Vans, the 52-year-old brand best known for its unassuming slip-on sneaker, is on a tear.
Its annual revenue topped US$3 billion (NZ$4.4 billion) last year, up nearly 10-fold from a decade earlier, propelled in part by cheap and plentiful manufacturing in Asia.
But looming tariffs could ground Vans and other footwear brands. Ninety-eight per cent of shoes are manufactured abroad, with nearly three-quarters of those imports coming from China, according to the American Apparel & Footwear Association, making footwear one of the most heavily imported products.
Shoes are not on the list of goods expected to be hit by the latest round of tariffs, but the industry is on high alert after President Donald Trump said Friday he was prepared to extend tariffs to all US$500 billion worth of imports from China. "I'm ready to go to 500," he told CNBC.
"We would be asleep if we weren't concerned about it," Scott A Roe, chief financial officer of VF Corp, the parent company of Vans, as well as a dozen other brands including Timberland, Reef and the North Face, said in an earnings call on July 20.
"We are watching this very carefully."
Earlier this month, the United States imposed tariffs on $34 billion worth of Chinese imports including cars and industrial machinery. Shortly after that, President Trump said he would pursue further tariffs on an additional US$200 billion worth of Chinese goods.
Shoe companies rely heavily on Chinese-made goods, despite efforts to move more of their operations to countries like Vietnam and Cambodia in recent years. Last year, the United States imported US$14.8 billion worth of shoes from China, making footwear the fifth-largest category of Chinese imports, according to an analysis of census data by the American Enterprise Institute, a conservative think tank. (Other top imports: Cellphones, US$84 billion; computers, US$67 billion; toys, US$28 billion; and furniture and bedding, US$27 billion).
The shoe industry already pays nearly US$3 billion a year in tariffs, much of it dating back to legislation from 1930 that was meant to protect American manufacturing during the Great Depression. Canvas shoes, like the ones Vans sells, come with particularly hefty tariffs - as high as 68.5 per cent, according to industry groups.
"Footwear tariffs tend to be among the most regressive," said Nate Herman, senior vice president of supply chain at the American Apparel & Footwear Association.
"The lowest-priced shoes - children's fabric tennis shoes you'd find at Walmart - have the highest tariffs, while higher-end men's leather dress shoes are taxed a lot less," at about 8.5 per cent.
(One reason for that discrepancy: When the tariffs were originally negotiated in the last century, Converse, then a leading US manufacturer, lobbied to levy the highest duties on competing cloth shoes, Herman said. There are other decades-old holdovers too: Women's and children's shoes often come with much higher tariffs than shoes for men).
Nike, Saucony and Under Armour wrote a letter to President Trump earlier this year, arguing against more shoe tariffs. "Adding even more tariffs on top of this heavy burden would mean higher costs for footwear consumers and fewer US jobs," the letter said. "Any action taken to increase duties on Chinese footwear will have an immediate and long-lasting effect on American individuals and families."
Even if footwear imports escape additional tariffs, analysts say continued uncertainty could further roil an industry that has had tepid growth in recent years. Spending on shoes rose just 1 per cent last year, to US$80.2 billion, according to the US Bureau of Economic Analysis.
"This is all interrelated: Even if we're not on any tariff lists going forward, we're still going to see consumers cutting back on items like shoes because of price increases elsewhere," said Matt Priest, president of the Footwear Distributors and Retailers of America.
That could be bad news for brands like Vans, which has reinvented itself after filing for bankruptcy in the 1980s. Company executives would not disclose what percentage of its shoes are manufactured in China, but said Vans has "a very diverse supply chain".
Vans got its start in 1966 as a California-based manufacturer. Employees made rubber-soled shoes each morning and sold them straight out of the company's Anaheim factory in the afternoon. But by the late 1990s, Vans had shut its California factories and moved all of its manufacturing to Asia, in part to compete with lower-priced rivals.
Today, analysts say Vans' laid-back style and low prices - typically about US$50 - set it apart from competitors like Nike and Adidas. The company has also teamed up with a number of collaborators, from A Tribe Called Quest to Marvel Comics, in recent years, helping drive up sales with exclusive partnerships and limited-time offers.
Sales soared 35 per cent in the most recent quarter, making Vans one of the fastest-growing shoe brands in the country. Its canvas shoes - once popular mostly among surfers and skaters - have garnered widespread appeal in recent years. Among its fans: celebrities like Kristen Stewart and Frank Ocean (who wore them to the White House for a state dinner).
A rise in mainstream "streetwear" has also helped revive the brand, said Jane Hali, a retail analyst for Jane Hali & Associates in Boca Raton, Florida. Americans are increasingly looking for comfortable shoes that are casual but unique, she said, helping boost Vans, as well as rivals like Supreme, which last year sold a stake to the Carlyle Group.
"When you look at streetwear culture, the sneaker is always the focus," she said.
"That's where companies like Vans are coming in and dominating."
Vans' parent company, executives said, is already seeing an increase in the cost of belts and other accessories. Other companies, like Columbia Sportswear, have noted that the price of mannequins has risen about 4 per cent as a result of President Trump's tariffs on aluminium and steel.
"There's a real cost to the uncertainty," said Peter Bragdon, chief operating officer of Columbia Sportswear.
"A lot of these things have unintended consequences - the current system of tariffs is bad, but it's predictably bad. Not knowing week-to-week what the rules will be makes it difficult to invest."