Some U.S. Shoe Firms Find a Way to Survive

Two by two, foreign-made shoes have captured more than three-quarters of the U.S. retail footwear business. Last year alone, the march of imports helped close the doors of more than 60 shoe factories in the United States.

Gloom is more obvious than hope in an industry that has lost 128,000 jobs since the late 1960s and was disappointed in 1985 by President Reagan’s veto of quotas on imported shoes and textiles.

Nevertheless, many U.S. shoe manufacturers are making money despite competition from such nations as Taiwan, South Korea, Brazil and Italy, whose shoe industries are aided by cheaper labor and other factors.

The domestic manufacturers are finding clever ways to slake Americans’ thirst for shoes. On average, Americans buy more than five pairs of footwear a year, ranging from bedroom slippers to rubber boots, according to the Footwear Retailers of America.

An upstate New York company makes steel-toed safety shoes that resist “barnyard acid,” commonly known as manure. A New Hampshire company brags that its leather boots are guaranteed waterproof. And an Arkansas company makes glove-soft shoes from the hides of deer that are killed by hunters.

Each of the companies has profited by discovering a market niche--a segment of the footwear market that foreign manufacturers have trouble penetrating or have chosen not to go after.

Charge Premium Price

Carving out a niche enables a shoe company to differentiate itself from the imports and charge a premium price for its products, executives of the companies say.

“Any product category we do business in, inevitably we’re the highest priced product in that category. But usually it’s not by more than 10% or 15%, and the customers are willing to trade up,” said Larry Klane, director of sales for Timberland Co. of Hampton, N.H.

Timberland’s rugged, upscale line--including the leather boots that are guaranteed waterproof--brought in revenue of nearly $70 million last year, up from about $58 million the year before, outsiders estimate.

“There’s no question, people who are able to develop quality footwear with a name brand do develop a niche for themselves and have a very good future in domestic manufacturing,” said Charles Murray, president of Endicott Johnson Corp. of Endicott, N.Y., whose products include the premium-priced, manure-resistant safety shoe.

Osceola Shoe Co. of Osceola, Ark., claims to be the world’s dominant manufacturer of deerskin footwear, a novelty that President Gerald Greenblatt says gives it an essential edge. Customers are willing to pay $60 and up for a pair of deerskin shoes because the uppers are deliciously soft, he says.

“We live on the edge of a precipice, being a domestic manufacturer,” Greenblatt said. “We still have to scramble with new styling and innovations, but this (deerskin) gives us a reason to expect that we can continue to grow in spite of imports.”

Built-In Advantages

Domestic manufacturers have some other built-in advantages over imports that enable them to compete in the mid- to high-priced market segment. Their factories are the most mechanized in the world, offsetting in part the cheaper labor in other countries.

“In Brazil, there are four workers for every one in a U.S. factory,” said Richard Simpson, owner and president of New York-based Verde Shoe Co. and its parent, Toronto-based Rism International, which import inexpensive shoes from Brazil.

Also, U.S. makers can keep retailers supplied with shoes in half-sizes, special widths and a wider range of styles because they are closer to the markets. It takes a well-stocked U.S. manufacturer 45 to 60 days to answer a restock request from a shoe store, compared to six to nine months for many foreign manufacturers, according to Peter Mangione, president of Footwear Retailers of America.

Aside from such practical considerations, some retailers and customers simply prefer buying shoes made in America if the price difference is not too great, said Olha Holoyda, an analyst for Stifel, Nicolaus & Co. in St. Louis.

Endicott Johnson, Timberland and Osceola, along with hundreds of other companies, exhibited their lines of fall and winter footwear recently in New York at the annual National Shoe Fair of America, the nation’s largest footwear trade show.