As the U.S. economy continues to struggle and retailers brace for even tougher times ahead, show organizers said currency exchange rates and the high cost of travel would likely keep many buyers stateside. In fact, in a recent FN survey, 78 percent of footwear players said they would not attend the European trade shows this season.
The result is that trade events are being redesigned to appeal more to domestic buyers where the shows take place and to clearly differentiate product by price point.
“The weakness of the U.S. dollar against the euro has a negative impact on nearly all fashion trade fairs in Europe,” said Kirstin Deutelmoser, director of GDS and Global Shoes in Germany. “A considerably lower number of American visitors can afford or want to attend such trade fairs as GDS at this time. The expenses incurred in the fair participation, the accommodations, food and beverages would be too high. At the same time, it does not pay for American buyers to include European labels in their offerings, as these goods have become more and more expensive during the last months due to the present rate of exchange.”
Deutelmoser acknowledged that credit woes in the European market have some buyers watching price points more carefully. As a result, she said the upcoming shows would offer European attendees a more clearly defined product offering that draws a demarcation between less-expensive imported footwear from Asia and higher-priced brands.
“It is clear we are talking to two very different audiences with two different trade shows,” she said. That was one reason Global Shoes will now start a day early, Sept. 11-13, and GDS, incorporating GLS, will overlap, from Sept. 12-14.
Patricia Lerat, Première Classe organizer agreed that the price gap between low- and high-end product has widened considerably. “The differential between the low market and the medium-high market is bigger than before,” she said. “The cost of the fabric in Europe [has remained] quite high. That’s why the labels that find a solution in China can do business at this moment.”
Similar to GDS, the two upcoming Première Classe events will target different buyer price points. The first edition, which will take place Sept. 4-7 at Porte de Versailles, will emphasize designs at mid-tier prices. Debuting at this show will be a group of 10 leading Brazilian shoe brands, including Sylvia Quartara, Zeferino and Sarah Chofakian.
A month later, Première Collection at Jardin de Tuileries, from Oct. 3-6, will cater to higher-end buyers. “For October, the designs are special styles at a high level,” said Lerat, who added that out of 310 collections, shoe labels debuting would include Andrew Gn, David Wyatt and Riccardo Freccia Bestetti.
Still, Lerat said she worried about the future. “For the moment, the Première Classe exhibition is still the place to be because of the selection, but I am worried for the two next seasons because it seems a real disaster,” she said. “The Italian and French markets are very bad. There is a big crisis in Japan. The Japanese are buying less. [With the] U.S. dollar, Americans buy less, too.”
Asian show organizers, however, were less pessimistic about their ability to attract international attendees.
Stanley Chu, chairman of Adsale Exhibition Services, which organizes China Shoes and ShoeTec, was unfazed by the prospect of slower business coming from the U.S. “The economic downturn is normal. You can’t have business always going up,” he said, noting that the average American consumer purchases nearly eight pairs of shoes each year, while the average Chinese consumer buys statistically just 1.7 pairs each year. “Even if Americans buy only seven pairs, who cares? It’s still so much. And there is so much room for growth in China,” he said.
Perrine Ardoin, senior event manager of APLF’s Fashion Access, said there are also plenty of opportunities to attract attendees from other parts of the world. She noted that South American companies are beginning to see the possibilities in China. “They see China as a huge market, but they are also coming to establish joint ventures for production, which makes sense because they are so far away,” said Ardoin.
While China’s consumer market has plenty of potential, its footwear manufacturers are coping with a number of significant issues: the appreciation of the yuan, power shortages, labor shortages, new labor laws, increased cost of raw materials, European antidumping regulations and pressure from China’s Central Government to move production facilities out of the Pearl River Delta to interior provinces. “It’s true that many small factories are closing,” said Chu, “but the government doesn’t want factories anymore. [They are] pushing the manufacturers to upgrade, to establish brand names and add value. They want more than workers’ salaries.”
Chu noted that China’s largest manufacturers are hedging their bets by establishing factories for low-end footwear in such countries as Vietnam and India, while upgrading at home. Still, he added that not all companies have the bankroll to support such endeavors. “Only large companies can afford to do this,” Chu said.
Show organizers are monitoring the situation carefully and arranging a number of round-table discussions and seminars to address the footwear industry’s major issues. Ardoin noted that APLF held a workshop two weeks ago in Guangdong to discuss speed to market, European trade issues, cost cutting and other topics. Likewise, China Shoes is preparing the second World Footwear Forum, an open-format seminar during which leaders from manufacturing, retail, government and other industry-related sectors can freely discuss problems and solutions.
Regardless of current economic conditions, Chu said plenty of opportunities exist for both Chinese factories and U.S. brands. “In difficult times we tell exhibitors that even if the U.S. is going dim, China is the bright spot,” he said. “And remember, the U.S. is still more than 55 percent of the world’s export market, and there is still opportunity for growth.”