It’s certainly a special spring that we all have been through. The impact that the coronavirus has had on the whole society is huge, and for an industry like the manufacturing of quality shoes, it’s meant a whole new reality. Here’s an overview of what has happened to this industry this far, and some thoughts on what might come next.
First of all, of course the worst thing with the coronavirus will always be the ones who have passed away due to the disease, and for the families and friends of those. But since this blog is about quality shoes, it’s the impact of COVID-19 on this industry that I will write about here. This far, sadly, it’s been quite fierce. And it will likely be so for some time.
Now, of course things vary from location, but in general, the shopping in physical stores have been hit to an extreme in large parts of the world. Not only in places where it’s been proper lockdowns and everything have been forced to close, also in countries/regions where stores have remained open and life in general have been relatively “normal”, the amount of shopping done in physical stores (apart from for example grocery stores and pharmacies) have been down dramatically. And shoes are mainly sold in physical stores, even if e-commerce is growing it’s still only a fraction of the total number of shoes sold that find their customers through online shopping. It’s also a fact that clothing and shoes are an area of commerce that have seen an extra large decline, since people don’t buy new clothes and shoes when they are not going to work and stay at home entirely or at least a lot. To summarise, the demand for quality shoes have been down to very low levels the past few months, in general.
For the factories, also here it varies a bit on where they are located, but in Europe almost all shoe factories have been forced to close for at least a period of time this spring. The hit this takes on the factories varies depending on the support given by local governments. In some countries the factories have to pay the workers their salary even if the factory is closed, which is bad for the economy of the factory but good for the workers. In some countries factories haven’t had to pay workers when they are at home, which is less bad for the economy of the factory but really bad for the employees. How much financial support that’s been given from governments, and in what ways, is very mixed. There’s only one thing we can say for certain, basically all shoe factories have suffered the past months.
When the factories have been able to open up again, which in for example China has been for some time now, in Spain they were also quite quick and if factories followed a number of regulations they have been able to be open for a number of weeks, Italy came recently and England has opened up factories again just the past couple of weeks. But, it’s certainly not like they are going back to normal. First of all, in most cases, the production that have been handled after re-opening has been of orders from before COVID-19 hit, very few new orders are coming in to the factories. This means that once the old orders are done, factories have not much work anymore.
There’s so many examples I have, but to give a few, we have one of the largest Spanish factories in Almansa who are down from making 2,500 pairs a week to 500 pairs/week, another famous Spanish firm only have the factory running two days a week now, another one has been open on limited run but will be closing again from next week since they don’t have pairs to make, in Northampton one of the main producers of Goodyear welted shoes was at least temporarily saved from doing redundancies only thanks to governmental furloughs and incurred a three month shutdown, and so on, and so on. For bespoke shoemakers, it’s obviously not easier, with travel restrictions making it impossible to meet new and existing customers. As an example, when I talked with one of the most famous Japanese bespoke shoemakers towards the end of April, he said he hadn’t have one single new order during that month.
So, it’s definitely challenging times, and even if things are beginning to open up and go back to something more close to normal in many places, there’s still the fear of second waves, and a lot of uncertainties in general. When people will buy shoes like they did before the crisis, no one knows. Since the market for quality dress shoes had passed its peak in many places of the world, and lots of new brands have been entering the scene the past few years, the already tough competition have become even more fierce. This will likely result in a number of actors not surviving this global crisis, sadly.
However, something we did see after the financial crisis in 2008, is that the demand for classic shoes shoes took a hike, when people was looking for long lasting quality products to a higher degree. In times of uncertainty, it’s common that one look to something proven, something with a heritage, something sustainable. If the quality shoe industry can make sure to take advantage if this once again will be the case, it can, once again, come out stronger on the other side. Let’s hope for that progression, and we who can help in making it happen, i.e. by buying shoes, let’s contribute with that.
Tough times indeed! I guess when companies like C&J have a sale, you know it’s tough out there. I do feel a tad hopeful because I feel there will always be a market for quality: not just v high end bespoke shoes but quality RTW shoes. And I don’t know if you agree, Jesper, Shoegazing and other sites that promote or celebrate classic men’s wear/shoes have found a growing global audience….hopefully there are enough guys out there that care and want to support quality shoe makers.
Great article, as always. In Japan, one of the sectors who have taken a huge hit is the shoe repairers – people working from home and commuting less really has a huge impact on the wear and tear on shoes. In Japan, given the competition and number of new start ups in the shoe repair field over the past few years, a just small percentage in drop in turnover can quickly mean that rent payments gets affected and unfortunately hurts these artisans hard. The shoe shiners too, who rely on volume have been quite affected – went into a famous shine shop recently, and the shoes lined up on the wall were not there. You mentioned the bespoke – here again, whilst top end products have a different elasticity in a downturn, the feel-good factor of wearing a nice bespoke pair is fast disappearing in a world which is dressing up less, and wearing masks somehow does not go hand in hand with feeling and looking good. I’m a little bleaker on the outlook than most, and the overcapacity in the Japanese bespoke and shoe repair business could be severely affected. Despite the reopening optimism we are seeing around the world, the virus has not gone away, and I fear a year down the road we could be in a worse position before we reach a new equilibrium.
@DAIZAWAGUY I agree with you regarding the shoeshiners however for the cobblers this will be merely a blip. Once the population starts moving again folks will choose repair than buy anew, I believe the mindset will be to embrace dropping off and prolonging the life of a favourite pair rather having to risk than the certainty of having to talk to a shoe sale assistant for 30 mins. lol
Anthony: I hope and think that there’s always room for quality products like the ones I write about. Then things go in cycles, and from time to time they will be more popular than other times, when also “regular people” buy them to a larger extent.
Daizawaguy and Allan Donnely: Interesting thoughts! Definitely think it’s like you say Daizawaguy that cobblers and shiners have quite low margins in Japan atm, with the growth and competition that has been the case recent years. Likely a few will duck under, and then as Allan says the ones remaining will have good amount of work when people start living their more normal lives.
Really, tough time for the shoe industry. Most of the outlets have sales down up to 50 percent even after reopening of stores. The impact is so hard it may take a very long to return to the usual business activity. The average selling price of the footwear industry may also be lower due to the expected discounts as companies try to convert the limited footfalls into sales post Covid-19 to shore up their cash flows and liquidate inventory. other factors, such as lower disposable incomes, consumer sentiment, closure of educational institutes, offices, public spaces, and a drop in movements, will keep the demand for footwear subdued in this fiscal.
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Raj Kumar: Yup, tough times indeed.