When the coronavirus pandemic swept the land, the footwear industry was forced to react quickly to stem the coming tide of lost retail sales and burgeoning inventories as consumers stepped back from discretionary purchases.
The pandemic’s impact was amplified for the small number of footwear brands that manufacture their products in the U.S. Even as their peers kept their inventories lean through promotional activity and e-commerce sales, Made in America footwear brands like Los Angeles-based ComunityMade needed to find a way to keep their local manufacturing assets afloat while sales stagnated.
Like many U.S. apparel manufacturers, the brand shifted production to making personal protective equipment in the form of medical gowns for healthcare personnel. Only recently has the company been able to return to producing footwear, according to ComunityMade co-founder and CEO Sean Scott.
“ComunityMade was pretty lean when the lockdown occurred. And we’re still too lean; losing sales due to out-of-stock items,” Scott told Sourcing Journal. “Despite this, we were able to move a large quantity of older, slow-moving inventory with our WE CARE program.”
This program allowed customers to choose what they pay for older inventory items, the proceeds of which then went to The People Concern, a homeless welfare group in Los Angeles.
Footwear brands like New Balance and Allen Edmonds took the same approach, converting their U.S. factories into PPE production facilities as hospitals in hard-hit areas struggled to keep medical workers adequately equipped to fight the virus.
In early April, New Balance announced it would put its Lawrence, Mass., and Norridgewock, Maine factories to work producing face masks designed with the assistance of Bob Langer from the Massachusetts Institute of Technology’s Langer Lab and other local institutions. The goal was to produce a combined 100,000 units per week at the two factories.
By June 9, the performance footwear and apparel brand announced it had produced more than 1 million masks for the medical community through this program. As the demand for medical-grade PPE leveled off, New Balance said it would begin to produce face masks as a commercial product.
Even without the pressure of maintaining a presence in American manufacturing, U.S. footwear brands continue to struggle with the challenge of repairing inventories and offering newness to consumers as businesses and retailers start to reopen.
“We haven’t been able to introduce new models due to non-essential business shut down and our focus on PPE,” Scott said. “However, we are very aware that new product introductions are one of the keys to reinvigorating our sales.”
ComunityMade is currently fast-tracking several new models toward this purpose, Scott said. Of note, the brand hopes to introduce a $50 American-made shoe into its lineup to appeal to cash-strapped consumers in the post-pandemic marketplace.
Independent American shoe brand All Black faces similar struggles in dealing with spring/summer inventory, which brand principal and distributor Marty Rose said has resulted in previously unheard-of stock levels.
“The vast majority [of All Black’s boutique buyers and major customers] treated the pandemic as a partnership effort to help each other,” Rose said. “We had partial cancellations, offered extended terms and gave discounts where possible.
“We will recover but business will not reach the pre-pandemic levels for at least two seasons,” he added.
E-commerce sales are taking up a larger piece of the pie for these brands, and growing an online customer base has become a priority for the footwear industry, according to Beth Goldstein, an analyst for The NPD Group.
In April, the percentage of footwear sales generated online swelled to 65 percent, Goldstein said, compared to the pre-COVID level of around 30 percent. Online-generated sales then retreated closer to 50 percent as stores began to reopen but Goldstein said she doesn’t expect the ratio to return to the mark seen in March.
“I expect that the lockdown has jumpstarted growth online again as many consumers remain hesitant to get right back into stores, and are now more accustomed to shopping online,” Goldstein told Sourcing Journal.
This sentiment was echoed by Scott, who said he doesn’t believe consumers are ready to show up in-store to try on shoes and apparel. The brand’s biggest advantage is its story of local production and local jobs, he said, and a combination of promoting that story and increasing promotional activity has helped sales slowly return following the shutdown.
The ComunityMade store in Los Angeles has yet to reopen, however.
“When we do return, our safety measures will be a part of our identity,” Scott said. “We want folks to know that our space is a safe, clean environment. This will probably mean uniforms consisting of masks and gowns and visible cleaning practices. “
Footwear revenue will still need to rebound soon if American shoe brands hope to avoid further challenges. According to the NPD Group’s Consumer Tracking Service, footwear dollar sales were still down 23 percent year-over-year in May—an improvement over a loss of 42 percent in March and 54 percent in April.