VOMERO 18 Running Shoe in the NIKE store in New York has a thick sole, $ 150 price tag and tongue label with a “Made in Vietnam” message.
The last fact is a big problem for Nike’s turnaround plan for Elliott Hill’s chief executive this year. Vietnam has become a global center of the manufacture of global motion shoes, and this week, Vietnam has become the most punished US tariff imposed by US President Donald Trump.
Trump said he wanted to bring the manufacturing to the US coast. Analysts say the US is likely to increase the price of the trainer because of the lack of factories with special equipment to create running shoes and workers to manipulate workers.
Headquartered in the United States, NIKE began manufacturing in 1995 through five contracts in Vietnam and became one of the first foreign investors in the United States, contributing to export and economic growth. In the following year, the company quickly expanded its supplier base and fascinated by inexpensive labor force, creating thousands of jobs.
NIKE currently owns 130 suppliers that produce shoes, clothing and equipment in Vietnam, which account for half of the shoe production.
German rival ADIDAS gains 39 %of shoes in Southeast Asian countries.
According to the American Apparel & Footwear Association, Trump’s new 46 % tariff will be a 20 % mission that has already been paid for US sports shoes.
Chris Rogers, head of the supply chain researcher at S & P Global Market Intelligence, said manufacturers can open a trainer factory in a new country, but generally take about two years to relocate the shoe supply chain. The company usually plans this change every five years.
Adam Cochrane, Doi Chichi Bank analyst, suggested that Mexico, Brazil, Turkey and Egypt could be an alternative to Vietnam with manufacturing hubs. However, it takes 18 to 24 months to decide to make real changes on the ground due to the order contract period with the supplier.
Trump also imposed so -called mutual tariffs at least 10 %for almost all trading partners. For major shoe hubs such as China and Indonesia, the new fee is more than three times.
David Marcotte, the retail vice president of Consultancy Kantar, said, “It will be difficult to find a cheaper market without leaving the earth.
Nike did not respond to the request. The company said in a quarterly report submitted on Thursday: “We are exploring some external factors that create uncertainty and volatility in the operating environment, including designated scientific epidemiology, new tariffs, tax regulations and foreign exchange rate fluctuations.”
Last year, the company appointed Hill as CEO after falling into a slump due to sneakers of small -scale competitive brands such as ON and HOKA.
Investors feared Trump’s new tariffs and plunged to nearly eight years this week.
Dylan Carden, an analyst at William Blair, said in the case of shoe brands, “I had three main paths in terms of cost relief.” “You can push it again to get a supplier [to] Raise less. You can increase the price and claim more for consumers. Or you can eat. ”
Cocclain says that the German brands, Adidas, ADIDAS, ADIDAS, ADIDAS, ADIDAS, and PUMA, which have a wide range of manufacturing operations in Vietnam, have to raise the US price by about 20 % to maintain the US price increase to maintain a gross profit margin in accordance with the rate. Estimated. He said he could sell less in the United States to be better than Nike.
Felix Dennl, an analyst at Metzler Bank, said Adidas was “well placed” on the price increase due to “a wide range of brand momentum of lifestyle and performance segments.”
On the other hand, Puma will know that as a premium shoemaker, the effort to change the brand has not gained momentum so far.
Dennl said, “We will investigate the product range closely in the US.”
Adidas refused to comment. PUMA said, “Many long -term partners based on multinational origin strategies and suppliers can be produced in many countries.
Vietnam has been waved by a new manufacturing investment that allows companies that have begun to trade with Beijing during the first term of Trump, allowing them to transfer production in China. Vietnam’s shoe manufacturers are not only local companies but also Korea and Taiwan groups.
Due to the migration to Vietnam, trade surpluses with the United States led to a balloon to the third largest $ 125 billion since China and Mexico. The White House used trade balance numbers to calculate the “mutual” tariffs in each country.
Deutsche Bank Analyst COCHRANE said the trainer brand said, “We need to reduce order volume and relocate more products to Europe, the Middle East and China.”
In the United States, where 99 %of the shoes are imported, Carden said the market would be similar to the Soviet Union when Russians paid a handsome premium to Levi’s Jeans to foreign visitors.
“We are behind the iron curtain,” he said.
Data analysis of Clara Murray
