NEWS News in brief . .


The Office for National Statistics in the U.K. said that in May, apparel and shoe stores saw sales increases of 6.6 % in value and 7.1% in volume compared with the same month last year, performing better than some other sectors.The country’s overall retail sales rose at lower rates of 4.4 % in value and 2.2 % in volume during the same month. Price increases are expected across the board Amphibiox is part of Geox' new strategy Valleverde has sold its brand rights for China Investment firm buys Sioux, avoiding bankruptcy Garant in Germany has new management Pentland stays strong in crisis Aldo has new lines for JCPenney and Kohl's Italian shoemakers get wage hikes in new contract Brazilian firms expand as a result of tariffs on China Big American retailers did well in June Thailand wants to be an Asian shoe center Italian post office launches a tender for shoes


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Expo Riva Schuh took place just as the Chinese government announced


on Saturday June 19, shortly before the G20 meeting in Toronto, that it would stop pegging the value of the yuan to the U.S. dollar, as it has done over the last two years. However, Chinese government officials hastened to add that this does not necessarily mean an appreciation of the yuan in the foreseeable future. Floating against a basket of currencies like before 2008, the yuan may


even go through periods of depreciation against the dollar, Chinese officials said, stressing than its appreciation was not in China’s interests. Immediately after the announcement, the yuan recorded an increase of 0.44 % against the dollar to 6.797 RMB, but economists don’t see it appreciating by more than 3 to 5 % per year in the foreseeable future. In the three years before its coupling with the dollar, it rose by 21 %. The free float of the Chinese yuan/renmimbi is expected to have less of


an impact on the cost of shoes imported into Europe than local inflation, the rising cost of raw materials and the recent devaluation of the euro. A higher value of the renminbi would escalate the cost of sourcing


products from China, especially for European companies, which have seen the value of the euro decline by almost 20 % against the U.S. dollar in recent months, although it recovered slightly in the last few days. European sourcing managers, who are still covered by dollar futures for the next few months, indicate that they are getting strong pressure from Chinese manufacturers to jack up their purchase prices in view of rising labour costs and higher commodity prices, coupled with higher freight costs. The smaller companies are also having trouble securing shipments on time. While they are suffering less than European companies from the higher


cost of sourcing from China, some American companies with strong brands have been able to pass on some price increases lately to U.S. retailers as they are coming out of the worst economic crisis in decades. Wolverine World Wide has already raised prices in the U.S. but has not


Price increases may be inevitable


Price increases of 10 % or more may become inevitable for suppliers and


retailers in Europe from the spring/summer 2011 collection if present circumstances persist such as the weakness of the euro, the strength of the Chinese renminbi and the higher cost of raw materials, shipping and Chinese labour. Although the price lists for that season have not yet been finalised, that


was pretty much the consensus among suppliers and retailers at the big Expo Riva Schuh show in Italy last month. Chinese exhibitors at the fair said they are already charging between 3 and 5 % more in renminbi and 7 % more in U.S. dollars, which would translate into an increase of more than 20 % in purchase costs. In general, their European clients are covered through futures against the increase in the value of the dollar only until the end of this year. On top of that, the cost of polyurethane and other materials has risen by


more than 15 % since January. On the other hand, there have been some indications recently that leather prices have reached a peak and are declining after increases of up to 50 % in raw hide prices over the last few months. On the positive side, there is some hope that the current antidumping


duties on Chinese and Vietnamese leather shoes may be phased out after May 2011. Still, the inflationary factors in the Far East have led to a return of some of the production to low-cost countries that are closer to the main European markets such as the Ukraine and parts of North Africa – a move that is also making it easier to place orders for quick delivery during the selling season. Discussing the price issue at the traditional Sunday Erfa meeting during the Expo Riva Schuh show, top executives of major Austrian and German retailers said that they will have to raise prices for the spring/summer 2010 collections, although some psychological price barriers will make it difficult to pass all the cost increases on to the final customers.


yet found resistance from retailers, according to the group’s management, which told a recent investors’ conference that it sees sourcing costs rising by low- to mid-single digits in the second half of this year and by mid- to high-single digits in 2011.


Article supplied by www.shoeintelligence.com


Geox accelerates Innovation Geox is coming out with a new line of footwear called Amphibiox which, it


says, is completely waterproof and breathable. Directly competing with the OutDry and Gore-TexSurround processes, Geox’ new technology features a micro-porous membrane that clings to the inside of the upper, and it in turn is fused to the rubber sole, which also “breathes.” The shoes protect the feet from wet conditions but allow moisture inside to evaporate because of a special lamination process that leaves no space between the membrane and the upper. Designed by Geox, the membrane belongs, like Teflon, to the EPTFE (expanded polytetrafluor) family. The first Amphibiox lines to have been developed are relatively classical


casual, comfort and business men’s shoes, and they will be available for the fall/winter season in certain markets in Europe and North America – notably in Geox shops in Germany, Austria and Switzerland – at retail prices of between ¤110 and ¤130 per pair. A marketing launch will be made during the GDS fair in Düsseldorf in September. Geox plans to announce another important new technology next year.


The company, which employs about 80 people in its R&D department and invests about 2 % of sales in R&D, prides itself on owning more than 40 patents for new technologies in shoes and apparel, most of which have not yet been applied. The company’s new logistics center near Montebelluna, which is also


going to house its new headquarters, should allow an increase in the proportions of reorders made by retailers from about 5 to 10 or even 15 % of their total orders.


Article supplied by www.shoeintelligence.com 6 • FOOTWEAR TODAY • AUGUST 2010 www.footweartoday.co.uk


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