The coronavirus-caused pandemic has brought the economic strength of the local footwear manufacturers to their knees as Eid sales slumped by 80 percent. Only in Ramadan, they used to do brisk business and earned 30 percent of total revenue of a year during Eid-ul-Fitr but the shoemakers are now struggling to meet operation cost. Business insiders said the coronavirus-caused pandemic came as a bolt from the blue and the hope of big turnover this year was dashed. In comparison with the previous year’s Eid sale, footwear retail business this year hovering around 20 percent trimming down of 80 percent sale which is not fat enough to meet staff salary, rent and utility bills. Market players involved with footwear manufacturing and marketing told the Business Post that about one-third of the total revenue of a year is generated from Eid sale which is around Tk 2000 crore to Tk 2500 crore. The total turnover of footwear sale in the local market revolve around Tk 7,000 and Tk 8000 crore a year and about 10 to 12 lakh people are directly or indirectly employed with this industry. But the overall business of footwear industry received an unexpected blow from pandemic which forced many manufacturers either to suspend their orders, shut operation or leave the workers shed tears secretly. Talking to the Business Post on Monday, business insiders said giant footwear manufacturers may not face major problem but many of the small entrepreneurs will face existential threat and may not survive in this business as their working capital is drying up quickly in the absence of business transaction. Local footwear giant Apex, invested Tk 150 crore targeting the Eid-ul-Fitr sale but coronavirus pandemic scaled down the sale up to 80 percent and leaving 40 percent of their shops closed in this peak Eid season. Talking to the Business Post on Sunday, Sagnik Guha, General Manager (marketing) of Apex Footwear Limited, said, expectation was high this year and preparations were also made in line with the growing demand of shoes but coronavirus pandemic came as a bolt from the blue which slashed our Eid sale up to 80 percent. “Last year we managed to fetch around TK200 crore from Eid sale but this year we have no expectation just keeping our shops open to serve our customers. More than 30 percent of revenue from total year end sale comes from Eid season and there is a massive investment plan for grabbing this market but coronavirus dashed the hope. There are piles of finished products in our warehouses which we expect to sell in Eid-ul-Adha” said Sagnik Guha. According to the data provided by Apex, there are some 250 Apex outlets and 200 franchise outlets across the country. Of them, only 60 percent of outlets are in operation following the strict healthcare and social distancing guidelines. Amid the pandemic, sale in e-commerce platform of Apex is surging which according to Sagnik Guha “People are feeling encouraged to buy products from online platform because of unprecedented situation as many people are avoiding unnecessary travel and gathering”. “We are facing some problems in delivering our products across the country as other stakeholders involved with this process yet to resume full operation which is actually delaying our product delivery,” he added. Another local footwear brand, Orion Footwear Ltd, invested Tk 12 crore eyeing Eid which, according to their accounts, brings 40 percent of the total turnover in a year but this year things are going on in different direction. This company can’t arrange salary of salespersons and other expenses let alone making profit. Of the 40 Orion outlets across the country, only 18 of them are open for business where turnover stood at 10 to 15 percent compared to that of previous year’s Eid sale. Mohammad Minhaz Uddin, business development manager of Orion Footwear Ltd on Sunday said, “Because of pandemic, sale is very low in such a peak season when we generally make 40 percent of the total yearly revenue from the month of Ramadan. We have to bear a massive operation cost such as staff salary, outlet rents, utility bills, and expenditure to run corporate office which adding up to our losses day by day with the lockdown dragging on. Expenditure remains same but revenue has plummeted to at least 80 percent”. “Total turnover in this Eid so far stands at 10 to 15 percent against the expectation. Slump in purchase capacity among the consumers against the backdrop of long running lockdown coupled with increasing consciousness about hygiene and social distancing drove people away from shopping which resulted in low turnover” he added. Bangladesh Paduka Prostutkarak Samity, an organization of 500 to 700 small and medium shoe factory owners who produce budget footwear, accounts that their accumulated loss this year is Tk 150 crore as total business cycle came to a halt because of coronavirus. Shahin Khan, President of Bangladesh Paduka Prostutkarak Samity said, coronavirus pandemic is taking heavy toll on us as our supply chain halted at a time when we see sharp spike in sale in Eid—the prime season for footwear business. We are suffering at least Tk 150 crore loss because of the failure to grab Eid opportunities”.
