Start-rite boss forecasts shift from the Far East
10:56 30 October 2013
The boss of one of the oldest shoe brands in England has forecast an about-turn in global manufacturing that will see more firms shifting their Far East production back to Europe.
Peter Lamble, managing director of Norwich-based children’s footwear company Start-rite shoes, said his business had upped its production in Portugal and Spain because high inflation and rising wages in China were making the EU more cost-competitive.
But he said the changing market conditions would only inspire a resurgence in UK manufacturing if there was more skilled people to deliver the work.
The move comes as the brand unveiled its strategy to grow its revenues through efficiency savings, the opening of a new Norwich shop and fresh investment in its e-commerce operation, which recently recorded an 80pc surge in sales during the August back-to-school period.
And he pinpointed the Australian market as a key export opportunity, thanks to its robust economy and a culture of making children wear school uniforms – a trend which ties in with Start-rite’s range of school shoes.
Mr Lamble said he expected the business to be 5pc ahead of last year, where the firm saw turnover rise marginally to £17.1m while pre-tax profits were down £857,000 to £354,000. He predicted strong growth to return in 2015.
“We have got better with our production in Spain and Portugal,” he said. “There is a move back towards Europe and it is driven by high inflation in the Far East where wages are growing quickly in China and to some extent in India as well.
“There is still a difference in pricing between the EU and the Far East, but that difference is narrowing and you will see over time that more manufacturing will come back to the EU. Will it come back to Britain? That depends if there are enough skilled workers to do it.”
“We think this spring will be quite difficult for us because of the cuts to child benefit, which will have impacted on consumer spending, while some retailers will still have the memory of the poor weather during the spring period this year. But next year we are expecting to improve our business, although we are expecting that to happen in the second half of the year, rather than the first half.
“This back to school period we saw 80pc growth in our online sales, which was more than we could cope with,” he added. “Customers clearly feel more confident about ordering online, so we need to beef up our service further after launching our new website back in July.”
Start-rite, which employs about 100 people, recently opened a new outlet store selling a range of shoes brands at its headquarters on Broadland Business Park under the One Small Step One Giant Leap brand, which it bought two years ago.
And it confirmed that it would be investing in a new warehouse management system, which will enable them to dispatch more pairs of shoes at a greater speed, while helping to reduce its spend on seasonal workers.
He added: “The Start-rite shop and the new One Small Step One Giant Leap outlet store gives us a more direct engagement with our customers here. We get to hear directly what our customers think of our products rather than hearing second hand through retailers what people think of our brand.”