Continued outsourcing and low levels of consumer spending left the industry reeling.
Los Angeles, CA (PRWEB) September 13, 2013
With manufacturers shifting operations overseas and cheap imports penetrating the US market, revenue for the Shoe and Footwear Manufacturing industry is expected to fall over the five years to 2013. Many companies have moved away from manufacturing footwear in the United States and are focusing on designing, wholesaling and marketing branded shoes. 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 is not 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. In fact, industry revenue is expected to inch upward, boosted by growth in downstream demand from wholesalers and retailers.
According to IBISWorld Industry Analyst Nikoleta Panteva, “The number of companies in the industry has also declined.” 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 industry because they were unable to sustain profitable operations,” says Panteva. Meanwhile, well-recognized names, such as Nike, have tightened their stronghold on the shoe supply chain. 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.
The Shoe and Footwear Manufacturing industry in the United States has a low level of concentration. This low concentration reflects a largely fragmented market that has a mix of small players. The sole major player in the industry is New Balance, while others operating in this industry include Reebok International Ltd., Adidas AG and Nike Inc. (see IBISWorld report 31621 for major player market shares). Most large footwear companies, such as Nike and Adidas, 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. Projected industry declines will be less drastic 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 2018, as imports continue to infiltrate the industry, growing annually and satisfying close to all domestic demand.
For more information, visit IBISWorld’s Shoe and Footwear Manufacturing in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld industry Report Key Topics
The Shoe and Footwear Manufacturing industry produces 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
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.