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Footwear Suppliers Chomping at China’s Market Share

With most goods for the crucial fourth already in stores and retailers and brands working toward better inventory positions, U.S. footwear imports continued to slow in October, up 19.2 percent year to date to 2.27 billion pairs after rising 21.95 percent in the nine-month period, according to new data from the Commerce Department’s Office of Textiles & Apparel (OTEXA).

Footwear imports have steadily slowed in recent months, as merchants and vendors grappled with softened consumer demand and high inventory positions. Imports had increased 24.8 percent year to date though August and were up 27.4 percent in the first half of the year. For many, the tightening of inventory management seems to have paid off.

“For the third quarter and even with as the consumer navigates this challenging macroeconomic environment, we achieved record quarterly sales of $798 million, nearly 2 percent higher than the third quarter of 2021,” Diane Sullivan, chairman and CEO of Caleres, said last month.

The retailer’s inventory was up approximately 19.5 percent, in line with expectations, and 15.8 percent below the second quarter of 2022.

Shoe Carnival in late November announced a third-quarter profit of 12.8 percent, the highest of the year after the prior period’s 12.4 percent and the seventh consecutive quarter in double figures.

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“As we have seen the past seven quarters, we continue to deliver excellent product margins,” chief merchandising officer Carl Scibetta said. “These product margins continue to run up over 700 basis points versus 2019 and are a result of our transformational promotional strategy.”

OTEXA’s report revealed that footwear imports from No.1 supplier China slowed to a 12 percent increase in the 10-month period to 1.21 billion pairs, after rising 18.8 percent in the first three quarters of the year.

Footwear shipments from No. 2 supplier Vietnam increased 20.6 percent in the period to 541.37 million pairs. This was up from a 16.8 percent year-to-date gain in the first three quarters of the year.

According to OTEXA, China and Vietnam combined for an 80.6 percent imports margin share year to date through October, down from an 81.5 percent share in the nine-month period. This leaves the door open for some of the key second tier suppliers to take market share from the top two manufacturers, especially China.

The rest of the Top 5 footwear producer nations for the U.S. market all showed such gains. Imports from No. 3 supplier Indonesia stepped up 53.4 percent to 164.28 million pairs through October. This followed a 52.7 percent hike in the first nine months and put Indonesia’s import surge above a 50 percent year-to-date gain for the fourth consecutive month.

Shipments from Cambodia rose 38.1 percent to 65.9 million pairs, while imports from India increased 46.9 percent to 35.67 million pairs.