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Yahoo
5 days ago
- Business
- Yahoo
Nike, Adidas, Puma, Steve Madden, Skechers, Caleres + Dozens More Companies Urge Trump to Exempt Shoes From Tariffs in FDRA Letter
The footwear industry is making sure its voice is heard in Washington. The Footwear Distributors and Retailers of America (FDRA), along with more than 80 leading U.S. footwear firms, on Tuesday sent a letter to U.S. President Donald J. Trump urging him to exempt footwear from his administration's reciprocal tariff plan. More from WWD Looming U.S. Tariffs Drove Swiss Watch Export Surge in April Tiptoeing Around Trump, Fashion Refines Trade War Rhetorical Style Is Deckers' Hot Streak Coming to An End? Hoka's U.S. Slowdown + Tariff Worries Weigh on Stock 'We are hit particularly hard by the tariff actions, because the U.S. government already places asignificant tariff burden on our industry before any new tariffs are added,' the letter stated. It cited as one example children's shoes, which has 'rates of 20 percent, 37.5 percent, and higher, before accounting for the reciprocal tariffs.' The letter also noted that the new reciprocal rates are 'stacked on top of the existing high footwear tariff rates,' resulting in many American footwear companies now having to pay tariffs ranging from 'more than 150 percent to nearly 220 percent.' Significant price increases preclude American consumers from having affordable footwear options, the letter stated. More importantly, the letter emphasized that 'these tariffs will not drive shoe manufacturing back to the U.S.' On the contrary, the footwear firms emphasized that the new tariffs will remove the 'business certainty' that is needed to take on significant capital investment required to both plan for sourcing shifts and invest in the machinery and materials needed to produce shoes in the U.S. 'We are in fact the one industry where tariffs do not significantly increase domestic production; tariffs just become a major impact at the cash register for every family,' the letter stated. Moreover, many footwear firms don't even know how they're going to pay the costs of already shipped merchandise that's now arriving on U.S. shores, and the inability to pay would place many U.S. footwear businesses 'at imminent risk.' The companies that signed the letter—including Adidas, Brooks, Caleres, Columbia Sportswear, Crocs, Designer Brands, Genesco, Nike, Puma, Rocky Brands, Skechers, Steve Madden, Under Armour, VF Corp., and Wolverine Worldwide, among others—added that they are 'deeply concerned about imminent U.S. footwear job losses, added costs for consumers, and reduced consumer spending that will fundamentally hamper our industry and harm the entire U.S. economy.' The signers of the letter are seeking a more 'targeted' approach—one that focuses on strategic items rather than basic consumer goods—that would advance critical national security imperatives without causing unnecessary pain to American families.' The letter to Trump was also sent to Howard W. Lutnick, U.S. Secretary of Commerce, Jamieson Greet, U.S. Trade Representative, and Scott Bessent, U.S. Secretary of the Treasury. Higher tariffs have been a growing concern since Trump won the presidential election last November. Crocs CEO Andrew Rees told investors in February during a conference call on fourth quarter earnings results that the firm was embedding tariff increases on goods from China and Mexico, based on then-expected rates that were presumed to stay in place for the remainder of 2025. FDRA data showed that footwear sales plunged 26.2 percent for the week ended Feb. 22 from year-ago levels on fears over tariff increases. But then Trump disclosed his administration's plans to implement reciprocal tariffs on April 2, with the new rates blowing existing duty estimates out of the water as footwear firms scrambled to figure out how to adjust their business model to take into account double-digit percent rate increases. And if the reciprocal tariffs weren't bad enough, Trump went on to hike duties on goods from China, with some as high as 145 percent. Currently, there is a 90-day pause on the reciprocal increases, while keeping a universal base increase of 10 percent, on the hopes that other nations will come to the table to negotiate an improved trade deal that benefits the U.S. The exception is China, for which there is no 90-day pause. Meanwhile, footwear industry executives have formed a forward-thinking research think tank, Footwear Innovation Foundation, that will help the shoe sector become more proactive in reshaping the future of footwear in the U.S. Best of WWD All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos]
Yahoo
6 days ago
- Business
- Yahoo
Industry Leaders Launch Footwear Innovation Foundation
Footwear industry executives and CEOs see necessity in becoming more proactive than reactive. Veterans in the sector have formed a research think tank, Footwear Innovation Foundation (FIF), to focus on how to best shape and transform the future of footwear in the face of ongoing challenges. More from WWD Modern Retail, Unified: How Skypad and Famous Footwear Aim to Set a New Standard for Brand Collaboration Tech-driven Beauty: How Perfect Corp. Is Shaping the Future of Personalized Care With AI The Only Nike Memorial Day Shoe Deals Worth Shopping Before They Sell Out FIF, launched Monday, is an independent 501(c)(3) nonprofit organization that has its home base in Reston, Va. It operates separately from the Footwear Distributors and Retailers of America (FDRA). Andy Polk, FDRA'a senior vice president, will manage FIF's day-to-day operations. The FDRA will continue to work on projects such as its supply chain tracing tool launched last October, since that's driven by current regulations, according to Polk. 'The FIF really works in white spaces looking to solve beyond current work efforts, seeing where we can fill gaps where there is no little or no data and knowledge, as well as how we establish talent pathways from outside the industry inward,' Polk said in an email to FN. The FDRA will continue to focus on issues facing the footwear industry today, such as customs, tariffs, sourcing, supply chain, regulatory matters, to name a few. The FIF is a platform dedicated to shaping the future, Polk said, adding, 'We initially tried to build that within FDRA, but its mission and tax status limited our ability to pursue real R&D (research and development) and long-range innovation work.' FDRA is a 501(c)(6) organization. Donations to fund the FIF's research work are 100 percent tax free. 'The FIF board meets at least twice a year to guide our direction, evaluate new ideas, and ensure our projects serve the industry as a whole,' he said. 'Much of our day-to-day job is meeting with academics, labs, experts and industry leaders to talk about the future, provide key innovation insights to support people's operations, and running dynamic forward thinking projects to push us forward.' Polk said that while FIF is autonomous, it remains connected with the FDRA, which funded start-up costs and legal fees until shoe companies began their donations. 'We rely on FDRA for market intelligence and strategic insights to make sure we have a good pulse on where things are headed. We also use FDRA's reach to help build a broader community around innovation,' he said. Without providing specifics, Polk said one project underway is an exploration of new technologies to help expand domestic manufacturing. 'We tapped into FDRA's membership to reach out to get key insights into what technology was being used to compare with what new technologies we are seeing in other industries that we could adapt and deploy. That is how 1 + 1 becomes 3,' he said, adding that many academics and groups don't understand footwear and spend years working to provide solutions where they have major knowledge gaps. 'We don't have that problem. We have all the internal knowledge we need to make sure when we go out to find new ideas, people and technologies [that] we know how [to] best feed back into our [footwear] companies,' Polk explained. So, why is now the right timing for a research think tank? 'In our industry, we spend so much time putting out fires that we rarely get the chance to ask the bigger questions about the future,' Andy Gilbert, former president of Genesco Brands Group and now FIF chairman, said in a statement. 'While tariffs are rightly the full focus of today's discussions, they won't be the last challenge we all face. We need to stop playing defense and start going on offense to prepare for the additional complex issues ahead.' For Gilbert, the FIF is the go-to place where the footwear industry can seek guidance in planning for the future. 'It's quickly becoming a hub for innovation, with companies and global partners already coming together to help push our industry forward,' he said. While the FIF has been working behind the scenes to set up the organization, it has also help fund some projects, such as one on shoe waste with Fashion for Good, according to Polk. Other projects in progress include helping companies comply with U.S. and European Union sustainability regulations, the development of an emissions study to provide updated, real carbon data benchmarks for footwear, and a program aimed at identifying new talent and ideas outside of the footwear industry to transform existing products and business models. Companies that are helping set up and/or financially supporting the foundation include Rack Room Shoes, Steve Madden, Shoe Show Inc., Deckers Brands, Skechers, Caleres, Target, BBC International, Michael Kors, Oka Brands, RG Barry, PLC Detroit, FDRA, Jones & Vining, Insite Performance Insoles, and Souls4Soles, among dozens of others, FIF said. In addition to Polk and Gilbert, FIF board members include Brooke Beshai, vice president, sustainability and compliance, Deckers Brands; Andee Burton, direct, product and sourcing sustainability, Caleres; D'Wayne Edwards, president of PLC Detroit; Sara Irvani, board director at Oka Brands, Matt Priest, president and CEO of FDRA, and Jung Yoon, senior vice president, production and sourcing, Michael Kors. The FIF website also lists a 14-member innovation advisory council to provide guidance on which projects to support and launch. 'If we want to change the future of footwear, we must change who gets to shape it. FIF will help bring new voices, entrepreneurs and thinkers to the table—not just from our industry, but beyond. It is the next step the industry is taking to a better future,' FIF board member Edwards said. 'Our industry is facing a convergence of challenges—supply chains, sustainability goals, and compliance demands are all intersecting in unprecedented ways. That includes the need for new models and process innovation to expand domestic footwear manufacturing,' Irvani, an FIF board member, said. 'The Footwear Innovation Foundation is stepping up to ask the tough questions, bring in fresh perspectives, and help us innovate through—not just around—what's ahead. I'm energized by what we're building as a true hub for progress and collaboration across the industry.' Best of WWD Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Crocs Collaborations From Celebrities & Big Brands You Should Know Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
FDRA Pushes Trump For Relief as Vietnam Tariff Talks Resume in June
The Footwear Distributors and Retailers of America (FDRA) is hoping it can secure some reset in trade policy for the footwear sector. In recent months, President Donald Trump has disclosed the implementation of reciprocal tariffs, and then walked back on the higher duties by putting them on hold for an average of 90 days. And while it can be argued that even at the temporarily reduced rates that tariffs are still too high for footwear, the timeframe for the freeze does give countries a period to allow for talks centered on the renegotiation of trade agreements. More from WWD Golden Goose Q1 Sales Grow 11 Percent, Brand Expands Global Presence Looming U.S. Tariffs Drove Swiss Watch Export Surge in April Tiptoeing Around Trump, Fashion Refines Trade War Rhetorical Style 'We applaud President Trump for taking a more thoughtful and strategic approach to the tariff policy — clearly listening to the concerns we've shared and the conversations we've led, one that acknowledges the real-world challenges we face in the footwear industry,' said FDRA president and CEO Matt Priest on Wednesday. 'For too long, outdated tariffs have driven up costs for working families and threatened jobs across our industry. This shift in direction is both refreshing and necessary.' Priest noted that increasing footwear manufacturing in the U.S. isn't feasible due to constraints involving supply chain, labor and costs. And on Sunday, even Trump—to the dismay of the National Council of Textile Organizations—acknowledged what products might be best made state-side. 'We're not looking to make sneakers and T-shirts. We want to make military equipment. We want to make big things,' Trump said to reporters as he was about to board Air Force One. He elaborated: 'I'm not looking to make T-shirts to be honest. I'm not looking to make socks. We can do that very well in other locations. We are looking to do chips and computers and lot of other things, and tanks and ships.' Priest said that the recognition by Trump and his administration of those constraints gives the U.S. an opportunity to both reset decades of misguided trade policy and move the footwear sector forward with smart, targeted solutions. 'We're encouraged by the President's leadership and urge the administration to stay on this path,' the FDRA CEO said. 'By embracing a modern, pragmatic trade framework, the U.S. can support consumers, protect American jobs, and finally put the footwear industry on the right track.' As for what happens when the first of the 90-day pause period for most global reciprocal tariffs ends on July 9 is anyone's guess. Last Friday, Trump threatened on social media a 'straight 50 percent tariff on the European Union' beginning on June 1 when he became frustrated that talks between the U.S. and EU were 'going nowhere.' But then on Monday he agreed to restore the July 9 deadline to allow for talks to continue between the U.S. and the 27-member nation bloc. Thus far, the U.S. reached a trade deal with the U.K. earlier this month. In the background, there are talks occurring between the U.S. and a number of other countries. One source told Footwear News that negotiations in progress involve 'several dozen countries,' but this individual declined to disclose country names. This person did indicate that there is pressure to get deals done by the timeline due to uncertainties over whether Trump would extend the deadline or put rates back up to their reciprocal level. Treasury Secretary Scott Bessent said on May 18 that tariff rates would rise to levels Trump threatened on April 2 if countries fail to reach trade agreements during the 90-day pause. Vietnam, where the bulk of athletic performance footwear is produced, concluded a second round of tariff talks in Washington last Thursday on the Bilateral Agreement on Reciprocal Trade between Vietnam and the U.S. According to a May 22 statement from Vietnam's Ministry of Industry and Trade, the two negotiating delegations—led by Vietnam Minister Nguyen Hong Dien and U.S. Trade Representative Ambassador Jamieson Greer—'made positive progress,' identifying issues of agreement and reaching consensus on matters that need further discussion. The two sides also set time frames for feedback on the draft agreement, proposed text, and organized online meetings to prepare for the next negotiation session in early June 2025. Best of WWD All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
Under Armour Moving in Right Direction Despite Still-challenging Results
Under Armour's reset has yet to take root but things are headed in the right direction. One year after beginning a company-wide restructuring, the Baltimore-based sports brand reported fourth-quarter and yearend results that, while not pretty, managed to beat Wall Street expectations. On Tuesday, Under Armour reported an operating loss of $72 million and an adjusted operating loss of $36 million after transformation expenses, restructuring charges and litigation settlement expenses in the fourth quarter ended March 31. The net loss was $67 million and the adjusted net loss was $35 million. More from WWD Shoe Prices Sank in April, the Sharpest Drop in 21 Months, Despite Uncertainty Around Tariffs Under Armour Continues to Struggle, but Makes Progress on Restructuring Plan FDRA, AAFA, NRF, RILA: U.S.-China Tariff Pause A Welcome Start, But More Needs To Be Done Overall sales were down 11 percent to $1.2 billion — which beat analyst expectations of a 12.4 percent drop — and North American sales continued to decline, also dropping 11 percent to $689 million while international revenue fell 13 percent to $489 million. By region, sales were down 27 percent in Asia-Pacific, 10 percent in Latin America and 2 percent in Europe, Middle East and Africa. Much like the results, analysts were mixed in their response to the numbers on Tuesday. Cristina Fernandez of the Telsey Group said Under Armour's 'return to sales growth remains unclear. The company has work to do to change perception of the brand, attract more consumers and gain shelf space at wholesale accounts.' And Joseph Civello of Truist Securities said the results cleared 'a low bar,' and he believes 'upside will be limited until there are clearer signs that fundamentals are improving.' Nonetheless, the wholesale business also remained challenged, dropping 10 percent to $768 million in the quarter while direct-to-consumer fell even more, dipping 15 percent to $386 million. This includes a 6 percent decline at the company's owned and operated stores and a 27 percent decline in e-commerce sales, which accounted for 37 percent of the total DTC business. The company attributed the declines to 'planned reductions in promotional activities.' By category, apparel revenue decreased 11 percent to $780 million in the quarter, footwear was down 17 percent to $282 million and accessories dipped 2 percent to $92 million. Despite the struggles, Under Armour president, chief executive officer and founder Kevin Plank put a positive spin on the numbers. 'One year into our strategic reset, we're laying the groundwork for a more focused Under Armour. By elevating products and storytelling, tightening distribution, and refining our operating model, we are in the process of reigniting brand relevance and positioning the business for sustainable, profitable growth,' he said. 'Our fourth-quarter performance contributed to fiscal 2025 results that were better than the expectations we set a year ago and we are demonstrating traction in our efforts to reposition the brand.' In a conference call Tuesday morning, Plank acknowledged that 'there is still much work to be done to address our current trajectory and drive brand affection.' With a macro environment that is 'unclear' in the near term, he said the goal at Under Armour is to 'build the muscle strength of agility.' Looking back at his first year since returning to the helm of the company, Plank said he was 'proud of the progress we've made sharpening our strategy, streamlining operations and establishing a stronger financial foundation. We're focusing on high-return categories, markets and initiatives. By simplifying the portfolio, and exiting lower-value activities, we're sharpening execution, boosting efficiency, and directing capital to its highest impact uses. Fewer things done better will fuel stronger, more consistent value creation.' Specifically, he said the company's Unstoppable collection and its Heat Gear base layers 'outperformed expectations…and sportswear is gaining meaningful traction.' And this fall, he revealed, a premium apparel collection will debut that will unite 'performance, sport and style.' This UA Halo collection will launch with three footwear models: a trainer, runner and racer, as well as a range of 'elevated apparel that signals a new era for the brand above design and innovation,' Plank said. The core base layer category is being updated with the addition of Neolast fibers to enhance stretch while being fully sustainable, and the company's Curry brand will continue to add styles including a new Curry 12 sneaker and another colorway in the De'Aaron Fox 1. 'As we near the completion of our initial 25 percent sku reduction over the past year, we're maintaining disciplined inventory management to create space for a stronger, more focused product architecture,' Plank said. 'Together, these steps will drive brand momentum, enhance profitability and unlock new growth opportunities. Our ambition, put simply, is to sell so much more of so much less at a much higher full price.' Plank pointed to the recently introduced No Weigh backpack, a newly designed product with special suspension straps and a $140 price point. He said the backpack is 'meant to serve as a broader metaphor for what we expect to do with our shirts and shoes going forward, with four to six products each season for spring and fall.' He said that as the company looks ahead to fiscal 2026, 'sustaining momentum across product, service and team is critical for advancing our brand transformation. Our ambition goes beyond a comeback, it's a reinvention.' Under Armour's chief financial officer Dave Bergman touched on the tariff issues during his remarks. He said the company is 'proactively evaluating a range of mitigation strategies' including 'potential cost-sharing initiatives with key partners, diversifying our sourcing footprint to minimize exposure to affected regions where feasible, and examining targeted price adjustments to protect margins.' Currently, he said, 30 percent of Under Armour's volume is sourced from Vietnam, 20 percent from Jordan and 15 percent from Indonesia with the remaining third in other countries. Drake McFarland of M Science, a research and analysts firm, said that while tariffs may increase product costs and negatively impact consumer demand, 'Under Armour's strategy towards a more-premium assortment and new product launches, much of which is targeted toward fall '25, is well timed. While the average consumer may be under pressure, orienting towards a more premium and less promotional product assortment may position Under Armour towards a comparatively more resilient consumer base during these uncertain times.' For the year, the company reported an operating loss of $185 million but adjusted operating income of $198 million. The net loss was $201 million and the adjusted net income was $135 million. Sales for the full fiscal year decreased 9 percent to $5.2 billion with North American sales dropping 11 percent to $3.1 billion and international revenue down 6 percent to $2.1 billion with flat sales in the EMEA, a 13 percent drop in Asia-Pacific and a 6 percent decline in Latin America. In the year, wholesale revenue fell 8 percent to $3 billion and direct-to-consumer sales fell 11 percent to $2.1 billion with owned and operated store revenue falling 2 percent and e-commerce sales, which accounted for 35 percent of the total DTC business for the year, down 23 percent. By category, apparel revenue fell 9 percent to $3.5 billion, footwear was down 13 percent to $1.2 billion and accessories down 1 percent to $411 million. As a result of what Plank characterized as 'a complex macroeconomic backdrop,' the company only provided guidance for the first quarter of fiscal 2026. Revenue is expected to decline between 4 percent and 5 percent, which anticipates a drop of 4-5 percent in North America, a mid-teen percent decline in Asia-Pacific and high-single-digit growth in EMEA. Operating income is expected to be between $5 million and $15 million and adjusted operating income is forecasted at between $20 million and $30 million. Plank remained optimistic about the company's future, saying 'sharpened execution, alignment, and focus — bolstered by the move to a category-led operating model — equip us to navigate ongoing volatility with resilience,' he said. 'I'm confident in the agility we've built over the past year, and we are raising our bar of excellence at Under Armour.' Last May, Under Armour revealed a restructuring plan to improve its financial and operating efficiencies that was expected to cost from $140 million to $160 million. By the end of the fiscal fourth quarter of 2025, the company had recognized $58 million in restructuring charges and $31 million in other expenses. It expects the remaining charges to be realized during fiscal 2026. Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange
Yahoo
13-05-2025
- Business
- Yahoo
Shoe Prices Sank in April, the Sharpest Drop in 21 Months, Despite Uncertainty Around Tariffs
Shoe prices sank in April in tandem with overall inflation, according to the latest data from the Footwear Distributors and Retailers of America (FDRA). In April, retail footwear prices slid 1.3 percent from a year ago, the sharpest drop in 21 months and second steepest in more than four years, the FDRA noted. This comes as prices dropped 2.9 percent year-over-year for children's shoes, the most in more than four years, and a 1.5 percent decline in men's footwear, the most in 21 months. Women's shoe prices declined a modest 0.6 percent but is still lower than seven of the last nine months. More from WWD Parisian Footwear Label Christen Makes Physical Retail Debut at Bergdorf Goodman EXCLUSIVE: Favorite Daughter Launches Kitten-Heel Sandal and Sneaker With Dr. Scholl's for Summer U.S. and China Hit 90-day Pause on Tariffs, Begin Trade Negotiations Gary Raines, chief economist at FDRA, told FN that over the long term, year-over-year percent changes in retail footwear prices tend to move in step with year-over-year percent changes in duties paid on footwear imports. 'Echoing our caution last month, the problem is that duties paid on footwear imports in the latest month surged the most in years, while retail footwear prices declined,' Raines said. 'This divergence suggests someone along the supply chain is eating that cost differential and losing margin. This notion supports anecdotal evidence heard from several across the industry.' This movement in shoe prices comes one day after the United States and China issued a joint statement on their agreement to substantially lower tariff rates. Starting on Wednesday, U.S. tariffs on Chinese imports will be 30 percent, down from 145 percent, while China's duties on American imports will be 10 percent, from 125 percent. The parties plan to continue with talks over the 90 days that hopefully will lead toward a new trade agreement. But while the U.S.-China tariff pause is a step in the right direction for fashion, footwear and retail, there's still more that needs to be done in terms of trade deals to ease the tax burdens. That's the consensus from fashion and retail trade groups, which said on Monday that they continue to push for better trade deals over the long haul that protect American firms and consumers. Last month's drop in retail footwear prices also comes at the same time the Bureau of Labor Statistics reported that overall inflation slowed even further in April. The bureau's latest Consumer Price Index (CPI), a broad measure of goods and services costs across the U.S. economy, saw prices increase 0.2 percent on a seasonally adjusted basis in April, after falling 0.1 percent the prior month. Prices were also up 2.3 percent over the last 12 months, after rising 2.4 percent in March. The bureau noted that the April change was the smallest 12-month increase in the 'all items' index since February 2021. Excluding volatile food and energy costs, the core CPI rose 0.2 percent in April and increased 2.8 percent over the same time last year. Best of WWD Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Crocs Collaborations From Celebrities & Big Brands You Should Know Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
