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Pattenmakers Livery Company – Annual Footwear Dinner
Stationers Hall – Thursday March 1, 2012
Speaker: Richard Kottler, Chief Executive British Footwear Association
Having been involved with the Footwear Industry for around 25 years I am aware not only of the colossal changes during that time that have affected all of us, but have also seem demonstrated the underlying friendship and support that is a feature of our industry. From my early days with H and M Rayne when the help given to me by characters such as David Spitz, Richard Paice, John Church, Thomas Black, Nick Rayne and the late Ray Burston was incredible and so typical of how this business conducts itself.
I have been invited to talk you tonight to give some background on the present position of the British Footwear Association together with my personal view of the industry.
The BFA - like the footwear industry has changed – Our role is to represent the supply side of the sector - although over 30% of our members have retail outlets and nearly all of them are involved with web based sales.
When the BFA was formed some 116 years ago its remit was to represent the footwear manufacturing industry. Today we still represent the 25-30 remaining manufacturers in the UK - key names like Churchs, Loakes, Cheaneys, Barkers, Crockett & Jones and Gina.
We also represent the importers, numerically the largest group, including companies like Clarks, Pentland , William Lamb, Jacobsons, Suttons, and
T & A to name a few.
The third group is the brands - some well established, plus those up and coming ones trying to find their way in this messy complicated world of business we find ourselves in.
Over the past four years, I am pleased to say that the BFA has more than doubled it’s membership base to reflect this new world. We continue to upgrade our services and make changes to continue meeting the needs of our members and the industry. We are a not-for-profit organisation and every penny we generate goes back into the industry.
I would like to tell you about four important initiatives that I am particularly proud of:
- Training
- Export help
- Promoting ‘Made in Britain’
- The mentoring programme for small and medium businesses
Lets start with Training. In 2010 we created the BFA Foundation Course in Footwear Technology which in its first year had 23 trainees from ten different companies completing a ten-module syllabus.
This year to date, we have a further 40+ trainees nominated by eleven companies signed up for a course that will help address the most critical skills shortage in this industry - that of technical managers. The important thing about this course it that it was created by the industry for the industry with considerable input from across the industry, particularly from Clarks.
It was a great day in December when we presented the certificates to the first five trainees to complete the full course
The BFA believes in putting its money where its mouth is, and has to date invested over £30,000 in development costs for this programme - I and my Board believes that this is money incredibly well spent
Talking of investing in the industry the BFA has also contributed £15,000 over the past three years to our Training Support Programme distributing matched funding to member companies planning footwear-specific training for their staff.
We also work hard with Skillset and others to maximise any grants coming from Government sources on issues such as apprenticeships.
Continuing with our initiatives, the BFA has a well deserved reputation for providing informed and energetic help to firms wanting to export. Despite savage cuts in export funding by the Government and its agencies, we continue to win promotional and exhibiting money to ensure that anyone who wants to show at the major exhibitions can, wherever possible, receive financial support.
But just to put available support into context, five years ago the Government gave £210k in grants to this industry. In 2012 it is likely to be a mere £120k. On the other hand , this year alone, the BFA will spend upwards of £150k providing support and assistance to our exporting members.
We believe another worth-while investment.
We place a huge emphasis on helping exporters find agents or distributors and promoting British firms by organising groups of up to ten companies under a British banner – we have done this at Magic, GDS, MICAM and Pure in London.
The BFA has also recently joined the China Britain Business Council in recognition of the major importance of this market for UK companies. We have already held one seminar for members and plan more events in the future.
The third BFA initiative is to highlight and support the concept of Made in Britain. It is a well know fact that the footwear manufacturing sector has been declining over many years. In 1965, there were 110,000 people employed in it making 200 m pairs. Now there are 4,500 people making 5m pairs.
However, these bald statistics hide another story. All producers are currently working flat out to satisfy the increasing demand for British made goods and the Northamptonshire factories continue to set the benchmark for high grade men's welted products.
It is also interesting to note that the two biggest manufacturers of shoes in the UK are directly competing with so called low-cost countries and succeeding.
Both Hotter, which accounts for nearly one in three of all shoes made in the UK and New Balance, are reaping the rewards from making considerable investment in equipment and staff.
In addition, it is heartening to see that in the past two years, at least three small making units have started up.
The BFA carried out research across the manufacturing sector and has compiled a list of companies able and keen to carry out contract manufacturing for brands wanting the coveted Made in Britain label.
To date we have been able to marriage-broke introductions between at least fifteen brands and six factories. We also facilitated a deal with the Moda show for a Made in Briatin stand; and last year arranged a John Lewis
“meet the buyers” session exclusively for British made product.
Now all this is not going to lead to a substantial renaissance of the British footwear manufacturing industry but it will help; jobs will be created and hopefully UK based suppliers like Springline and others should benefit as well.
The biggest gap though is for quality ladies manufacture. With the shining exception of Gina who have just moved into a new, well equipped factory in London, there are virtually no factories capable of filling the continual and pent up demand from our designer brands who would love to make their product here and not in Italy, Spain or the Far East.
There is a real opportunity here for some courageous and enterprising entrepreneur. See me for details !
The last key initiative we have is to mentor " young" businesses starting up, or in their second phase of development. We receive at least one enquiry a week from new companies - usually recently graduated designers - wanting advice on how to crack the code of success.
Some we do the kind thing and pour a bucket of cold water over them in a nice way to avoid them setting off on a a badly considered, uncommercial route. Others however deserve a lot of our time - so we listen to their plans, steer them in the right direction, introduce them to advisers and help them with selecting the appropriate sales distribution channels.
In response to this demand, we have established a project team of experts covering sourcing, brand development, financial advice and sales and marketing. We have also investigated several sources of funding as this is always one of the key issues and we will continue to do this, difficult though it is to achieve in these tough times.
So those are the four key areas that we have been promoting and will continue to do so: training, export help, Made in Britian and Mentoring small businesses and start ups.
But this is not all - the BFA also provide a portfolio of services for our members ranging from distribution deals to providing credit reports and statistics. Overall, we work closely with Government and EU agencies but in the end we ultimately depend on our members allowing us to support them and are working increasingly closely with them.
So what about the future of the industry? Consumer consumption of shoes remains high, if static, at over £7bn a year with the great majority of that footwear being supplied by UK companies.
Manufacturing in the UK will grow steadily but will always be small – unless of course there is a miraculous government intervention – I wish!
Importing will experience a shake out as retailers close and Internet trading becomes even more important than its present market share of 12% - but importing will remain the driving force in the industry
Small brands will struggle but every year, 3-5 will make it and get to the magical £1 m sales, by being well funded and run by owners who understand that beautiful products have to be linked to a strong set of sales and marketing skills and savvy.
Looking around this room, I doubt that we will be seeing lots of new millionaires in our industry this year - but undoubtedly the industry is in good hands and will continue to evolve to meet market demands. It will never be complacent and will always be resourceful and resilient. And the BFA will continue to step up to the plate to support it.
Finally back to my opening remarks about the cameraderie of the footwear business. Many of you put a huge amount back into the industry by sitting on Committees, by working with the Livery Companies and Footwear Friends the industry charity, as well as helping the BFA help you.
Long may this continue and I am proud to be part of it
Thank you
Richard Kottler
Chief Executive – British Footwear Association
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