Approximate Net Recovery on Cost
Women's Footwear: 65%-80%
Men's Footwear: 55%-70%
- Industry Revenues: $2 billion
- Major Product Categories: Men’s, women’s, athletic shoes
- Significant Companies: Nike, Sketchers USA, Timberland, adidas, Reebok
- Market Share of Top: The global footwear market generates approximately $85 billion in export revenue, according to the International Trade Centre.
- Recent Sales Trends: U.S. retail sales for clothing and clothing accessories stores, a potential measure of spending on footwear, increased 5.5% in 2012 compared to 2011.
Product Launches: New products from footwear manufacturers have continued to spark sales. Nike, for example, has released new lightweight Flyknit running shoes, yoga-focused Studio Wrap shoes, and fitness tracking tools. Some footwear manufacturers have also opened more retail locations to boost sales.
Internet Sales: Many shoe companies operate consumer Internet sites for online order placement. These sites are most successful for men’s products, since women’s shoes are more difficult to evaluate in pictures. Internet consumer sales are especially important to smaller brands that supply only a limited selection to national chain stores.
Foreign Economic Regulators: As foreign countries like China and Vietnam develop stricter labor laws, footwear manufacturers may find challenges in capitalizing on the previously competitive benefits of cheaper labor and relaxed oversight.
Inventory Control Challenges: Footwear manufacturers are increasingly maintaining lean inventory levels and relying on just-in-time manufacturing; as a result, manufacturers have faced out-of-stock issues when retailers attempt to reorder popular shoes on short notice. The average inventory turn is approximately six times per year.
Market Expansion/Contraction Issues: Over the past two decades athletic shoe brands have established successful licensing agreements with professional athletes. Endorsement arrangements are expanding not only for top athletes, but for other famous singers and actors, as well as children’s characters including Barbie, Spider-Man, and the Marvel names.