Import duty 'holding industry back'

Shoe distributor Denstock Corp founder Roger Stockton says for 25 years the business has faced up to regulatory hurdles that today include a 10 per cent duty on imports.

Stockton says revenues of $14 million could grow 10 per cent in 2011, though the company is still concerned about the impact of the duty in the future.

In the New Zealand market there were several challenges, including the increase in GST to 15 per cent from October 1.

Retailers were asking wholesalers to pull back on their price so the retail price could stay the same, Stockton said.

Prices from Asia were going up in the order of 7 per cent over the next year, while a weaker kiwi dollar generally made imports more expensive. The 10 per cent duty on prices paid to land the shoes in New Zealand remained the key concern.

"The industry generally is being held back because of the import duty ... the import duties and [a previous] import licence were put in place to safeguard the New Zealand manufacturing industry, but there is no manufacturing industry now – nobody in New Zealand makes sports shoes."

In Australia the import tax was down to 5 per cent alongside a 10 per cent goods and services tax.

Denstock was started by Stockton in 1986 – when import licences were limited and were gained through a competitive bid process.

"I remember in the first year I started I'd actually committed about $800,000 before I'd even sold a pair of shoes, which was quite horrific."

Stockton started as a distributor of the imported Hi-Tec tramping and sports boot brand sold to sports retail traders, and has since diversified into fashion and high-fashion items.

The business – which is co-owned by himself (80 per cent), Fergus Stephens and Don Milne (each with 10 per cent) – remains centred around the Hi-Tec boot produced by Hi-Tec Sports International of the United Kingdom.

In October Denstock had been appointed distributor of Hi-Tec footwear in Australia, and now also controls the trans-Tasman rights for a Hi-Tec sub-brand, Magnum – which makes combat boots used by New Zealand military, police and St John ambulance staff as well as federal police in Australia and other forces.

Other sport-outdoor-fashion footwear brands supported are K-Swiss (originating from Oregon in the United States), Terra Plana (London), school shoe brand Ascent (Brisbane), D-co (Copenhagen), Bandal and United Nude which are top end shoes from Amsterdam retailing for between $300 and $600 a pair.

The company imports about 80,000 shoes into New Zealand and distributes them into stores like Rebel Sport and Stirling Sports. It will import about 60,000 shoes into Australia in its first year of operation.

The Australian market formed half – about $7m – of Denstock's annual revenues but there was room to grow through 500 untapped retail outlets. It also has distribution rights there for the brands Bandal and United Nude.

"The market in sports shoes in New Zealand has diminished with the fact that people like Rebel Sports have got stronger and the independents have disappeared, so there's less people to sell to, whereas in Australia there's probably six or seven groups bigger than Rebel ...," Stockton said.

"The potential in Australia is far greater than it is here."

The company, with 11 New Zealand staff was looking to add to a smaller Australian team led by Sydney-based manager Glenn Lill.

Stockton's career before 1986 included four years with the German-based sports and footwear giant Adidas – as marketing manager for New Zealand.

"It was a period, in fact, when various things in the Adidas stable were launched which were brand new in the world," he said. "We purchased a huge injection moulding machine (based in Christchurch). We were the first people to put injection-moulded shoes into the market here."

- © Fairfax NZ News