Predictably, exhibitors at last month's Modacalzado fair in Madrid said the soft dollar and Asian competition continues to wreak major havoc on the industry. Citing dramatic cut-backs and cancellations, they claimed that current trading conditions with such markets as the USA and Russia have become so tough that the situation has to change.

Romu’s, an Alicante-based producer of comfort footwear with a daily production of roughly 3,500 pairs, ships to over 60 countries. The USA is one of its pivotal markets, but it has been sending much less there lately under its Helle Comfort/Romu’s label, although it has gradually reduced its US dollar prices by 30 percent. It has undergone order cancellations from Russia, where buyers have also been purchasing in US dollars, often amounting to cutbacks of 50-70 percent. The 18-year-old firm, which has annual sales of €13 million, continued to exhibit at the MosShoes fair in Moscow only because Russia “a market for the future.” Its entire production is made in Spain and there are no plans to go offshore.

Hispanitas is eyeing options in Russia through the formation recently of a 3-brand consortium that also includes Panama Jack and Magnanni, a prestigious men’s footwear label based at Petrer, near Alicante. Hispanitas, which makes mother/daughter shoes, has worked for two seasons with a local distributor who is also a retailer, with two stores in Moscow. Because of rapid domestic growth which has saturated the home market, Hispanitas is also turning its sights to Germany and to the USA.

Angel Infantes, a men’s footwear producer from the Alicante region with a daily production of 600 pairs, is pursuing new customers in such countries as France, Germany and Russia.

As Spanish footwear exports and production continue to decline, China is offering brands a means of improving both profit margins and revenues. While all the Spanish shoe companies tend to maintain production of their top lines in Spain, more and more brands are producing secondary lines in cheap-labor China, and several are opening shops there in order to send out a clear message about the brand. Many department stores in China will buy shoes, but people say they tend not to understand the idea behind them.

Spain sent less than 100,000 pairs of shoes to China last year. However, according to industry officials, even if you don’t sell many shoes in the country now at your own stores, it’s important to establish the potential for the future. At the Asia Pacific Leather Fair in Hong Kong last month, Rebeca Sanver, which had a very busy booth, pointed out that it has been coming to Hong Kong for some 15 years, believing that every one of those years had been necessary to build up relationships and give customers familiarity with its products. At the behest of a Chinese customer now turned partner, Rebeca Sanver opened a store in Beijing last year. Sales are going so well there that it’s considering a second door in the city.

Brands very much want to establish separate identities for their secondary lines, and seem largely unwilling to sell the less expensive ones in China, perhaps for fear of having their top lines be seen as less prestigious. Both Rebeca Sanver and Jaime Mascaro have different booths for their two lines at the big European shows.

About 15 years ago, Sacha London started producing in China, arguing that the capacity in Eastern Europe was unavailable and Northern Africa was not sufficiently developed. The company still uses some of the same factories it did at the start. While the Spanish-made Sacha London fashion line retails for about $150 a pair globally, the secondary line, called Sacha Too and retailing for $80-90, is made in China and is sold mainly in the USA. The company has a couple of projects to open its own store in China, but everything is still in the planning stages. Sacha London has manufactured in Vietnam in the past, but with the withdrawal of the European Union's import quotas, it has moved all Asian production to China.

Rebeca Sanver shoes start at €100 per pair, while the group’s secondary line, To Be, starts below €50 per pair. This is the fifth season for To Be, which was first made in India because the group had contacts there, but is now made mostly in China, with some production in Brazil and India. The materials come from Italy and Spain. Rebeca Sanver, which is very feminine and less casual, accounts for about 85 percent of the business, while To Be is a bit more funky, casual, and aimed at people who are a little younger at heart. To Be can be found in Europe, Japan and Taiwan.

Jaime Mascaro makes its secondary line, Bini-Bini, in China, though it only retails the line in Western Europe. While Jaime Mascaro might sell for about €120 per pair, Bini-Bini goes for about €70 per pair. The company has developed Bini-Bini for a younger consumer, perhaps 15-30 years old, and it views the two lines as completely different. Bini-Bini is in its third season, and the company, which says it’s still learning what to do, uses different agents than it does for Jaime Mascaro. Rebeca Sanver is similarly in the process of splitting its sales force between its own two lines.

All these Spanish firms continued to exhibit at Fashion Access, the finished products section of the huge APLF fair in Hong Kong. Some exhibitors at the Modacalzado fair in Madrid said manufacturing in China is synonymous to being competitive. Jocomomola, a hot junior brand by Sybilla, a fashion icon from the 1980’s, began producing sneakers and rubber boots in China for the current Spring/Summer season. So far it has gone very well, with 1,500 reorders on a China-made sneaker which is priced at €24 at wholesale. With two Italian showrooms - in Milan and Rome - Jocomomola sells to 17 countries.

On the other hand, some Spanish manufacturers such as Nordika’s are starting to report a certain disappointment with the quality of certain Asian fabrications. In general, the more upscale Spanish manufactures claim that they manage to survive against China’s competition because they continue to offer good quality at price points 30 percent below those of their Italian competitors.