This category includes establishments primarily engaged in the production of men's footwear designed for dress, street, and work. Establishments primarily engaged in the production of such protective footwear as rubbers, rubber boots, storm shoes, galoshes, and other footwear with rubber soles vulcanized to the uppers are classified in SIC 3021: Rubber and Plastics Footwear. Establishments primarily engaged in the production of athletic shoes and youths' and boys' shoes are classified in SIC 3149: Footwear Except Rubber, Not Elsewhere Classified, and those manufacturing orthopedic extension shoes are classified in SIC 3842: Orthopedic, Prosthetic, and Surgical Appliances and Supplies.
316213 (Men's Footwear (except Athletic) Manufacturing)
In the late 1990s, the men's footwear market was being shaped by two powerful forces. First, the American footwear industry had continued to be affected by the increasing dominance of imported shoes. Although 178 U.S. factories were engaged in the manufacture of men's dress, casual, and work footwear in the late 1990s, shoes produced in nations such as China, Brazil, and Indonesia accounted for over 80 percent of the men's footwear purchased by American consumers—continuing a trend that began more than three decades ago. Second, the men's footwear market has also changed as more casual work attire has become more acceptable in American offices. As a result, men's dress shoe sales have fallen, while those of casual, dress/casual, and outdoors shoes have soared. After declining from $2.01 billion in 1997 to $1.69 billion in 1998, total industry shipments in 2000 climbed to $2.02 billion. The cost of materials grew from $974 million in 1997 to $1.16 billion in 2000.
New England had become the center of a thriving footwear industry as early as 1800, and by 1850, the United States was exporting large quantities of high quality, inexpensive shoes to England and other European countries. Micajah Pratt, who began making and selling shoes in Lynn, Massachusetts in 1812, was considered an innovator in the industry. He was among the first to use standard patterns and sole cutting machines. Pratt eventually employed about 500 workers; many of whom lived in other towns and worked at home; with this arrangement he was able to produce almost 250,000 pairs of shoes annually.
Shoemaking became industrialized in the early 1860s, prompted by the development of machinery for attaching the leather part of a shoe, known as the upper, to the sole. In 1858, Lyman R. Blake of Abington, Massachusetts, invented a machine that attached the leather uppers with nails and wooden pegs. Soon after, Gordon McKay, also of Abington, improved on Blake's invention by substituting thread for the cumbersome nails and pegs. Recognizing the threat that McKay's sewing machine posed to their livelihood, shoemakers staged the first general strike in the footwear industry in 1859. Nevertheless, by 1864, the Blake sewer was used by most U.S. shoemakers.
The most important technological advance, however, was probably the shoe-lasting machine, invented in 1882 by Jan Ernst Matzeliger, who also worked in a Lynn shoe factory. "Lasting" was the process of shaping the leather upper over a wooden form before attaching it to the sole. Matzeliger's shoe-lasting machine, patented in 1883, allowed shoes to be mass produced for the first time.
Technology has remained relatively unchanged in recent years, but the U.S. industry has been dramatically altered nonetheless by the growing penetration of imports versus domestically produced shoes. According to Footwear Industries of America (FIA), import penetration in the American shoe market increased from 21.5 percent in 1968 to 89.5 percent in 1995. As import shoes claim the market, domestic production of footwear has dropped. Between 1978 and 1995, the pairs of shoes manufactured by companies in the United States sunk from over 418 million to about 145 million. And while the export of American-made men's footwear to other countries is still a significant factor at around 22 percent of the total, according to FIA statistics, primary destinations have shifted from England and other European countries a century ago to Japan, Canada, and Mexico.
Men's footwear accounts for a substantial portion of the total pairs of non-rubber footwear produced by companies in the United States. In the late 1990s, nearly 34 million of the 159 million total pairs of these shoes made in America were men's, according to FIA. These shoes were being released into a receptive environment. While the overall shoe market increased at an annual rate of less than 2 percent throughout the late 1990s, three men's footwear categories experienced annual double-digit growth—hiking boots, work boots, and sandals. According to FIA, men's retail footwear sales in the United States even outperformed women's in the late 1990s, as men' shoes generated $17.4 billion in sales, compared to women's $16.8 billion. In fact, industry shipments for men's shoes grew from $1.82 billion in 1999 to $2.02 billion in 2000, while industry shipments for women's shoes declined from $515 million in 1999 to $373 million in 2000.
Nevertheless, U.S. made men's footwear comprised only a small percentage of these booming retail sales. In the late 1990s, 190.8 million pairs of men's shoes were imported into the United States (accounting for better than 15 percent of the 1.23 billion pairs of shoes imported that year). American production has decreased every year since 1968. While import shoes represented only 21.5 percent of those purchased in the United States in 1968, more than 92 percent of shoes bought in the United States in the late 1990s were manufactured abroad. In the men's footwear segment of the market, more than 80 percent of the shoes consumed by Americans in the late 1990s were not produced domestically. China was the most voracious exporter to the United States, producing more than 72 percent of footwear imports to the United States. Brazil was the second most popular country of origin for foreign shoes purchased in the United States, but it lagged far behind China, accounting for only 6.7 percent of the import market. Indonesia stood in third place at 4.8 percent, Italy in fourth at 3.9 percent, and Spain in fifth at 1.8 percent. This decline in U.S. based shoe manufacturing has taken its toll on American factories. As production continues to shift overseas to take advantage of lower labor costs, American facilities have closed at a rapid rate. Employment in the industry decreased from 17,182 to 14,155 between 1997 and 2000. Over the same time period, the number of production workers fell from 14,088 to 11,517.
U.S. companies have striven to find other markets for their goods. Approximately 27 million pairs of non-rubber footwear were exported by U.S. companies in the late 1990s, of which 6 million were men's shoes. Canada imported the most, with 37.3 percent of the total, followed by Japan with 10.8 percent. Mexico, the leading importer of American-made shoes in 1992 with 13.6 percent of the market, dropped to third place with 7.1 percent.
Timberland Company. A manufacturer of rugged, upscale hiking boots walking shoes, and casual shoes, The Timberland Co. has become a leader in the men's footwear market as the so-called "brown shoes" it produces have become fashionable. The company rang up $862 million in sales in 1998, and it employed more than 5,200 workers. Although Timberland was a staunch supporter of domestic manufacture, in 1994 burgeoning competition in the casual shoe market led the company to close some of its American plants and outsource production to the Dominican Republic and Puerto Rico. Timberland sells its products at its 75 independently-owned retail and outlet stores, as well as in department stores and athletic footwear shops.
Russian immigrant Nathan Swartz founded Timberland when he purchased half interest in the Abington Shoe Company in 1951. His partner died four years later and he purchased the rest. His sons, Herman and Sidney, joined him in the business, and for the next 15 years they produced inexpensive, private-label men's shoes and work boots in a converted Boston warehouse. Their dress shoes were most often sold through discount stores, while their work boots became a staple in Army/Navy surplus stores.
Sales of Abington's leather work boots increased unexpectedly around 1970, as the company was one of the first to stumble upon a new fashion trend that combined styles and gear previously favored by outdoors enthusiasts. "When we visited the stores, we saw that a lot of young people, college students, were buying them. You don't have to be a genius to know that something's going on," Herman Swartz later told INC. magazine.
Abington had by then relocated to Newmarket, New Hampshire, and in 1973 selected the "Timberland" name from a list suggested by an advertising agency. The company created a subsidiary to manufacture its new line of insulated and waterproof leather boots, which were distinguished by their thick rubber soles. It produced just 2,500 pairs that first year, compared to 490,000 shoes and boots in the Abington line.
The company initially marketed Timberland and Abington boots by appealing to hunters and fishermen who shopped the Army/Navy surplus stores, and sales of the new line were unimpressive. However, in 1975 a marketing consultant suggested the company position Timberland as a fashion item sold through upscale department stores and retail outlets. A new advertising campaign was funded through a hefty price increase and launched with the slogan, "A whole line of fine leather boots that cost plenty, and should." In 1979, Abington officially changed its name to the Timberland Co. That year, it sold 500,000 pairs of Timberland boots as revenues topped $16 million. The company opened its first retail store in 1986, and made its first public stock offering in 1987. After fierce competition in the "brown shoe" sector eroded Timberland's sales, in 1997 the company began updating its retail stores. In 1998, Timberland introduced its "beige shoe"—a hybrid between a boot and a sneaker—and in 1999 debuted its line of Mountain Athletics products, which targeted younger men.
Florsheim Shoe Group Inc. Chicago-based Florsheim Shoe Group Inc., was perhaps the best known maker of men's dress shoes in the United States in the early 1990s when it accounted for about 20 percent of the market. By 1998, though, its share had dipped and its sales reached only $244 million.
The company was founded in 1892 by Milton S. Florsheim. He created one of the earliest brand names in the shoe industry by stamping the company name into the sole of every shoe it produced. In the early 1900s, Florsheim began advertising nationally in magazines such as The Saturday Evening Post. It was one of the first manufacturers to open its own retail stores, and was credited with introducing low-cut dress shoes for men.
A consumer survey in the early 1990s found the Florsheim brand name was associated with high prices, so the company reduced prices on four of its most popular men's dress styles. In an effort to capture a greater share of the profitable casual shoe market, Florsheim launched a rash of new models aimed at appealing to younger consumers. The company's line of @ease shoes, as well as its Frogs golf shoes were introduced in the mid-1990s. Florsheim also embarked on a major redesign of its retail stores—including the bold step of offering its competitors' shoes in an attempt to increase traffic into the stores.
Other Leaders. The outdoor look pioneered by Timberland spread throughout the industry, and several other companies were also achieving success with it. Wolverine Worldwide tallied $669.3 million in sales in 1998, at least partially because of its appeal. Wolverine also manufactures Hush Puppies, which are extremely popular with baby boomers. Hush Puppies sales have soared as more relaxed office dress codes have empowered men to wear casual shoes to work. The Rockport subsidiary of Reebok International Ltd. is another key player in the men's footwear industry. With recorded sales of $447.6 million in 1996 Rockport was one of the few bright spots for the parent company.
The men's footwear industry employed 14,155 people in 2000 and 11,517 of them were production workers, according to the U.S. Census Bureau. Production employees earned an average of $9.82 per hour in 2000. A rough comparison of this figure with China's basic monthly wage for its shoe-making workers of about $50 graphically illustrates why production has largely shifted to those countries in recent years. Even the average salary in Taiwan, reportedly the highest among major foreign competitors, was less than half the U.S. amount.
Considered one of the most open footwear markets in the world because it was one of the few industrialized nations that did not impose high import tariffs, FIA reported that imports to the United States grew 229 percent—at an average annual rate of 11 percent—from 1978 until 1998.
After 1968 (when President Lyndon Johnson cut tariffs in half) several attempts were made to impose higher import tariffs, most notable of which was the Textile, Apparel, and Footwear Act of 1990 vetoed by President George Bush. Similar bills had been rejected by Congress in 1985 and 1988. Also during this time, the industry filed complaints about unfair trade practices with the International Trade Commission (ITC), but in 1984 the ITC ruled that the U.S. footwear industry was not being harmed by imports. A Senate recommendation for five years of global quotas was tabled in the early 1990s.
After the Textile, Apparel, and Footwear Act was vetoed in 1990, the FIA, which had lobbied for import protection, effectively gave up the fight. Fawn Evenson, then executive director of the FIA, told The Journal of Commerce and Commercial in 1992, "We literally spent millions of dollars on trade cases. We almost went broke trying to protect jobs."
In 1990, FIA voted to expand its membership to include importers and tacitly supported the North American Free Trade Agreement (NAFTA) by focusing its efforts on ensuring that Mexico would not become a transit point for duty free shoes from other countries, most of which imposed tariffs of 25 percent or more on U.S. exports or locked out U.S. companies entirely. Evenson explained, "We are importers. We've stopped quota battles. We're going to spend a lot more time on market access and on exports. We're now going to devote our efforts to companies that are surviving."
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