Footwear sourcing will head into uncharted territories in the coming years.
Those were the sentiments discussed by New Balance senior manager of global business operations Gabriella Wortmann at the WWD Global Sourcing Summit in New York on Tuesday.
During her presentation, the executive predicted that companies would explore new ways to manufacture footwear as production costs in China continue to rise.
One strategy Wortmann foresees is automation, the use of more machines and equipment and fewer human resources. “As time goes on and technology advances, it’s something more companies will look into because it would lead to increased profit margins,” she said.
With New Balance producing approximately 5.5 million shoes in the U.S. annually, Wortmann added that domestic production could be an opportunity. However, while U.S. manufacturing would allow for quicker delivery to the market, high labor costs related to medical care for workers still presents a challenge.
Wortmann noted that her company is looking into emerging territories that have lower sourcing costs for making footwear. These include El Salvador, Puerto Rico and India. In addition, European territories such as Bosnia and Bulgaria also made the list.
“Those [areas] have historically manufactured footwear, so there’s already an infrastructure there,” she said. “If [New Balance] does move into Europe, it would be to better serve markets in that area.”