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Footwear Imports Falloff Reflects Inventory Crunch

As the footwear market navigates headwinds such as high inventories and weaker consumer demand, the flow of imports into the United States continued to slow in August, increasing 24.8 percent to 1.81 billion pairs in the first eight months of the year.

This compared to a year-to-date 26.4 percent rise through July compared to the same period in 2021 and a 27.4 percent first-half pace, according to data from the Commerce Department’s Office of Textiles & Apparel (OTEXA), even as retailers and brands prepared for vital fourth-quarter selling.

Nike Inc. sited a surge in inventory and a renewed focus on discounts as weighing on its first-quarter earnings, in which revenue rose 4 percent to $12.7 billion. Net income was $1.5 billion, down 22 percent from the $1.9 billion generated in the year-ago period.

Inventories for Nike were $9.7 billion, up 44 percent compared to the prior year period, attributed to elevated in-transit inventories from ongoing supply chain volatility.

The inventory bloat also depressed profit margins, with gross margin now expected to decline between 200 to 250 basis points, or 2 percent to 2.5 percent, versus the prior year. This reflects approximately 150 basis points, or 1.5 percent, of annual impact from higher markdowns, and a higher off-price mix to liquidate elevated inventory.

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OTEXA data revealed that top supplier China’s imports increased 23.8 percent to 1.04 billion pairs year to date through August, down from a 27 percent gain the prior month. Sourcing decisions are still being impacted by ongoing tariffs on Chinese goods, ongoing calls to repeal them and heightened geopolitical strife and risk factors of producing there.

Footwear imports from No. 2 supplier Vietnam stepped up with a 13.9 percent hike to 435.13 million pairs in the period. This followed an increase of 12.5 percent year to date through July and an 11.9 percent gain in the first half.

According to OTEXA, China and Vietnam combined for an 81.8 percent U.S. import share in the period, up from 81.6 percent in the seven-months through July. No. 3 producer for U.S. brands and retailers, Indonesia, saw its shipments rise 54.5 percent year to date through August to 130.86 million pairs, up from a 51.8 percent gain the prior month.

Rounding out the top five suppliers, strong gains were also seen by Cambodia, increasing 47.4 percent to 55.04 million pairs, and India, up 51 percent to 28.26 million pairs