Kidderminster Footwear still views Europe as its main export market despite the ongoing uncertainty regarding the future relationship between the U.K. and the European Union (EU). In the meantime, the British sourcing specialist has brought the printing of package labels in-house in order to cut lead times and better cope with the growing automation of logistics at the receiving end of the supply chain.
However, due to the limbo in which the U.K.-EU relationship currently stands, buyers in the rest of the EU are not ordering until they know what the situation will be, said John Drysdale, key account manager of the British wholesaler and retailer, at the Expo Riva Schuh trade show last month.
The company, which also has its own retail stores, gets 65 percent of its overall revenues in the U.K. Another 20 percent comes from other countries in the EU and 15 percent from other foreign markets. The company doesn't want to disclose its sales revenues but says it handles between three and four million pairs of shoes per year at the company's logistic facilities in the U.K. Many shipments are directly sent to the clients from the factories.
Drysdale indicated that it's not worth making plans as “no one has an idea” what the outcome of Brexit will be. As widely reported, 52 percent of British voters were in favor of the U.K.'s departure from the EU in a referendum held on June 23, 2016. The country was due to quit the EU last March 29. But, after the parliament rejected an agreement between the British government and the EU on the conditions of the divorce, Brexit's deadline was postponed to Oct. 31.
Theresa May, the British Prime Minister who negotiated the Brexit agreement, has resigned as head of the Conservative Party, thus opening a leadership contest expected to be won by Boris Johnson, who led a campaign to leave the EU. The winner of the contest will become the British prime minister by July 20. Johnson said that he would seek a new deal with the EU but warned that the country has to be prepared for a no-deal Brexit. Without an agreement with the EU, the parties would trade under World Trade Organization (WTO) rules. Drysdale said that applying WTO criteria would not be an issue for Kidderminister in terms of supplies or servicing clients in the EU.
Kidderminster Footwear was established in 1865 and has always been owned by the Blunt family, currently through a private partnership. About a dozen family members work with the company, which employs around 250 people.
Most of the firm's goods are bought in China and India, countries that it entered in the late ‘70s, establishing long-term relationships with local manufacturers. It operates two warehouses, located in the English West Midlands. The main distribution center is a 200,000-square-foot facility in the town of Kidderminster, south of the city of Birmingham, while a secondary site is situated in Stafford, north of Birmingham.
Retail represents some 40 percent of Kidderminster Footwear's revenues. It operates two chains, Blunts Shoes and United Footwear, which have a combined 20 stores operating only in the U.K. The company also runs its own website and works with internet marketplaces. It sells 18 percent of its shoes online. Drysdale pointed out that e-commerce is growing and there is a debate within the company on the future of its physical stores.
The wholesale segment represents the remaining 60 percent of the business and is equally divided between ordinary stock management and sourcing for private labels. The main wholesale markets are the U.K., Italy, Poland, Australia and some South American countries. The products either transit through Kidderminster's storage sites or are shipped directly from the factories.
Drysdale claims that, thanks to its large client base, Kidderminster knows the markets trends and can advise its clients on which products are best adapted to their region.
Meanwhile, the firm has brought printing activities in-house to reduce the lead time to package goods for the clients, an increasingly sensitive service that was previously performed at the factories. Drysdale explained that growing automation at its customers has tightened the relationship with the wholesaler, which has to guarantee that the products are properly packed and codified to the clients' requirements in order to avoid holding up the reception and dispatching downstream. Kidderminster Footwear receives the shoe packages in different shapes and sizes from its manufacturers, but as Drysdale pointed out, automation requires the use of standardized packages.