US: Shoe manufacturing declines 1.4% annually
09/05/2013
Analyst Nikoleta Panteva said: “Many companies have moved away from manufacturing footwear in the US and are focusing on designing, wholesaling and marketing branded shoes.”
The credit and financial crises of the past few years have led to low levels of consumer spending, affecting sales of discretionary items like shoes. Most large footwear manufacturers have already moved operations overseas, and so the rate of growth in international outsourcing is expected to stabilise.
Industry revenue is expected to inch up in 2013 to $2 billion, boosted by growth in downstream demand from wholesalers and retailers.
The number of footwear manufacturing companies has declined from 890 in 2008 to 798 in 2013. “Many new operators lack supply chain contracts with importers and are unable to send production offshore,” explained Ms Panteva, “which has caused them to lose out on margins. This decline has pushed some players out of the industry because they were unable to sustain profitable operations.”
The sole major player in the industry, New Balance, makes only about 25% of its US-market shoes domestically, marking a shift in production location for longstanding US shoe manufacturers.
Projected declines will be less drastic than the substantial drops that occurred at the start of this decade because the industry will stabilise at a lower base, according to the IBISWorld.
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