Clothing makers more flexible than shoe makers

U.S. consumers, who are now paying more for everything from airline tickets to bagels, may soon notice that prices for their shoes are rising more quickly than prices for their clothes.

That is partly because most shoes sold in the United States are made in China, where fuel and labor costs are soaring, forcing manufacturers to pass on higher prices to consumers. By contrast, apparel production is spread around the world, giving companies more options for lower-cost labor.

Executives gathered this week in New York for the Reuters Consumer and Retail Summit said they were exploring new markets for their factories as they seek to lower manufacturing and shipping costs.

Footwear factories, which have a lot of highly engineered equipment, are hard to relocate, said Wesley Card, chief executive of Jones Apparel Group Inc (JNY.N: Quote, Profile, Research).

"They are moving more toward the north (of China) where they can, and doing everything they can to offset" rising wage rates and energy costs, Card said. But, he added: "I don't see any major shifts in where footwear is manufactured. There's a little bit of broadening, but not a lot. They're just not easy factories to pick up and move."

"I think next year we're going to start to see some low-single-digit price increases in footwear and accessories," said Card, whose company sells shoes under brands including Nine West and Easy Spirit.

While as much as 95 percent of all shoes sold in the United States are made in China, only about 35 to 40 percent of apparel is made there, Card said.