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

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Despite the economic recovery, footwear wholesalers have little to look forward to; although demand for shoes will improve in line with the economic recovery, retailers' increasing price-setting powers are pushing footwear wholesalers out of the game. For these reasons, 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 the continued offshoring of manufacturing will intensify price competition

Despite the economic recovery, footwear wholesalers have little to look forward to; although demand for shoes will improve in line with the economic recovery, retailers' increasing price-setting powers are pushing footwear wholesalers out of the game. For these reasons, industry research firm IBISWorld has updated a report on the Footwear Wholesaling industry in its growing industry report collection.

The Footwear Wholesaling industry had a volatile past five years, with revenue dropping at an average annual rate of 0.4% to $28.4 billion over the five years to 2013. Overall, revenue has been falling as retailers increasingly source 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 10.5% in 2009 due to decreased downstream demand during the recession. The next year, in 2010, revenue soared 6.1% as consumer spending climbed, boosting downstream demand from retailers. Consumer spending is expected to continue supporting revenue in 2013, with an expected 2.0% increase. “As the economy begins to show signs of a solid recovery, consumers will purchase more shoes,” says IBISWorld industry analyst Caitlin Newsom. This trend will resonate through the Shoe Stores industry and trickle back to wholesalers in the form of stronger demand.

The increasing price-setting power of retailers, which downstream stores use to cut costs, has forced many unprofitable shoe wholesalers out of the game. Enterprise numbers dropped 2.7% in 2009, but were offset by new operators entering the market, attracted by growing revenue. On average, enterprises are estimated to decline at an annual rate of 0.1% over the five years to 2013 to total 3,896. 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. Profit is estimated to account for 5.3% of revenue in 2013, down from 6.5% of revenue in 2008. The industry is not forecast to show signs of consistent improvement for the five years to 2018. While revenue is anticipated to grow in 2014 as a result of the recovering domestic economy, revenue is forecast to decline during the five-year period. According to Newsom, 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. Profit margins for the remaining wholesalers are not projected to show growth, also diminishing. Overall, footwear wholesalers are not faring well due to the recurring negative effects from upstream and downstream industries.

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 four largest players are expected to account for about 25.8% of industry revenue in 2013. Market share concentration has increased over the past five years, from 20.2% in 2008. 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. 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 this 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
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