São Paulo – The Brazilian footwear industry expects better sales in both the domestic and foreign markets in the fourth quarter. In an interview with ANBA, Brazilian Footwear Industries Association (Abicalçados) executive president Haroldo Ferreira (pictured above) said that they expect sales to start recovering in Q4, and industries are receiving export orders.
The industry was severely hit by the COVID-19 pandemic and suffered particularly from the closing of stores, the main sales channel for footwear in Brazil and elsewhere. As the stores reopen across the countries, the prospects are better. But the scenario is far from ideal. Sales are expected to reach pre-pandemic levels only in the first or even second half of 2021.
Ferreira points out that the industry is extremely weakened. “We are just getting above water and start taxiing before taking off,” he said. The Brazilian footwear industry shrank by 30% in its production capacity and lost 60,000 jobs in the pandemic. In July, already in this reduced situation, factories operated at 50% capacity.
Despite the open stores, the consumers are not moving around nor buying at pre-COVID-19 levels neither in Brazil nor abroad. The commerce in malls is not happening, Ferreira said. “We must work hard to get back to previous levels,” Abicalçados executive president said.
The industry has felt the pandemic effects since mid-March when the stores were closing in Brazil and other countries and the cancellation of orders started arriving at footwear factories. In Brazil, the state of São Paulo, which consumes 40% of the industry’s production, has recently eased restrictions and allowed stores to open.
The footwear factories and shops adapted to the ecommerce, which eased the losses but was far from absorbing the entire production. Ferreira said that brands that still had a more prepared ecommerce operation manage to sell around 15-20% of their productions online. Some stores sold by WhatsApp, and in a bid to survive, the factories themselves pursued the consumer on the digital channels, using the B2C model. “The ecommerce sales narrowly helped the retail and industry to survive,” he said.
Without on-site trade shows where a good part of Brazil’s footwear production is sold, Abicalçados created a connection platform between Brazilian retailers and manufacturers, Calçados do Brasil. In a partnership with the Brazilian Trade and Investment Promotion Agency (Apex-Brasil), Abicalçados already had in Brazilian Footwear a platform for connecting Brazilian footwear manufacturers and importers. It is still active.
One of the world’s largest footwear trade shows, Micam Milano in Italy will be part physical, part virtual in September. As travelers from Brazil are currently banned from Italy, only brands that already have representatives in the region will participate onsite. The others will participate online, Ferreira said. Several other virtual trade shows are scheduled, and the Brazilians will participate using the online platforms.
The return of the trade shows, even if online, carries the possibility of improving exports. Year-to-date through July, footwear exports from Brazil were down by 33% from a year ago. The revenue dropped from USD 567 million to USD 379 million. The sales to the Arab market also declined, by 24.3%, from USD 29 million to USD 22 million.
The Arab top buyers of footwear from Brazil, the United Arab Emirates and Saudi Arabia, bought 60% and 30% less, respectively, year-to-date through July. Imports also declined in Kuwait, Lebanon, Algeria, Morocco, Egypt, Oman, Qatar and Iraq. On the other hand, Libya, Bahrain, Jordan and Sudan purchased more footwear from Brazil, according to figures from Abicalçados.
Translated by Guilherme Miranda
