Shoe Companies Leaving China...Fast!!

With cost pressures mounting in Asia — and a renewed sense of patriotism that focuses on job-creation — a number of American footwear firms are moving production back to the U.S. "Manufacturing overseas is becoming less attractive: Transportation, material and labor costs are skyrocketing, and you've also got ocean carriers implementing slow steaming to save fuel, so it's taking even longer to get product," said Nate Herman, VP of international trade for the American Apparel & Footwear Association. "That doesn't work for the type of retail environment we're in, where companies need to react to trends and changes in the market more quickly than ever." Following decades of sharp declines, the amount of shoes being made in the U.S. has inched up each year since 2009, Herman said. This year, 30 million of the 2 billion pairs of shoes sold in the U.S. will be produced domestically. Herman predicted the upward trend will only continue as the cost advantages of producing overseas begin to disappear and more footwear firms look to capitalize on the many benefits of making shoes at home, including significantly shorter lead times and greater control and flexibility. "The situation in China is very uncertain. 


Prices continue to creep up, and it's increasingly challenging to manage logistics and quality control, especially as a smaller company," said Arkady Altskan, GM of Baltimore-based comfort brand Pilgrim Shoes, which opened U.S. production last year. "We want to stay ahead of the changes. So far, having our own factory here has been a huge advantage." Still, manufacturing domestically is a difficult process to navigate. Perhaps the biggest challenge is the lack of infrastructure. "Back in the heyday of American shoemaking, you had everything you needed here, from machinery and processes to a robust supply chain, but those things don't exist anymore. If you're going to start manufacturing here, you're basically going it alone. You're reinventing those processes," said Colin Hall, chief marketing officer of Port Washington, Wis.-based Allen Edmonds, which has been manufacturing exclusively in the States since 1922.

John Wilson, VP of manufacturing for New Balance, another veteran of the U.S. with five factories in the New England area, said he is optimistic that as more footwear firms move production back onshore, the domestic supplier base will begin to revitalize. "It hopefully will drive the need for raw materials suppliers to relocate, improving the supply chain and infrastructure here," he said. "We've seen that in the shoe industry's migration to different parts of Asia over the years — the raw materials companies moved their plants closer to the manufacturing sites."

source: WWD