Berkshire Hathaway Corp.’s sales across its apparel and footwear businesses slid 4.5 percent in 2022 compared to 2021 due to inventory reduction efforts in the mass channel, according to the holding company’s annual report. The businesses include Fruit of the Loom, Russell, Spalding, Garan, H.H. Brown Shoe Group, and Brooks Sports.
The H.H. Brown Shoe Group’s footwear brands include Justin, Tony Lama, Chippewa, BØRN, B•Ø•C, Carolina, EuroSofft, Söfft, Double-H Boots, Nursemates, and Comfortiva.
The declines in the apparel and footwear businesses, according to Berkshire Hathaway’s report, “were driven by lower volumes, as major retailers reduced orders in response to rising inventories.”
Berkshire elaborated in its 10K filing, “Our apparel businesses were negatively affected in 2022 by low sales volumes, reduced manufacturing efficiencies and higher input costs, including raw materials, freight, labor and other operating costs. The reductions in sales volumes and supply chain issues in 2021 and 2022 have also elevated our current inventories. We currently believe retailers will continue to constrain purchases in the near term and that our sales volumes and earnings will continue to be negatively affected. We are taking measures to right-size our operations for the long-term and reduce product inventories to more appropriate levels.”
Brooks had reported separately that sales increased 6 percent in 2022.
The overall 4.5 percent decline for Berkshire Hathaway’s Apparel and Footwear businesses followed a recovery year in 2021 that saw sales climb 25.3 percent due to inventory restocking by certain customers and from broadly increased consumer demand. In 2020, Berkshire Hathaway’s Apparel and Footwear sales declined 6.1 percent due to the negative effects of the pandemic.
The Apparel and Footwear businesses are part of Berkshire’s Consumer Products segment, which saw overall revenues increase 3.1 percent to $16.1 billion in 2022 after climbing 28 percent in 2021. The Consumer Products segment also includes Forest River, Duracell, custom picture framing products Larson-Juhl, jewelry products Richline, and recently-acquired Jazwares, a maker of action figures and toys.
The overall Consumer Product segment’s 3.1 percent gain in 2022 reflected an 8.0 percent increase from Forest River, a maker of recreational vehicles, cargo trailers, utility trailers and pontoon boats, and the acquisition of Jazwares, substantially offset by lower apparel and footwear and Duracell revenues.
Pre-tax earnings in the Consumer Products segment were down 23.0 percent to $1.53 billion.
Photo courtesy Russell Athletic