Crisis for footwear suppliers
Crisis for footwear suppliers
Published: 08 January, 2009
www.footweartoday.co.uk
Richard Kottler, Chief Executive of the British Footwear Association (BFA) has identified a number of worrying trends that are putting many footwear companies under severe pressure.
In addition to the current global downturn, footwear suppliers in the UK are fighting against a number of other problems that are exacerbating the situation.
These issues include:
• The difficulty in obtaining insurance cover on goods supplied to an ever-increasing number of retailers
• The increasing drift towards 90 day terms or more
• Retention of title issues when faced with vulnerable customers
• The inability of suppliers to pass on any cost increases to retailers (whether these be factory cost increases, transportation charges, currency issues, anti-dumping duties etc)
The BFA has been in discussion with its members, both private label suppliers and brands, about the need to raise the awareness of the difficulties faced in trading these days. They are not asking for special favours and are capable of fighting their own battles but are concerned that they increasingly have to manage their exposure by limiting supplies or chasing debtors aggressively. To help meet retailers' commitment to maintaining prices, they are having to re-engineer products, wring savings out of the supply chain or look for new supply sources (especially in the light of the continued Anti-Dumping Duty for product from China and Vietnam).
Chief Executive of the BFA, Richard Kottler, said, "There has never been a time when the partnership between supplier and customer needed to be closer. To continue to survive in the UK the need for both sides to protect margin is crucial. Our members have become adept in squeezing costs out of the entire process from sourcing to delivery, but this cannot be the sole solution.
The continuation (at least for the next 8 to 15 months) of Anti-Dumping Duty is not helping the volume supplier and a number of companies, faced with this and with increased factory costs in China are moving production to other countries - India and other parts of the Far East. The fear is that when the recession is over that there will be fewer or smaller British companies left in this business."