Footwear Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 200 footwear manufacturers in the US design and market their own products, but may also contract to produce footwear for outside designers. Products include dress and casual shoes, athletic shoes and cleats, industrial shoes, sandals, boots, ballet slippers, house slippers, and orthopedic shoes.

Changes in Fashion

Consumer interest in shoes can be fickle with styles changing and falling out of favor within seasons or a few years.

Global Competition

Imports dominate the US footwear market, accounting for 98% of sales.

Industry size & Structure

The average footwear manufacturer operates a single location, employs 56 workers, and generates about $9 million in annual revenue.

    • The footwear manufacturing industry consists of about 200 companies that employ 11,300 workers and generate $1.8 billion in annual revenue.
    • 44% of footwear manufacturers have fewer than 5 employees, while the 10 largest firms have over 500 employees.
    • The industry is highly concentrated: the 8 largest companies account for 60% of industry revenue.
    • The states with the largest number of footwear manufacturing facilities are Texas, California, New York and Maine.
    • Companies with domestic manufacturing operations include Gateway Shoes, San Antonio Shoemakers (SAS), Modern Vice, Minnetonka, Heyday, MacNeill Engineering (Champ brand) and Wolverine.
    • Companies may have foreign operations or contract production to foreign manufacturers. Crocs sources its production from licensed manufacturers in Asia. Sketchers designs and markets footwear, but contracts the actual manufacturing to foreign producers, primarily in Asia.
                                  Industry Forecast
                                  Footwear Manufacturers Industry Growth

                                  Coronavirus Update

                                  Nov 20, 2021 - Factories In Asia Are Reopening
                                  • Factory activity in Asia increased in October as COVID-19 infections decreased, but rising input costs, material shortages, and slowing Chinese growth cloud the outlook. China’s factory activity expanded at its fastest pace in four months in October, the private sector Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed. A PMI sub-index for output showed, however, that production shrank for the third straight month due to power shortages and rising costs. Factory activity expanded in Vietnam, Indonesia, and Malaysia in October as operations gradually normalized after being hit by shutdowns caused by a spike in COVID-19 infections. Experts note, however, that supply/demand equilibrium will not return soon. “While October Manufacturing PMIs point to a strong rise in manufacturing output, industry is likely to be working through huge backlogs of orders for many months to come and resulting supply shortages further afield are set to persist,” said Alex Holmes, emerging Asia economist at Capital Economics.
                                  • Almost 70% of surveyed footwear manufacturers in Viet Nam that have been affected by COVID-19 outbreaks said that they have been penalized by their foreign customers for late deliveries. More than 12% had their foreign orders cancelled and compensation demands made for breach of contract. Another 21% said that their orders were cancelled but no compensation demands were made. Nearly half of the respondent firms had delivered goods late because of prolonged social distancing measures in Vietnam due to a spike in Covid-19 infections. They noted that it took goods 80 days, instead of the previous 40 days, for shipping to the US.
                                  • Footwear manufacturer Nike has lost 40 million pairs of shoe production a month due to the pandemic-induced factory shutdowns in Vietnam, according to Wall Street research firm BTIG. “We assume another 4 months worth of 50% production capacity for a total of 160 million pairs potentially not made this year,” analysts said. “This compares to an estimated 350 million that were made last year in Vietnam.” Analysts forecast a five- to six-month period before factories are back to normal, including eight weeks to work through the backlog. Manufacturing at major plants in Vietnam had not resumed by mid-September due to COVID-19 outbreaks in communities and factories. “The expectation is that this elevated supply chain disruption is going to be here for a long time, easily for another year. All of these variables seem to be once-in-a-lifetime variables and they’ve all fallen in the same year,” Footwear Distributors and Retailers of America (FDRA) President and CEO Matt Priest said.
                                  • Several brands shifted some manufacturing to Vietnam and other countries due to issues like tariffs and the coronavirus pandemic, hoping to diversify their supply chain away from dependence on China. About 62.2% of US athletic footwear will be imported from China in 2021, and 23.3% from Vietnam, according to a FDRA forecast. That compares with 61.2% from China in 2020 and 24.3% from Vietnam. About 68.3% of US athletic footwear came from China As far back as 1996, and 0.2% was imported from Vietnam.
                                  • Vaccination campaigns remain in their early stages in China, Taiwan, Malaysia, and other Asian countries. Thailand has been battered over the past two months by its worst ever surge of new cases, while Vietnam has also suffered. “This is coming at a really fragile time when we’ve just started to see the global trade recovery pick up,” said Nick Marro, the Hong Kong-based lead analyst for global trade at the Economist Intelligence Unit.
                                  • Some businesses that took PPP loans in 2020 but don't apply for forgiveness soon will need to start making payments on the loan plus interest. The PPP loans will automatically convert to a standard loan at 1% interest if a small business does not apply to the SBA for forgiveness within 10 months of the end of the covered period under which they had to spend the money. For some businesses that received a loan when the PPP launched in April 2020, there was an eight-week covered period, which would put the forgiveness application deadline in the middle of July. For most loans operating under the more popular 24-week covered period, that meant a deadline in September.
                                  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
                                  • Fashion and performance footwear will boost dollar sales for the overall industry in 2021, though sales will remain below 2019 levels, according to The NPD Group’s Future of Footwear report. “A return to the office and store re-openings will likely reignite some demand for fashion footwear, although the focus will remain on casual and comfort-oriented styles. The pandemic has only amplified the importance of these attributes, as the blending of work-from-home and remote learning has led consumers to favor comfort to wear any time of the day,” said Beth Goldstein, NPD’s fashion footwear and accessories analyst. Performance footwear growth will be driven by demand for road running shoes.
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