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Footwear Import Growth Slows in July, Cost per Pair Rises

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Footwear imports, which like those of apparel surged to a record level in June as retailers pushed orders ahead of schedule in anticipation of a West Coast dock workers stoppage, grew at a slower rate in July, according to the latest data from the U. S Dept. of Commerce Office of Textiles and Apparel (OTEXA).

Vietnam reinforced its year-to-date share gain, while China continued to lose share of the U.S. footwear market.

Many retailers had worried that the contract between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which officially expired July 1, would result in shipments being held up in critical West Coast ports, and as a result pushed many orders which would have arrived in July up by one month.

Imports grew by 2 percent during the month of July compared to the same month last year, bringing the year-to-date total to $14.6 billion, 2.9% ahead of the same period last year. On a 12-month smoothed basis, footwear import growth slowed to 3.4% in July from 3.5% in June.

The average cost for a pair of imported footwear increased by 4.4% in the first six months of the year compared to the same period one year ago, to over $10.

Cost increases were largely due to increased labor costs passed along to importers, and a relatively strong U.S. footwear market, particularly in casual and athleisure shoes, and luxury brands.

Volume in July, usually one of the biggest footwear import months of the year, was probably negatively impacted this year by the June shipping increase.

An estimated 98 percent of footwear sold in the U.S. is imported, according to the American Apparel and Footwear Association (AAFA).

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Despite losing 2.9 percentage points of market share so far this year, China remains by far the dominant supplier to the U.S., with 66 percent share of total footwear imports. The average cost per pair for footwear imported from China between January and July was $8.33, 19 percent below the overall average. Roughly 39 percent of the footwear imported from China is made of leather, with the balance made mostly of synthetic materials. In 2013, footwear imports from China fell 0.8% to $16.6 billion.

Vietnam gained 1.8 percentage points of market share so far this year, bringing its share of U.S. footwear to 13.7%. Year-to-date footwear imports from Vietnam have surged by 18.6%, to over $2 billion. Unit imports have grown by more than 16 percent, driving up the average pair cost by more than 2 percent year-over-year. Nearly 42 percent of footwear from Vietnam is made of leather. Last year, footwear imports from Vietnam grew by more than 20 percent in dollar terms, to almost $2.9 billion.

Italy supplies the most expensive footwear to the U.S., at an average cost of over $84 per pair, up 5.5% over last year for the January to July period. In 2013, the U.S. imported $1.2 billion worth of footwear from Italy, an 8.5% increase over last year. Almost 90 percent of the footwear imported from Italy is made of leather. Italy is now the third largest supplier in dollar terms to the U.S. footwear market, with a 5.9% share, underscoring the importance of the luxury business.

Imports from Indonesia, the fourth largest source of U.S. footwear with a 5 percent share, fell by 1.4% for the first half, to $732 million. The average cost per pair from Indonesia rose 5.1% to $13.79.

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