Sneaker Stores Can’t Get Product Fast Enough As Supply-Chain Issues Persist
Sneaker Stores Left High and Dry
High-end sneaker shops around the US are among the many different businesses feeling flatfooted amid ongoing supply-chain issues. Independent retailers are struggling to keep up with in-demand deliveries thanks to both production and shipping delays. Products sometimes arrive several months late, complicating things for stores facing already tight margins.
One such company is Sneakersnstuff AB, which operates several locations in both the US and Europe. Company executives note staff need to be paid and rent is still due even when there’s no sneakers to sell. A major piece of the equation is shoe-making giant Nike (NKE) and some of the problems it’s been dealing with.
Nike and Sneaker Boutiques Tied at the Shoelace
Following in the footsteps of other companies, Nike started focusing on direct-to-consumer, or DTC, channels to sell its products. This includes the shoe giant’s own website and apps, rather than places like Dick’s Sporting Goods (DKS) and Nordstrom (JWN). With that said, wholesale accounts still make up about 40% of its $44.5 billion in annual sales.
Some of these direct retailers include boutique shops, known for being fashion-forward. Nike works with these small-scale operations to introduce Jordans or Dunks which customers form lines to purchase. Through social media and blog drops, collectors follow these special releases for months. But the timing of these special dates has been thrown off by glitches in the supply chain. For some boutique stores, pandemic-related delays have caused sneaker sales to fall over 10% short of projections.
Nike Hopes Delays Unwind Soon
Many sneaker boutique owners credit Nike for being open about the issue and say the company is doing its best to improve the situation. Nike has expressed optimism that supply-chain issues can normalize by the midway point of this year. Still, the company admits production has been greatly diminished amid a factory closure in Vietnam tied to COVID-19, and slower shipping in general.
Zooming out, Nike is far from the only footwear producer dealing with these problems. Under Armour (UAA) executives held a call with analysts last week and discussed supply-chain constraints, blaming slower transit and increased costs of freight. The company also announced the cancellation of some deliveries in order to cover direct-to-business orders, and make sure top wholesalers have enough product on hand. The supply chain continues to bog down the entire economy, and consumers don’t have to look much further than their shoes for a reminder.
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