As the trade war between the United States and China reached a fever pitch, many fashion and footwear players including Steven Madden Ltd. had made arrangements to move away from China and diversify their sourcing.
The arrival of the coronavirus pandemic, however, had thrown a wrench in the New York-based retailer plans to exit the East Asian country, where nearly 90% of its goods had originated just a couple years ago. The majority of its products for the fall season hailed from China because, according to chairman and CEO Edward Rosenfeld, it was “the most reliable place to be.”
Now, the New York-based retailer is prepared to put those plans back into motion: In its third-quarter conference call with analysts, Steve Madden’s chief said the firm it intends to begin moving out of China once again come spring ’21. The company shared that the percentage range of materials sourced from China are currently in the “low 60s.”
“We were working diligently to shift production out of China back in spring,” Rosenfeld explained. “For fall, we really suspended that process of continuing to move out of China because … that was the place where we were the most confident that we’d be able to get the goods for fall given what’s going on in a lot of the other countries that we were sourcing from.”
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For the upcoming spring season, Steve Madden told analysts to expect that it would procure goods from countries including Mexico, Cambodia, Brazil and Vietnam. The brand currently has production operations in León, Mexico; Brazil; and Vietnam — all of which have emerged as popular alternatives for sourcing as the trade picture between the world’s two largest economies remains unclear.
Designer Steve Madden himself has long been critical of President Donald Trump’s tariffs against China. Last year, he took the podium at the 2019 ACE Awards, where he memorably said, “Tariffs hurt everybody — they hurt employees, manufacturers, retailers. Most of all, they hurt consumers. I’ve yet to meet anyone beyond the man in the White House who thinks this is a good idea. Why we are letting protectionism, tribalism and nationalism hurt a thriving global marketplace?”
For the third quarter, also announced today, Steve Madden Ltd. logged adjusted earnings of 39 cents per share, versus last year’s 67 cents per share, as well as a 30.9% decline in revenues to $346.9 million. Still, it managed to beat Wall Street’s forecasts of EPS of 21 cents and sales of $329.3 million