Saunders believes the key to future-proofing UK footwear businesses lies in skills, technology, sustainability and FTAs

Saunders believes the key to future-proofing UK footwear businesses lies in skills, technology, sustainability and FTAs

While demand for British-made and designed shoes is seeing a resurgence internationally, UK footwear firms need to invest in new skills, technology and sustainability, and take advantage of free trade agreements, if they are to 'future-proof' their businesses. 

While footwear production in the UK tumbled 98% between 1965 and 2010, British-made shoes are seeing an uptick in demand from the US, Japan and Europe. 

According to the British Footwear Association (BFA), the UK was making 198m pairs of shoes back in 1965, with 12% of these exported to overseas markets. This fell to 13m pairs in 2000 (30% exported) and again in 2010 to 4.2m pairs (45% exported). 

But encouragingly, production appears to be on an upward trajectory, growing by 25% between 2010 and 2014 to reach 5.7m pairs – worth GBP550m (US$828.8m) – with 50% being exported. 

"It's a long way to go to get back to the 60s, but at least it's going in the right direction," John Saunders, chairman of the British Footwear Association, said during the 'Head to toe' leather fashion, footwear and accessories conference organised last month by the ASBCI (Association of Suppliers to the British Clothing Industry). 

And with the UK footwear sector now worth GBP7.6m, according to Euromonitor's 2014 figures, Saunders noted: "There is a massive opportunity gap for us to do more here if you go back to the GBP550m of product we produce." 

Cross sector skills 

Among the challenges facing UK footwear manufacturers as they seek to grow again are difficulties in securing and developing new distribution models to expand and enter new markets, as well as the need for succession planning. 

The country's footwear industry has a skilled workforce, but they're getting older. And it's not solely a UK issue but a European one that is most acute in manufacturing, Saunders noted. 

Jonathan Church, joint managing director at British footwear maker Cheaney Shoes, supports this view. "We do get younger ones [workers] coming in and we have worked on apprenticeships. But it is an issue that faces every manufacturer." 

One of the ways the industry could attract new talent is to try to "rebuild interest in footwear manufacturing not as a process-driven boring job, but as a craft-based skills opportunity that can secure a valued and long-term career," Saunders said.

In a bid to do exactly that, the BFA and UK industry are reviewing ways to improve opportunities under apprenticeship pathways. They are also working to make sure apprenticeships and university courses fit and align with the needs of the industry. 

New technology 

On top of this, of course, the UK has limited capacity in terms of the types of footwear it can make in the factories it has, as well as the overall number of shoes it can produce.

While China still dominates global footwear production, exporting around 13.5bn pairs each year, according to Danielle Needham, technologist at Matalan, the country also faces challenges. Finding workers is hard, salary demands are increasing, and domestic brands are more prominent than western brands, she explained. 

Adding to this, Saunders said production in China is getting more expensive. Lead times are long and the cost of transport is helping to close the gap on the cost of manufacturing with the UK, he believes. Meanwhile, he noted that new labour markets either lack the skills, heritage or technical ability to make premium quality shoes.

One of the ways to help enable UK firms to compete with cheaper labour markets overseas, and give retailers access to higher quality and safer products made locally, is "to look at how we can build out technical ability and take on new CAD, CAM and 3D printing."

"We need to encourage more investment in the future," Saunders noted, pointing to developments taking place in the UK, including an investment by luxury brand Church's in a new factory in Northampton, and Hotter Shoes putting money into new machinery and its factories in Skelmersdale, West Lancashire. 

Sustainability 

In terms of compliance, another challenge is that "traceability and sustainability in developed markets is getting harder and it's also getting more expensive to control". 

With that in mind, Saunders believes quality and local traceability are "on the agenda" for the government as well as more and more consumers, adding: "The footwear industry needs to embrace it". 

Programmes such as the EU's REACH regulation (for the registration, evaluation, authorisation and restriction of chemicals) govern the sustainable and ecological impact of leather and footwear - and put more demands on suppliers to ensure they can trace chemicals and identify substances within products. 

Highlighting the challenges with overseas third-party production, Saunders noted that the increased cost of multiple audits is "hitting their ability to make shoes at cheaper prices".

And disparate rules in different markets make it difficult for companies to have a single standard. "If you can't control your supply chain, if you don't know where things are made right down to component level, that's going to be a major issue," he warned.

Future-proofing businesses 

Saunders believes some changes to trade barriers will also benefit the footwear business. The Trans-Atlantic Trade and Investment Partnership (TTIP), currently under negotiation between the US and Europe, opens up the prospect of duty-free sales for UK manufactured goods.

The US last month also agreed a similar deal with 12 Pacific nations, including Vietnam, although questions are being asked about when the Trans-Pacific Partnership will pass into law

Nonetheless, Saunders noted: "FTAs can encourage the expansion of footwear making in the UK through the removal of duty and tariff barriers on 100% home produced products, which will hopefully stimulate more home trade manufacturing and more home-made placement of orders."

Finally, he added: "We are facing some challenges and change always brings challenges, but it also offers opportunities to give competitive advantage. And I hope it will stimulate not only the retail side of the business, but on the manufacturing side to think more about sourcing products closer to home.

"If you can encompass all of those things, you can future-proof your business."