Brands Briefing: How higher oil prices are shaking up the footwear industry

It’s another hurdle for an industry that’s been battling supply chain woes for the better part of the last decade. Some 99% of footwear sold in the U.S. is imported, and after dealing with the pandemic and sky-high tariffs, footwear brands are now grappling with the oil supply shock.

Some brands, like Black Suede Studio, are hearing from suppliers that they’ll need to pay more to bring in materials like foam and adhesives. Other brands, like Kuru, are getting elevated fuel surcharges. Either way, footwear companies are trying to find a way forward by changing their forecasts, clustering orders together or contemplating price increases.

“A lot of brands are trying to catch up on supply, because they feel like it took so long, … because of tariffs, to ramp up production,” Logan Bird, CEO of Mephisto U.S.A., told Modern Retail. “The same thing [may apply] here. As long as [the oil issue] continues, this will continue to have a longer-lasting impact for the industry as a whole.”

Doing the math

In March, The Footwear Distributors and Retailers of America, the nation’s biggest footwear trade association, put out a report to its more than 500 members, warning them about the industry’s exposure to oil prices. The FDRA also touched on rising oil prices at its annual Executive Strategy Summit on April 22–23.

According to the FRDA’s report — Modern Retail received a copy — oil prices influence “more than half of a shoe’s total cost structure” across materials, production and transportation. The report also stated that about “70% of materials in a synthetic shoe are petrochemical-based” and that “about 30% of those material costs are directly tied to crude oil prices.”

In fact, oil has a direct tie to 25 shoe components, including synthetic rubber (like outsoles), nylon fabrics (like woven uppers) and polyethylene foam (like sockliners). The FDRA cautioned that if oil holds above $90 per barrel for consecutive months, cost pressures will accelerate “with reduced ability to absorb increases.” On April 26, Goldman Sachs warned that oil could trade at nearly $120 a barrel later this year, if the conflict continues.

If oil prices are making shoes more expensive to produce and transport, shoe shoppers are bound to feel the effects, said Matt Priest, president of the FRDA. Priest told Modern Retail that he can “easily” see a 10-15% compounded increase in costs by the time a shoe reaches the consumer. A lot of brands have held off on price increases because of tariffs, he said, but inflation is still a concern. Consumer prices rose 3.3% for the 12 months ending in March, per government data.

“This will be one of those things where, as we head towards back to school and those shoes start to flow in, we’re going to be really hard pressed not to tamp down these price increases, no matter what the reason is, whether it’s additional tariffs or it’s oil prices,” Priest said. “That’s one of the challenges of this environment.”

Even sneaker collectors are feeling the pinch from higher oil prices. The gamified sneaker app HauteFire is seeing sneaker fans put more money toward shoes they believe will “hold or grow in value,” rather than “chasing every general release,” CEO and founder Stephon McCoy told Modern Retail. “In an era of high oil prices and tighter wallets, big collaborations [current and old] are winning, and general releases are losing,” McCoy said.

Contingency plans

As oil costs continue to spike, footwear brands are figuring out their next moves. They all have their own needs and timelines, based on which raw materials they use, where they manufacture their goods and whether they’ve already raised prices.

Mephisto U.S.A., which manufactures in France and Portugal, largely uses natural rubbers and leathers to make its shoes. As such, it’s feeling the biggest effects from oil prices on its shipping costs. The company is now changing its forecasting for orders from France, going from three months out to six months out to try and lock in costs before they go up.

“You’re trying to hedge the fact that you do expect that this conflict continues, that there’s a constraint on oil supply, that the price [of oil] either settles higher or continues to climb — and you’re trying to offset that in every which way possible,” Bird said. “If you possibly can, you’re getting ahead of it now, as opposed to letting the volatility determine how you react to it.”

Kuru, which manufactures in China and Vietnam, is also dealing with more expensive transportation costs. The brand’s fuel surcharge is up “over 30%” since the start of the year, specifically tied to the increase in fuel prices, CEO Bret Rasmussen told Modern Retail. Kuru’s ocean shippers have also increased rates by around $1,500 per container since the start of 2026.

“If these elevated fuel surcharges persist throughout the remainder of the year, we estimate it could cost us more than $350,000 in added expense,” Rasmussen said.

Kuru’s factories have their own challenges. With oil prices rising, one factory has received notice from its suppliers that prices for items like foam and laces are imminently going up. Those costs could soon be passed on to Kuru and its factories, and the brand will need to decide whether to absorb costs or pass them on to consumers.

Right now, it’s too soon to make a call, Rasmussen said. But either way, “We want to try to be as fair as we can with our customer,” he explained. “That’s most important.”

Black Suede Studio, which manufactures footwear primarily in Brazil and Italy, has started getting higher-than-usual quotes from shippers and suppliers in the past couple of months. Suppliers, in particular, want to increase prices on foams, and shippers are “definitely” upping rates for long-distance transportation, founder Kris Avikian told Modern Retail.

To save money, the brand is trying to do more bulk shipments, rather than piecemeal orders. The company does have “a little bit of room” to absorb costs, because it raised the prices on some shoes last year, due to tariffs, Avikian said. If Black Suede Studio does need to raise prices, Avikian said it would be “a maximum of 5% on certain things, if that.”

“We’re managing [the scenario] as best we can, and we’re just trying to maintain the brand’s integrity to make sure the quality stays the same or is even improving,” Avikian said. “And if we increase prices, we’re really making sure that we consider everything carefully.”

What we’re reading

• Purely Elizabeth has hired the investment bank Houlihan Lokey to seek a sale of $600 million or more, sources told Axios.
• Nike is laying off about 1,400 people, or 2% of its global workforce, to streamline operations, per Reuters.
• Claire’s is closing its final stores in the United Kingdom, in a move that will impact 1,000 jobs, writes The Guardian.

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