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Led by China Collapse, US Footwear Imports Plunged 28.4% Through July

U.S. footwear imports continued to slide in July and have now declined 28.4 percent to a value of $10.77 billion in the first seven months of the year compared to the same period in 2019, according to the Commerce Department’s Office of Textiles & Apparel (OTEXA).

The severe decline is primarily caused by a falloff in demand from retailers and consumers battling the economic fallout of the coronavirus pandemic that forced widespread store closures and unemployment, leaving consumers with less disposable income to spend on shoes, boots and sneakers. On top of that, merchants and brands are now also working off inventories that fell victim to the crisis.

Genesco reported that inventories decreased 18 percent on a year-over-year basis in the second quarter to $365.2 million. At Calares, gross margin was 36.4 percent in the period, reflecting an aggressive spring liquidation of spring inventory.

The inventory work-off is also evident by the increased decline in category imports–footwear imports were down 27.8 percent in the first half of the year–even as the economy has picked up a bit.

China continues to lead the plummet, with imports down 41.4 percent year to date through July to $4.31 billion for the still-top supplier, widening its 40.5 percent decline in the first half. No. 2 supplier Vietnam’s shipments were down 8.6 percent to $3.62 billion in the period, about on par with its first-half decrease.

Cambodia and Germany continued to be the only two suppliers of the Top 10 to increase in their shipments. According to OTEXA, imports from Cambodia increased 11.9 percent in the period to $226.19 million, while Germany’s shipments rose 6.5 percent $86.1 million.

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The rest of the Top 10 suppliers–Indonesia, Italy, India, Mexico, Spain and Brazil–all posted declines in the period.

For the month of July, U.S. footwear imports fell sharply year over year, losing volume and dropping to the lowest July in 19 years, according to the monthly analysis from Footwear Distributors of America (FDRA), which cited the combined impact from the coronavirus and continued surges in duty costs.

The volume of footwear reaching U.S. shores in July fell a year-over-year 29.7 percent, lower for the 11th straight month and the seventh straight double-digit drop, FDRA noted. It was led by a 36.5 percent decline in shipments from China, which outpaced smaller drops from Vietnam of 10.8 percent and Indonesia of 12.3 percent, while imports from the rest of the world sank 19.2 percent in volume.

The value of total footwear imports fell 31.1 percent in the month from a year earlier, also lower for the 11th straight month.

“Duties remain problematic for the industry, reaching $243.3 million in July,” FDRA said. “Trump duties applied against footwear from China are the key culprit behind the jump in duties per pair the last several months. Indeed, duties per pair from China jumped 11.7 percent in July, the 11th straight month of gains. Accordingly, FDRA expects full-year average duties per pair from the world could climb to a record high of $1.61 in 2020, up some 20 percent from last year.

Footwear imports by category were also broadly lower in the month, FDRA noted. Women’s footwear imports nosedived a year-over-year 51.4 percent to the lowest July volume, while men’s imports stepped down 40.6 percent–both to the lowest July in more than 25 years.