Top Trends: “Most vendors acknowledged that everyone wants — more than ever — to have the feel of a sneaker in all their footwear. In response, comfort elements such as padded, contoured insoles and thicker, shock-absorbent outsoles are now incorporated more often. The influence of the ‘sneaker sole’ is one that is obvious in many designs.”

Deal Making: “Most brands seemed very willing to work with smaller independents and are realizing the importance of ‘never out’ stock from which we can replenish our inventory.  It was refreshing to see that large quantity minimum orders were often not a requirement, and factories were able to accommodate smaller test orders.  Also, many vendors now have in place methods that are reliable, fast, and affordable for shipping to the U.S.  It seemed issues that had been stumbling blocks for independents had not only been addressed but eliminated, ensuring that ordering is far less risky, and timely delivery is far more assured.”

At a challenging time for the global footwear industry, it’s critical to give the next generation of shoemakers the right tools for success.

At the 98th edition of the Milan-based Micam show, which runs through Tuesday at Rho Fiera, organizers once again put the spotlight on emerging talent, with 12 up-and-coming designers featured at the trade fair. The show has also launched the “Micam Academy,” a new hands-on educational area in partnership with Politecnico Calzaturiero Veneto and Arsutoria School.

“Combining technological innovation, evolving styles, and craftsmanship, Micam represents a both a unique showcase and an unmissable opportunity to catch up on the very latest developments within the footwear industry,” said Giovanna Ceolini, chair of Micam and Assocalzaturifici. “It’s not just about setting trends — it’s about shaping the present and future of footwear.”

Matteo Pasca, who has been the director of Arsutoria School since 2003, said the idea of the Micam Academy was to highlight the tech innovations that are already benefiting students at Arsutoria and companies across the industry.

Different stations within the space showcase some of the school’s partners: Snapfeet, for example, is a FitTech app for footwear measurement and virtual fitting. As 3D shoes continue to evolve, Primsatech uses immersive reality visors to aid in the process. And Sneaknit is a system that constructs uppers with a knitting machine, eliminating the need for glue.

One of the hottest topics in the industry is around traceability in the supply chain as the European Union enforces new legislation. The ID Factory, which is also part of the Micam Academy, specializes in traceability software, something that many companies will need to rely on more and more. “A lot of brands are asking suppliers to bring every step of their production to Italy,” Pasca said.

Sustainability remains top of mind for designers on the rise, and a number of the emerging talents at the show said it’s their number one mission.

Guillaume Mesly D’arloz, head of brand and impact at French vegan brand Meeko, said he is positioning the brand’s sneakers — which use recycled materials — as durable, versatile, and most importantly, long-lasting.

As the brand looks to expand beyond France — it’s currently seeking a U.S. distributor — Mesly D’arloz is hoping to capitalize on the continued convergence of fashion and outdoor. About half of the collection is made in Portugal, while the other more tech-driven part is crafted in China, and some looks feature Vibram soles.

Daphne Wattiez, the founder of Akvo, is another new designer at the show this week. She is focusing on simple sandals and slides that take plastic and other harmful materials out of the equation. She spent about two years developing her own yarn uppers before finding a factory in Portugal to execute her vision.

In this week’s column, tech deals and investments are flowing…

WorkJam, the digital workforce solution provider, said it received a $20 million investment from Export Development Canada (EDC) to fuel its international expansion. The company plans to leverage the funding to bolster its market presence in Europe and Asia.

With a surge in global travel and increased demand for exceptional customer service, frontline workers across various industries are facing unprecedented challenges. WorkJam aims to address these issues by providing digital tools that empower employees, enhance productivity and boost job satisfaction.

“We are thrilled to partner with EDC as we embark on this exciting phase of growth,” said Steven Kramer, CEO of WorkJam. “This investment validates our mission to transform the frontline workforce and underscores the significant impact our platform has on businesses worldwide.”

WorkJam’s clients includes Fortune 500 companies operating in retail, hospitality, manufacturing, logistics and healthcare. The company’s platform offers a comprehensive suite of tools including scheduling, task management, communication and learning modules — designed to streamline operations and improve employee engagement.

“WorkJam is a shining example of Canadian tech innovation,” said Guillermo Freire, senior vice-president of EDC’s Mid-Market Group. “We are confident that this investment will propel WorkJam to new heights and solidify its position as a global leader in frontline workforce management.”

Blue Yonder Acquires One Network Enterprises

Looking to strengthen its position as a leader in digital supply chain innovations, Blue Yonder wrapped up its acquisition of One Network Enterprises. The deal was valued at approximately $839 million.

The acquisition comes at a time when retailers and brands face ongoing supply chain volatility and disruptions, which makes real-time operational visibility and agility crucial.

Duncan Angove, CEO of Blue Yonder, said the deal “is not just about expanding our technology but transforming how supply chains operate. Integrating One Network’s cutting-edge technology into the Blue Yonder platform supercharges our capabilities, giving our clients unparalleled visibility and control.”

Angove said with real-time insights, AI-driven analysis and improved collaboration across networks, “businesses can preempt disruptions and optimize performance across their supply chains.”

As a result of the acquisition, the Blue Yonder suite is now a multi-enterprise, multi-tier network ecosystem that enables customers to view inventory and capacities in real time, thereby ensuring better supply-demand matching and quicker disruption response.

AI-powered tools are used to aid in monitoring, analysis and problem resolution across the supply chain. Simplified processes for onboarding new trading partners enhance collaboration within a global network of over 150,000 partners, the company said, adding that One Network will continue to operate independently in providing bespoke technology solutions to its government clients.

“Today’s business environment demands that decisions be made swiftly and collaboratively across an increasingly complex network of partners,” Angove added. “The newly acquired capabilities from One Network are crucial for businesses looking to thrive amid the challenges of modern markets.”

Data Breach Costs Hit Record Highs

Businesses are facing a brutal reality: Data breaches are becoming increasingly disruptive and expensive, with the global average cost reaching a staggering $4.88 million in 2024, according to IBM’s annual Cost of a Data Breach Report. This marks a 10 percent increase from the prior year — and the largest yearly jump since the pandemic.

The report, conducted by Ponemon Institute and sponsored by IBM, analyzes real-world data breaches experienced by over 600 organizations globally. Some of the key findings:

Disruption Drives Up Costs: Lost business, customer support and third-party response costs are skyrocketing due to the significant disruption caused by breaches. Seventy percent of breached organizations reported experiencing major disruption, leading to higher overall costs.

Security Staffing Shortage Takes a Toll: Understaffed security teams are struggling to keep up with the evolving threat landscape. Organizations with severe staffing shortages saw breach costs climb to $5.74 million, significantly higher than those with adequate staffing.

AI Offers Hope, But Risks Remain: While organizations using security AI and automation saw lower breach costs and faster containment times, the rapid adoption of generative AI (gen AI) introduces new security vulnerabilities. Businesses need to invest in AI-driven defenses alongside addressing staffing shortages.

There were some positive developments, though.

The report found that AI is helping to speed up response time. IBM said security AI and automation are proving valuable tools, enabling organizations to detect and contain breaches 98 days faster on average. In addition, internal detection is making a difference. Researchers found that proactive internal detection by security teams led to shorter breach lifecycles and significant cost savings compared to breaches discovered by attackers. There’s also been an increased investment in security.