Together, the 34 producers of outdoor shoes operating in the Montebelluna area delivered a total of just over 4.6 million pairs of hiking and trekking shoes worth €182.7 million in 2008, indicating a wholesale price per pair of €28. The values are very similar to those counted for 2005, which amounted to 4.77 million pairs worth €181.3 million.
This is one of the findings of the Osem survey conducted by the local Boot Museum for the year 2008. Sponsored by Veneto Banca Holding, the survey had been coming out every year, but it failed to do so for 2006 and 2007 because of a lack of funds. There is talk now of conducting this survey every other year.
Still, the latest data show that the total number of companies related to Montebelluna’s so-called “Sportsystem” fell by only 4.65 percent to 390 in 2008, while the number of their employees grew by 0.61 percent to 7,629. The growth in employment was essentially due to the progress of Geox, which boosted its own staff by 130 people in the course of the year.
Things will be different in 2009. One-fourth of the companies related to the Sportsystem surveyed predicted staff cuts for this year. Among those, Diadora, Rossignol and Tecnica have together announced the elimination of 385 jobs in the region.
In fact, only 17.59 percent of the firms expected a sales increase in 2009, while 55.28 percent felt that its revenues would decline. Specifically in the outdoor sector, 55.2 percent of the companies were unsure about future sales trends. Only 3.4 percent predicted an increase in sales, while 13.8 percent were more pessimistic and expected a drop.
Factoring in any production outsourced abroad, the companies of the Montebelluna sportsystem reached sales of €2,127 million in 2008, but the real sports segment has shrunk considerably over the years. Only 9.48 percent of this turnover was generated by winter sports products, compared with 63.96 percent back in 1987, and another 9 percent by hiking, trekking and climbing shoes. Technical shoes for football, cycling, motorcycling, tennis, running, safety and inline skates made up 15 percent of the turnover and 20.87 percent of the shoe production. Clothing represented 20 percent of sales.
The companies in the region produced a total of 45,287,000 pairs in 2008, the vast majority in Romania, China and other low-cost countries. Out of this volume, 61 percent were street shoes, about 10 percent snow shoes and 10 percent outdoor shoes.
While 22 percent of the companies operating in the cluster still produce ski or after-ski boots, snowboard boots or ice skates, street shoes have come to represent 45.21 percent of the turnover of the Montebelluna sportsystem, although the number of firms that produce these items has declined to 12.29 percent.
The main factor has been Geox, which accounted in 2008 for 42 percent of the total turnover of the region and 85 percent of the sales of street shoes.
nterestingly, however, the family that controls Geox is now taking over Diadora at a time when its huge sales increases of the past few years have come to a halt, partly no doubt because of the general economic situation (more on this company in Shoe Intelligence).
According to the authors of the Osem survey, positive signals are emanating from the outdoor shoe sector, where the market is expanding. The problems of the snow boot segment are instead attributed to the structural crisis of the world snow sports market, due to reduced participation levels and consumers’ increasing reliance on equipment rentals.
Not surprisingly, the number of remaining firms that outsource part or all of their production continues to increase. The ratio grew to 25.74 percent from 18.81 percent at the time of the previous 2006 Osem survey. Romania remained the favorite source, used by 61.9 percent of the outsourcing companies, but the role of the Ukraine rose strongly and is now used by 11.9 percent of them.
Labor costs are about 40 percent lower there than in Romania, and there are fewer problems in such areas as to the local availability of workers. Still, more companies in the Montebelluna region outsource to Bulgaria (14.3 percent) and China (33.3 percent).
While complaining about growing credit restrictions, especially among the companies whose turnover is €5 million to €25 million, or is higher than €50 million, local entrepreneurs are becoming more aware of the fact that they have to change their business model to take advantage of the economic recovery, which should take place sooner or later.
A separate survey conducted by a local foundation last May and June showed that 91.2 percent of the managers in the Veneto and Friuli regions feel that mergers and other forms of aggregations will be necessary to remain competitive.
Innovation is key for 89.2 percent of them, marketing and communication for 88.4 percent, new data processing systems for 86.6 percent, new generations of managers for 85 percent and more external equity injected into the family-owned companies for 80.5 percent of the interviewees. Managers between the ages of 50 and 59 are currently at the head of 35 percent of the companies in the Montebelluna district, and 15 percent are run by even older people.
Aldo Durante, the 65-year-old founder and general manager of the Boot Museum, is retiring at the end of this year as president of the Montebelluna cluster. He will be replaced in this role by Adriano Sartor, general manager of Stonefly, but he will continue to take care of the Boot Museum, in addition to writing poetry and theater in Latin, Venetian and Italian.