This category covers establishments engaged in the production of women's footwear designed primarily for dress, street, and work. Establishments engaged in the production of athletic shoes and misses', children's, infants', and babies' footwear are classified in SIC 3149: Footwear, Except Rubber, Not Elsewhere Classified. Establishments primarily engaged in the production of rubber or plastic footwear are classified in SIC 3021: Rubber and Plastics Footwear, and those manufacturing orthopedic extension shoes are classified in SIC 3842: Orthopedic, Prosthetic, and Surgical Appliances and Supplies.
316214 (Women's Footwear (except Athletic) Manufacturing)
The U.S. women's footwear industry is dominated by large companies that design and manufacture a wide variety of shoes each year. A steady market of consumers eager for new styles, along with the short life span of a pair of shoes, have produced lucrative profits for the nation's well-established footwear manufacturers. According to Footwear Industries of America (FIA), U.S. companies produced and shipped approximately 37 million pairs of women's shoes in the late 1990s. In relation to the overall footwear industry, women's models accounted for about 30 percent of all shoes produced by manufacturers in the United States. However, since the early 1990s, the industry has been heavily influenced by the continuing popularity of rubber soled athletic shoes and other outdoor oriented casual models that do not fall directly into this category.
The import of foreign-made footwear has been the biggest problem for domestic shoe manufacturers as comparably stylish but lower priced models made outside the United States continue to dominate the market. Approximately 92 percent of shoes sold in the United States in the late 1990s were made abroad, arriving primarily from China, Brazil, and Indonesia. These imports were able to undercut their American counterparts in large part due to the lower labor and production costs incurred by foreign shoe companies. As a result, total industry shipments declined significantly throughout the late 1990s, falling from $703 million in 1997 to $373 million in 2000. The total number of employees dropped from 10,442 to 6,114 over the same time period.
Unveiling a wide assortment of new shoe styles each season is how industry leaders regularly improve their product lines and increase their market shares. A key aspect of this process consists in the work of a shoe company's in-house design staff, which develops appropriate new versions of their firm's basic products by monitoring European and American fashion trends. As this is one of the most expensive parts of the entire manufacturing process, more and more American companies have attempted to reduce overall costs by relocating many preliminary manufacturing tasks to foreign factories where labor expenses are lower. Nevertheless, shoes are frequently returned to the United States for a number of final production steps, at which point the finished footwear is distributed to stores across the nation. Marketing teams from each manufacturer then negotiate with retail outlets and department stores in an effort to place as much of their company's products on display shelves as possible. Competition is fierce, and dramatic shifts within the industry based on the smallest stylistic or structural innovation are commonplace. To keep up with these changes, much of the industry's design, marketing, and management personnel meet at annual trade gatherings like the Fashion Footwear Association of New York show, the National Shoe Fair, and Shoes in New York.
The U.S. market for women's footwear has undergone a significant transformation in recent years. This shift has been driven by two distinct yet interrelated trends. First, women have come to prefer comfort over style when selecting their footwear. A late 1990s study cited by Footwear News revealed that 82 percent of women ranked comfort ahead of fashion on their list of shoe-buying criteria. Second, with the proliferation of "casual Fridays" and other corporate dress-down occasions, a greater number of women wear less formal shoes to work. As a result, women's dress shoe sales have fallen by more than 30 percent since 1991 (and those of pumps by nearly 37 percent in the same period), while casual shoe sales have soared—becoming the second most popular market in the U.S. behind athletic shoes. As the massive baby boom generation ages, the market for women's casual footwear is expected to continue to expand, as these consumers seek more comfortable shoes.
Despite the growth of the casual footwear segment of the women's shoe market, American footwear manufacturers have continued to lose ground to their foreign rivals. Although the total number of pairs of women's nonathletic shoes produced in the United States remained relatively constant throughout the late 1990s, domestic shoe companies controlled a dwindling percentage of that market. Nearly 93 percent of all shoes purchased in the United States in the late 1990s were manufactured abroad, an increase of 4.1 percent from 1994. Imported women's footwear, which reached nearly 533 million pairs in the late 1990s, dwarfed the 37 million pairs manufactured domestically that year. Nearly 7 million pairs of these shoes were exported from the United States.
The impact of changing consumer tastes and increased competition from imports is reflected in the value of industry shipments; this was cut nearly in half between 1997 and 2000, falling from $703 million to $373 million. Over the same time period the cost of materials declined from $322 million to $165 million.
Nine West Group Inc. manufactures and markets such venerable brands as Easy Spirit, Bandolino, Enzo Angiolini, and Pappagallo. With over 15,000 employees and 1999 sales topping $1.9 billion, Nine West dominates the market for casual, career, and dress footwear. The company's wares are sold at 1,500 of its own retail stores, as well as at over 7,000 locations in department stores and specialty shoe outlets. Nearly 92 percent of Nine West's shoes are manufactured in Brazil, China, and other foreign countries. Despite a series of profitable acquisitions in the early 1990s, Nine West faced flagging sales and excess inventory in 1998. As a result, the company was purchased in 1999 by Jones Apparel Group, whose brands include Jones New York and Todd Oldham.
Nine West was founded in 1977. The publicly-held firm quickly attained a place of distinction by sourcing out many of its manufacturing tasks to factories in foreign countries, which enabled Nine West to offer fashionable products at extremely competitive prices. Its shoes developed high brand recognition and were found in department stores as well as the company's own retail outlets. This strategy proved successful, and by the early 1990s, its original Nine West stores—which accounted for 30 percent of all company sales at the time—tallied one of the industry's highest sales-per-square-foot ratios. With its popular brands Nine West, Calico, and Enzo Angiolini moderately priced between $25 and $55, Nine West appealed to younger working women who wanted chic shoes at a reasonable price. In particular, its Enzo Angiolini division made great strides in the early 1990s against several major competitors who also offered affordable, European-style dress and career shoes.
Nine West's inroads proved disastrous for the United States Shoe Corp. As Nine West's fiercest rival, U.S. Shoe Corp. produced footwear brands such as Bandolino, Selby, Easy Spirit, Vittorio Ricci, Capezio, Amalfi, Evan Picone, Pappagallo, Texas Boot, and Wrangler Boot. Founded in 1931, U.S. Shoe Corp. had by 1995 emerged as not only one of the largest American manufactures of women's shoes, but also as a franchiser of retail shoe, apparel, and eyeglass stores. With over 40,00 employees and annual sales of nearly $2.6 billion, U.S. Shoe Corp. operated the August Max Woman, Caren Charles, Pappagallo, and Casual Corner nationwide retail apparel outlets, as well as LensCrafters optical-goods outlets.
U.S. Shoe began suffering major losses to Nine West in the early 1990s, especially as its once dominant Bandolino division—offering dress and career shoes priced from $55-$70 and targeted at fashion-conscious working women—fell victim to unfavorable exchange rates stemming from its manufacture in Italy, and the fresher styles in the same price range introduced by competitors such as Nine West. Retailers began discounting Bandolino and the brand's all-important image suffered among consumers; as demand decreased department stores ceded more shelf space to Nine West, and U.S. Shoe and Bandolino lost even more ground.
U.S. Shoe had made some strides during the early 1990s by emphasizing its Easy Spirit line of dress shoes, which it had introduced in 1988. This label was a direct response to the growing needs of women in the workforce who were pairing business attire with athletic footwear for street travel, carrying their uncomfortable dress pumps in a bag, and then changing shoes after arriving at work. Pump sales had peaked in the mid-1980s but dropped off as they became less of a fashion staple and more of a basic wardrobe necessity. Trying to capitalize on women's continuing need for a dressy shoe but increasing unwillingness to torture their feet in high heels, U.S. Shoe combined lowto medium-heeled pumps with flexible soles and padded linings. Advertising campaigns depicted women playing basketball in the shoes and trumpeted the slogan, "Looks like a pump, feels like a sneaker." Priced at around $100 a pair, the shoes cost more than average pumps, but nonetheless proved popular.
Ultimately, however, such efforts—as well as the company's decision to move the production of its more casual shoe models to lower-cost Brazilian and Far Eastern factories—proved insufficient to stem the negative tide. In 1995, U.S. Shoe was acquired by Luxottica. Although Luxottica kept LensCrafters within its corporate fold, it sold U.S. Shoe's women's apparel division to an Italian concern. Nine West purchased U.S. Shoe's footwear business in 1995 for $600.0 million.
Nine West immediately began incorporating various U.S. shoe lines into its own operation, placing a number of shoe stores (such as Easy Spirit and Easy Spirit Outlet) under its management arm, and announcing in early 1997 that it would close three of its former rival's domestic manufacturing facilities and transfer the additional production overseas. This maneuver reduced Nine West's U.S.-produced footwear from 8.5 million pairs in 1995 to about five million pairs—then representing less than 10 percent of its total production and continuing the strategy that helped it overtake U.S. Shoe in the first place. The move also eliminated about 1,000 of the company's 1,900 American manufacturing jobs.
In 1998, Nine West was forced to cut production by 40 percent. Plagued by a surplus of inventory and stagnate sales, the company laid off 6 percent of its workforce. After announcing in 1999 that it was under investigation by the Federal Trade Commission for its pricing policies, Nine West's travails continued. Later that year, Nine West was acquired by Jones Apparel. More job cuts were forecast.
Kenneth Cole Productions Inc., also a relative newcomer to the women's footwear industry, is another market leader. Founded in 1982, this publicly-owned company has over 1,000 employees and 1998 sales of over $219 million. The company's strength is in marketing its relatively-expensive trendy shoes. With its reputation for cutting-edge fashion, Kenneth Cole is increasingly known for its controversial advertising campaigns that combine corporate imagery with politically oriented messages. (Several of its ads in the mid-1990s, for example, centered on AIDS.) The company, which also sells eye-wear, practices what it preaches by making corporate financial donations to a variety of social causes and encouraging its employees to become involved in charitable projects. In addition to selling its products at 3,500 department and specialty stores, Kenneth Cole also operates 50 of its own retail stores, a mail order catalogue, and a Web site. Most Kenneth Cole goods are manufactured by contractors in Brazil, China, and India.
The Stride Rite Corp. is another a key player in the industry, although its women's division is only one part of its overall footwear operation. With its major brands including Grasshoppers, Keds, Sperry Top-Sider, and Stride Rite, the company reported 1998 sales of $539.4 million. The Massachusetts-based Stride Rite boomed in the 1980s by remarketing its lightweight canvas Keds sneaker, a standard product which it had made for more than 70 years. The renewed success of this casual shoe led to the reemergence of a similar product line, carrying the Grasshoppers label, which was aimed at older women. Models in this line included Keds-style canvas casuals, leather casuals, espadrilles, and leather sandals. Despite its success, the company was slow to adopt the bigger shoes and thicker soles that became fashionable in the early-1990s. In 1993, the company quickly strove to update its product lines. After closing 80 of its underperforming retail stores in 1995 and 1996, Stride Rite returned to profitability. In 1997, Stride Rite entered a licensing agreement with clothing designer Tommy Hilfiger to produce women's and men's shoes.
While many key players in the women's footwear business emphasize more dress-oriented models, the continuing popularity of casual footwear based on athletic-shoe styling and comfort has revolutionized the women's shoe industry. Footwear manufacturers, including many athletic shoe companies themselves, jumped into this niche in the early 1990s and began offering comfortable quasi-athletic shoes made with leather uppers and an emphasis on unique styling. This trend coincided with a general relaxation of office dress codes and created a new half-casual, half-workplace type of shoe.
Skechers U.S.A., Inc. has reaped the rewards of catering to this rapidly-growing market. Founded in 1992 by Robert Greenberg, who had previously co-launched the popular L.A. Gear athletic footwear company in the early 1980s, Skechers experienced phenomenal growth. Recognizing that younger consumers had tired of the athletic shoes sported by their baby boomer parents, Skechers debuted an array of rugged leather casual shoes. Although they utilized popular athletic-shoe materials and compressed air-cushioning pockets that were placed in the heel and the front of each sole, Skechers were intended primarily to complement casual apparel. Targeting 12 to 25 year old consumers, Skechers designed advertising that featured teenage skateboarders sporting Skechers shoes and plenty of attitude. The strategy was successful. According to Business Week , 17 percent of teenagers had purchased a pair of Skechers in 1998. Even more impressive was the company's burgeoning sales, which tripled between 1995 and 1998. 1998 sales grew 102 percent to reach $372.7 million, while 1998 net income was $24.4 million, an increase of over 121 percent from 1997. Skechers sells its trendy shoes at U.S. department and specialty stores, as well as at 40 of its independently owned retail stores.
Other companies also sought to claim a stake of this market. Airwalk, Vans, and Simple, which all traced their roots to the skateboarding and beach cultures of Southern California, gained a following of loyal consumers. Although these companies initially aimed their sneaker-like products at young men, in 1995 they began broadening their marketing approaches and design plans to include young women as well. "We've had a ton of people asking for cool but comfortable women's shoes," Simple president Eric Meyer told Action Sports Retailer magazine as one reason for the new emphasis.
Footwear manufacturers based in the United States have increasingly moved their production operations overseas to boost their profits. As a result, imports have gained a substantial foothold in the American footwear market. By 1998, 92.8 percent of all nonrubber footwear designed for American consumption was produced outside the U.S. This shift away from domestic footwear manufacture has had obvious consequences on the American workers once employed in the industry. 1,200 U.S. shoe factories closed between 1968 and 1995, resulting in the loss of nearly 180,000 manufacturing jobs. An additional 41 U.S. shoe-making facilities were shuttered between 1995 and 1998. By 1998, only 33,533 Americans were employed in the footwear industry—down from 53,800 in 1995 and 233,400 in 1968. In the women's footwear industry, the total number of employees fell from 10,442 in 1997 to 6,114 in 2000. Production workers, who earned an average hourly wage of $8.52, numbered 5,217 in 2000.
The surge of footwear production away from the United States has also impacted foreign workers. Factories are often re-located to countries noted for their dearth of government regulations on working conditions, health and safety matters, and the right to unionize.
Manufacturers of women's footwear in the United States continue to face strong competition from cheaper imports. The amount of imported shoes on the American market has increased exponentially in recent years, from 175 million pairs in 1968 to 374 million in 1978, and from 941 million pairs in 1986 to 1.3 billion in 1998. Over 533 million pairs of women's shoes alone were imported in 1998. The majority of these shoes now come from the Far East, with imports from China growing by 39 percent each year since 1981 to top 895 million pairs in 1998. Chinese factories produced 72.8 percent of the import shoes sold in the United States in 1998. Brazil and Indonesia accounted for an additional 10.5 share of the import market. Several aggressive newcomers also have sought entrance into the U.S. marketplace. Chief among these is Vietnam, according to Footwear News .
U.S. companies learned to reduce costs further by shipping cut footwear patterns to plants in Third World countries, where they were then either partially or completely assembled. The firms did this because it was cheaper for the footwear to be only partially assembled abroad, since American companies pay a lower duty (typically 5 percent) on unfinished goods being re-exported to the United States. The final, less labor-intensive manufacturing details such as bottoming, finishing, and packing are then completed at home.
On the other side of the international trade front, American companies shipped more than 27 million pairs of footwear abroad for sale in 1998, of which about 6 million were women's models. Canada was the chief destination for American-made shoes, receiving 37.3 percent of exports in 1998. Japan followed with 10.8 percent; Mexico, the biggest foreign market for American footwear only five years earlier, fell to just 7.1 percent. The United Kingdom, Venezuela, the Netherlands, Panama, and Honduras accounted for nearly the rest of the exports.
Like other industries, the production and sale of U.S. women's footwear has been greatly changed by computer technology. Companies have invested large sums of money to integrate the latest electronic equipment into all facets of their operations. In the research and development segment, the use of computer-aided design (CAD) is now common, and many firms have integrated it with computer-aided manufacturing (CAM) processes. The combination allows shoes to be produced in America more quickly and accurately, which dramatically lowered production costs but also eliminated jobs. The women's footwear industry has additionally brought robotics technology into the manufacturing process, utilizing robots to move shoes from one production module to the next. Computers are also used extensively in the industry's management sector, usually tracking production figures and coordinating them with distribution results and sales totals.
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