Latest news with #MattPriest
Yahoo
22-05-2025
- Business
- Yahoo
No Clear Path on Reciprocal Tariffs Leaves Footwear Firms in The Dark
Footwear firms continue to navigate the great unknown. Shoe manufacturers and others are still grappling with uncertainties over rising costs even though they're all hoping that potential trade deals can be negotiated during the 90-day pause on reciprocal tariffs, which ends July 9th. The exception is the 145 percent tariffs on Chinese imports, though there are signs that might not stick. More from WWD Amer Sports Raises 2025 Guidance, Tariffs Not Major Concern Not A Lot Of Love For 520: Brands Rethink Local Campaigns Amid China Uncertainty Melania Trump Sports Prada Suit for Take It Down Act Signing Three weeks after U.S. President Donald J. Trump announced reciprocal tariffs on April 2, the only thing that's certain is that duties are going up. While there's at least a 10 percent baseline increase, just exactly how high the new levies can go seems to be a moving target. A few days after April 2, Trump issued a 90-day pause, with the exception of Chinese imports, which saw an even higher increase in tariffs on top of the levies imposed in February and March. Analysts at TD Cowen's Washington Group see potential for new trade deals with Japan, South Korea and India — which could be among the first to strike deals with the U.S. prior to July 9. In an interview with Footwear Distributors of America (FRDA) CEO Matt Priest on April 3, he said the government of Vietnam is also in proactive talks with the Trump administration. Priest sees those talks as a positive as Vietnam has a high proportion of performance athletic footwear production. U.S. equity markets rose on Wednesday following remarks by Trump on Tuesday that tariffs on Chinese goods would go down. Trump made the comments at the White House swearing in of new Securities and Exchange Commission chair Paul Atkins. 'We're doing fine with China. We're doing fine with, I think, almost every country. Everybody wants to have involvement with the United States,' Trump said. Trump also said that ultimately, China has to make a deal 'because otherwise they're not going to be able to deal in the United States. So we want them involved but they have to — and other countries have to — make a deal and if they don't make a deal, we'll set the deal.' He added, 'We've spoken to many, many countries, and we're getting their views on things.' Among footwear firms posting a sea of green in Nasdaq trading Wednesday were On Holding AG, which closed up 4 percent to $44.34; Amer Sports Inc., up 4.3 percent to $23.21; Boot Barn Holdings Inc., which saw shares rise 5.6 percent to $98.55; Genesco Inc., up 3.3 percent to $19.98; Crocs Inc., up 3.1 percent to $96.49; Allbirds Inc., also up 3.1 percent to $5.07; Skechers U.S.A. Inc., up 2.3 percent to $49.14, and Wolverine World Wide Inc., up 1.5 percent to $12.41. Among the retailers, Dick's Sporting Goods Inc. rose 2.5 percent to close at $185.40, while Academy Sports and Outdoors Inc. was up 2.4 percent to $37.74 and Foot Locker Inc. rose 1.8 percent to $11.77. Nike shares declined most of the morning, but closed the trading session up 0.3 percent to $57.23. In contrast, Steve Madden Ltd. was up during the day, but closed down 0.07 percent to $20.50. Two other brands also saw red: Under Armour Inc., down 0.7 percent to $5.48 and Caleres Inc., down 0.5 percent to $15.24. Caleres said in February that it was acquiring Stuart Weitzman from Tapestry Inc. for $105 million. On the retail front, Shoe Carnival Inc. saw its shares decline 1.4 percent to $17.57. The problem for all companies is that no one is sure how much talking is going on in the background with China, as U.S. Treasury Secretary Scott Bessent is alleged to have told attendees at a closed-door investor summit for JP Morgan in Washington on Tuesday that while he's optimistic that a deal can be reached, those negotiations haven't yet begun, according to a Bloomberg report. Bessent also reportedly said that a rebalanced trade relationship between the two countries could result in a larger trade agreement in the next two to three years, much longer than footwear retailers and brands had hoped. And adding to the complexities for shoe firms and retailers is the possibility that come July 9, Trump could elect to further delay reciprocal tariff implementation for other countries. For now, S&P Global Market Intelligence (Market Intelligence) said U.S. exporters have seen a rise in Chinese buyers canceling orders. 'Exporters also expect they will need to redirect their cargo to other Asian countries to make up for the diminished Chinese market,' S&P said. Despite an expected slowdown in consumer spending, separate from the so-called doom spending in March as they sought to get ahead of tariffs and related price increases, a Market Intelligence report from last week indicated that footwear is not among the most vulnerable within the U.S. retail sectors. That distinction goes to consumer electronics at 7.2 percent in March, up from 6.5 percent in the prior month. In comparison, footwear in March was at 2 percent, up from 1.4 percent in February. Apparel retail was higher at 4.2 percent, up from 3.3 percent on the same period. Goldman Sachs equity analyst Brooke Roach on Monday reduced estimates for companies in her coverage area after lowering the outlook for the U.S. apparel and softlines sector due to tariff backdrop. She said Goldman economists see a 45 percent probability of a recession, while geopolitical uncertainty and higher tariff rates pose a downside risk to companies' earnings per share. Other risk factors could include 'reciprocal' tariff rates beyond the 90-day pause, headwinds from foreign boycotts of American brands, muted tourist-driven demand and inventory imbalances, as well as pricing uncertainty. And last week credit analysts from Moody's Investors Service changed their outlook to negative from stable for the global retail and apparel sector. They expect U.S. apparel and footwear firms, big-box retailers and department stores will be the ones most likely to feel the pain, given that higher prices will impact strapped middle- and lower-income consumers. 'Restructuring supply chains pose major challenges with more complex products, including footwear, even more difficult to modify without compromising quality,' the credit analysts noted in a report. 'Consumer demand was already tepid, with many discretionary categories struggling.' The Moody's analysts also noted that performance sneakers require specialized labor and manufacturing that's not readily available outside of key Asian countries. Under Armour, Nike and Wolverine, for example, are all heavily concentrated in footwear and technical apparel that are sourced primarily from China, Vietnam and Southeast Asia, with few options for shifting production to countries facing lower U.S. tariffs. And while Crocs has high exposure to Vietnam, the credit analysts said it could see less of an impact due to its 'high profit margins, brand momentum and greater ability to shift production.' Among the retailers, the Moody's analysts cited Foot Locker as a company with low operating margins and a more vulnerable lower-income consumer base. In the big-box category, Dick's Sporting Goods imports much of their apparel and footwear from China and other parts of Asia, but the analysts said it can ease the tariff impact by shifting to its private-label brand portfolio and absorb some of the cost increases. Small retailers such as Academy Sports might be less able to absorb costs since it doesn't have the scale to garner the same purchasing power or supplier diversification and flexibility, the credit analysts concluded. 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
Yahoo
14-05-2025
- Business
- Yahoo
Consumers plan to curb footwear spending due to price hikes
This story was originally published on Fashion Dive. To receive daily news and insights, subscribe to our free daily Fashion Dive newsletter. Consumers worried over inflation and tariff-related price hikes may be stepping back from shoe purchases over the next six months, according to the Spring 2025 AlixPartners U.S. Footwear Consumer Survey. The survey of 1,006 U.S. footwear consumers found that work and dress shoes could see spending decline 29% and 26%, respectively, this spring and summer. Athleisure shoe spending is expected to drop 17%, and casual shoe spending is projected to decline 16%, per the report. With price being top of mind, some 78% of surveyed consumers said they have already walked away from a shoe purchase this year. That's 12 percentage points higher than in 2024. In addition, 59% of respondents said they wouldn't make a footwear purchase if the item was not on sale. The study, conducted online between Feb. 28 and March 10 with U.S. footwear consumers ages 15 and older, found that shoppers who view buying new shoes a luxury and not a necessity planned to ease up on their purchases of most footwear. This includes athletic styles, which are typically a growth category for the sector. 'Athletics are usually the most resilient segment, but even those purchases have slowed,' Andrew Hogenson, managing director at Alix Partners said in a statement. He added that analysts projected a 9-point decline, although 'price increases from aggressive trade policies could see [consumers] put the brakes on even harder.' In a press release accompanying the survey, AlixPartners said that imports accounted for around 99% of shoe sales, and carried an average tariff of around 12% before the latest round of levies. Tariffs could also force companies to raise prices and pass those increases on to consumers, per the survey. Matt Priest, CEO and president of FDRA said in the press release that the survey results confirm what the industry already knows, which is that consumer confidence is slipping and price sensitivity is peaking. 'With nearly 80% of consumers bracing for higher costs due to tariffs and nearly 8 in 10 walking away from a shoe purchase because of the price tag, footwear is shifting from a necessity to a discretionary expense for many families,' Priest said. Global trade policies are forcing many footwear and athleticwear brands to alter their sourcing strategies or ask for relief from government-led tariffs. Nike, Skechers, and Under Armour were among 80 footwear brands that recently signed a letter this month from the Footwear Distributors and Retailers of America to U.S. President Donald Trump urging his administration to offer exemptions for the industry, which already has high import fees. With the new tariffs, some brands could see duties ranging from 150% to nearly 220%, according to the letter. Recommended Reading Skechers to go private in $9.4B deal 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
14-04-2025
- Business
- Yahoo
US Footwear Group Sees Risk of Product Shortages
Matt Priest, president & CEO of the Footwear Distributors and Retailers of America, says companies in the sector are seeing a lot of orders getting cancelled, particularly for products sourced from China, as the tariff war escalates. He discusses how the trade war is affecting the footwear industry and consumers on Bloomberg: The China Show. He speaks with David Ingles and Annabelle Droulers.
Bloomberg
14-04-2025
- Business
- Bloomberg
US Footwear Group Sees Risk of Product Shortages
Matt Priest, president & CEO of the Footwear Distributors and Retailers of America, says companies in the sector are seeing a lot of orders getting cancelled, particularly for products sourced from China, as the tariff war escalates. He discusses how the trade war is affecting the footwear industry and consumers on Bloomberg: The China Show. He speaks with David Ingles and Annabelle Droulers. (Source: Bloomberg)
New York Times
02-04-2025
- Business
- New York Times
Americans' Reaction to Trump's Tariffs Vary From Worried to Enthused
President Trump's announcement of sweeping universal and so-called reciprocal tariffs on countries around the world drew a swift rebuke on Wednesday from business groups, trade experts, Democratic lawmakers and many economists who warned that they would raise prices for American consumers and slow economic growth. 'This is catastrophic for American families,' said Matt Priest, president and chief executive of the Footwear Distributors and Retailers of America. 'We had hoped the president would take a more targeted approach, but these broad tariffs will only drive-up costs, reduce product quality and weaken consumer confidence.' Other reactions were more muted, and some positive, saying the move was long overdue. 'Today is arguably the single greatest trade and economic policy action in the history of the country, and it absolutely cements President Trump's legacy that he is trying to usher in a new golden age of economy production and prosperity,' said Nick Iacovella, executive vice president at the Coalition for a Prosperous America, a group that supports tariffs. He said the tariffs would contribute to 'broadly re-industrializing the United States and creating working class jobs.' Mr. Trump insisted on Wednesday that experts had been wrong all along about his tariffs and that the anxiety about them now were misplaced. But those who will be forced to pay the tariffs were quick to raise concerns about the move, which will increase import taxes on products from some of America's biggest trading partners including China, the European Union, Japan and India. The National Retail Federation said in a statement that the tariffs would 'equal more anxiety and uncertainty for American businesses and consumers.' Tariffs are not paid for by foreign countries or suppliers but by U.S. importers, they said. They also added that 'the immediate implementation of these tariffs is a massive undertaking and requires both advance notice and substantial preparation by the millions of U.S. businesses that will be directly impacted.' The National Association of Manufacturers said it was still parsing the details and exact implications of the president's tariffs. But the group's president, Jay Timmons, said in a statement that the high costs of new tariffs threatened investment, jobs, supply chains and, in turn, America's ability to outcompete other nations and lead as the pre-eminent manufacturing superpower.' Want all of The Times? Subscribe.
