Monday, October 13, 2014

Shoe use creativity to reduce impact of leather price

São Paulo-male footwear manufacturers are having to use creativity to minimize the effects of the high price of leather. Among the alternatives found, outsourcing of production was not ruled out by most of the sector.
With the increase in exports of leather, shoe industries saw the price of this material increase and have not been able to pass on the cost to the final product. Even the most optimistic, as the paulista Di Pollini, felt the effects of high prices. "The price of leather folded and we do not pass on to the consumer, that our profit margin has decreased," says the Director of marketing and new businesses of the company, Daniel Barros.
To offset losses on the Bank, the company has invested in the expansion of the brand shops with the franchise model. By marketing the shoes only in stores, the company realizes in advance sales cooling and can react more quickly to adverse scenarios.
Unlike other companies in the sector, the shoe works with an above-average stock. "We work with high stock by choice, to ensure you don't miss product if the demand increase fast," he explains.
Strategy
One of the measures adopted by Di Pollini to ensure good results was the outsourcing of part of the production. The company, the stitching, the production stage involving the stitching of the leather, is still done by the same professionals, but no direct link.
A similar strategy is in the plans of the Touroflex, footwear of Guarulhos. According to the Director of the company, Adriano Kayayan, the headcount of the company decreased by about 25% this year and they're outsourcing part of the process. "The session is more than sewing employs and our idea is to transform a cost, which today is fixed, in variable", explains. The plan foresees the outsourcing of at least 70% of the Backstitch.
Although executives argue part of layoffs are being converted into outsourcing, the number of employees in the footwear and leather industries, reduction of 9% between July and August, according to the Brazilian Institute of geography and statistics (IBGE). Compared to August last year, there was a reduction of 13.8%.
According to the President of the Union of shoe industry of France (Sindifranca), José Carlos Brigagão do Couto, the biggest concern is whether the job losses this year will be recovered at the beginning of 2015.
Difficulties
For Brigagão do Couto, the growth of exports of the main raw material of the footwear sector has been one of the biggest problems. "We are not against the export, but harms the people. The Government has given incentives for exports and local demand has not been met, pressuring prices, "explains.
He admits that sometimes the domestic industry does not consume the local leather, but suggests that the Government could relieve the sale of raw materials to stimulate the internal sale.
According to the President of the Union, the guidance that the entity has given entrepreneurs is that they maintain the cautiously and not expand production. "As a result of the economic situation and the absence of reforms, next year requires careful," he says.
Kayayan, of Touroflex, believes that without the Government stimulus measures, the sector will become totally dependent on the surcharge on Chinese shoes as an alternative to survive in the business environment.
Perspective
The Di Pollini, which produces about 250 million pairs of shoes a year, hopes to keep the results in the final stretch of the year, based on the father's day performance, although the volume produced has not increased in relation to 2013.
"Our turnover should also not grow, but we're not going to close with losses because we are adopting measures to ensure a good result," he says.
For Brigagão do Couto, the Couromoda trade fair, which takes place in the first half of January, will be the thermometer of the next year. "Before that it's hard to say how it will be 2015, but if the performance at the fair is not good, the first quarter of 2015 will be at risk", he believes. The Director of Touroflex saw orders fall nearly 30 percent and does not expect improvements. "We end up indebting us to offset the losses in the cash flow. Now, the prospect is not improving, "says Kayayan.
Diário Comercio Indústria & Serviços - 13/10/2014
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