The financial crisis of recent years has decreased discretionary spending, hurting the industry
Los Angeles, CA (PRWEB) February 29, 2012
This industry has one foot in the grave. With manufacturers shifting operations overseas and cheap imports penetrating the US market, revenue for the Shoe and Footwear Manufacturing industry is expected to fall at an average annual rate of 1.2% over the five years to 2012. “Many companies have moved away from manufacturing footwear in the United States and are focusing on designing, wholesaling and marketing branded shoes,” says IBISWorld industry analyst Nikoleta Panteva. The credit and financial crises of the past few years have led to extremely low levels of consumer spending, negatively affecting sales of discretionary items like shoes. However, this struggling industry isn't likely to experience more double-digit drops; most large footwear manufacturers have already moved operations overseas, and the rate of growth in international outsourcing is expected to stabilize.
The number of companies in the industry has also declined; between 2007 and 2012, the number of enterprises is expected to fall from 1,027 to 770. Many new operators lack supply chain contracts with importers and are unable to send production offshore, which has caused them to lose out on margins. This decline has pushed some players out of the Shoe and Footwear Manufacturing industry because they were unable to sustain profitable operations. Meanwhile, well-recognized names like Nike have tightened their stronghold on the shoe supply chain. According to Panteva, while Nike accounts for a negligible portion of industry revenue, its brand recognition and effective cost controls have allowed it to remain at the forefront of the shoe sector.
Projected declines will be slower than the substantial drops that occurred at the start of this decade, as the industry will stabilize at a lower base. IBISWorld forecasts that revenue will decline over the five years to 2017, while imports will continue to infiltrate the industry. This trend will force participants out of the industry. The Shoe and Footwear Manufacturing industry in the United States has a low level of concentration, reflecting a largely fragmented market that has a mix of small players. Most large footwear companies manufacture nearly all of their products outside of the country. This practice has increased over the past few years as large manufacturers discontinue production in the United States, instead focusing domestic activities on design and wholesale of footwear. For more information, visit IBISWorld’s Shoe and Footwear Manufacturing in the US report in the US industry page.
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IBISWorld industry Report Key Topics
This industry manufactures footwear for men, women and children. They may manufacture rubber and plastic footwear, protective footwear, house slippers and slipper socks. Operators also manufacture men's or women's footwear designed for dress, street and work. These products also include men's or women's shoes with rubber or plastic soles and leather or vinyl uppers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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