Footwear Wholesaling in the US Industry Market Research Report from IBISWorld Has Been Updated

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Industry revenue has been falling as a result of retailers increasingly sourcing footwear directly from manufacturers, in order to save costs from wholesaling. For this reason, industry research firm IBISWorld has updated a report on the Footwear Wholesaling industry in its growing industry report collection.

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Cheap imports and offshore manufacturing will intensify price competition.

The past five years for the Footwear Wholesaling industry has been quite volatile, with revenue dropping over the five years to 2013. Revenue has been falling as a result of retailers increasingly sourcing footwear directly from manufacturers to save costs from wholesaling. Additionally, retailers have been putting downward pressure on shoe prices, cutting into wholesalers' revenue and profit margins. Revenue plummeted in 2009, due to decreased downstream demand during the recession. Then in 2010, revenue soared as consumer spending climbed, boosting downstream demand from retailers. Consumer spending is expected to continue supporting revenue in 2013, with an expected during this time. Consequently, as the economy begins to show signs of a solid recovery, consumers will purchase more shoes. This trend will resonate throughout the Shoe Stores industry (IBISWorld report 44821) and trickle back to footwear wholesalers in the form of stronger demand.

According to IBISWorld Industry Analyst Nikoleta Panteva, “The increasing price-setting power of retailers, which downstream stores use to cut costs, has forced many unprofitable shoe wholesalers out of the industry.” Enterprise numbers dropped in 2009, but were offset by new operators entering the market, which were attracted by growing revenue. On average, enterprises are estimated to decline over the five years to 2013. Similarly, low-cost imports have made cheaper shoes available on the domestic market, forcing some wholesalers to slash their own prices and take in slimmer profit margins.

Industry concentration measures the extent to which major players dominate an industry. The Footwear Wholesaling industry has a low level of concentration, as it has a fragmented market that has a mix of small and large participants. The three largest players (Nike Inc., Adidas AG and Jones Apparel Group Inc.) are expected to account for about more than 10.0% of industry revenue in 2013. Market share concentration has increased over the past five years, with significant growth in 2008 (see IBISWorld report 42434 for major player market shares). The highly competitive nature of this industry will continue to place pressure on participants to close operations or merge to maintain profitability. Even wholesaling customers like large, well-established department stores are subject to mergers, acquisitions and bankruptcy putting further pressures on wholesalers to consolidate.

Categorically, “the industry is not forecast to show signs of consistent improvement for the five years to 2018,” says Panteva. While revenue is anticipated to grow in 2014, as a result of the recovering domestic economy, revenue is forecast to decline overall, during the five-year period. Cheap imports and the continued shifting of manufacturing operations to low wage-cost countries, will intensify price competition for wholesalers, further reducing the number of operators by 2018. Profit margins for the remaining wholesalers are not projected to show growth and, overall, footwear wholesalers are not faring well, due to the recurring negative effects from upstream and downstream industries.

For more information, visit IBISWorld’s Footwear Wholesaling in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in the Footwear Wholesaling industry wholesale footwear (including athletic shoes) made of leather, rubber and other materials. Businesses in this industry purchase shoes from manufacturers, and resell them to retailers with minimal or no further development or processing. Most wholesalers in this industry undertake sales and administrative activities, such as establishing relationships with manufacturers and retailers.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld Inc.
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