Shoe Industry Investing
- Shoe Industry Key factors
- Industry requests exemption from China Tariffs as 70%, and $11b+
- China clones EVERYTHING! Huge ripoffs sold in "cheap" gray markets that large companies ignore!
- Luxury-like Conspicious consumption models even for Urban Poor!
- Massive Markups esp. on Branded shoes! Luxury goods
- US MNCs take bulk of profits! Top 1% benefit from Corporate Stocks!
- Rapidly shifting production to Vietnam, Bangladesh to protect OWN profit margins
- Why not Shift to India?
- Notes, Resources
- Key Resources
Shoe Industry Key factors
Industry requests exemption from China Tariffs as 70%, and $11b+
A whopping 70% or $11.4 b of shoes sold in the U.S. comes from China, according to the FDRA - Footwear Distributors & Retailers of America, an industry organization with more than 500 members, including Walmart, Nike, Crocs and Steven Madden.
Footwear imported from China is already being hit with upwards of 67% duties - THIS SEEMS LIKE A LIE!
PKJ - how is this? Isn't max Trump is 25% - and usually not on consumer? Only on Aug 1st, did Trump announce 10% duties will take effect on Sept. 1, impacting consumer goods such as apparel, home textiles like bedding and shoes.
In May 2019 more than 170 shoe retailers and brands — including Under Armour, Ugg and Foot Locker — sent a letter to Trump asking him to not raise tariffs on footwear, saying: “These tariffs would mean some working American families could pay a nearly 100% duty on their shoes.” (Trump in May was considering a 25% tariff hike.) [Now they claim] a popular type of canvas “skate” sneaker could increase in price to $58.69 from $49.99 with an additional 10% tariff. The price of a typical hunting boot could jump to $222.27 from $190. And a popular performance running shoe could rise to $187.50 from $150.
China clones EVERYTHING! Huge ripoffs sold in "cheap" gray markets that large companies ignore!
Luxury-like Conspicious consumption models even for Urban Poor!
Psychologists tell us that there are key reasons why we buy luxury goods, even when many of us really can’t afford them. 1. “Signaling” — using luxury goods to “show off” and send a clear signal that you measure up to your peers, or to others in your community.
Celebration/Self-Rewards. We often purchase luxury goods to “mark” significant accomplishments in our lives.
Boost low self-esteem.
- “when you’re experiencing low self-esteem, you’re more likely to feel a stronger desire to acquire high-status goods ...” -Time
Massive Markups esp. on Branded shoes! Luxury goods
However the markups are HUGE for official brands.
Nike Air Jordans made in China cost $16 but listed on Amazon for $250 to $550 a pair, depending on the style and color - hugely varying
US MNCs take bulk of profits! Top 1% benefit from Corporate Stocks!
Nike’s stock, for example, has tripled in recent years as it benefitted from huge margins!
Since the wealthiest Americans now own 90+ percent of all common stocks, they take home nearly all of the gains when stock prices surge.
Lot of skimming by MNC CXOs
Nike’s Mark Price has earned $61 million in just the last three years.
Little trickle down in form of jobs or higher wages.
- Buying luxury goods usually undermines American jobs, since almost anything you buy instead probably entails a lot more home-grown labor.
Rapidly shifting production to Vietnam, Bangladesh to protect OWN profit margins
Nike, Under Armour and Puma have steadily been decreasing their reliance on China, shifting resources to places like Vietnam.