Reebok's Founder Discusses Challenges in Moving Production from Asia

Shifting clothing manufacturing to the West encounters major challenges, especially due to the shortage of workers willing to operate sewing machines for extended hours.

Joe Foster, now 90 and a seasoned figure behind Reebok since cofounding it in 1958 in the UK, expressed his insights during an interview on the Yahoo Finance's Opening Bid podcast, shared this Monday.

In addressing the difficulty companies such as Nike, Adidas, and Reebok face in moving their manufacturing bases from Asian countries, Foster described it as a task that's nearly impossible to realize swiftly.

"For securing the vast quantities needed, we must engage locations with a large workforce ready for the task, from women operating sewing machines to men on production lines. This transition isn't instantaneous," Foster explained.

"In regions like the UK, this labor is scarce as people have pursued other roles, mirroring a similar trend in the United States," he mentioned.

Achieving the goal of moving production westward requires advanced automation for crafting shoes, which is complex due to sneakers consisting of over a hundred parts.

The industry hasn't evolved to fully accommodate this level of automation, and thus, the production of clothing and footwear is anticipated to remain anchored in Asia for an extended duration, he noted.

Current Location of Reebok's Manufacturing

At present, Reebok's manufacturing is centralized in Asian nations, specifically Vietnam and China. The enterprise has seen leadership under Todd Krinsky as CEO since 2022.

The company functions under the ownership of Authentic Brands Group, based in New York City, which also encompasses various other apparel names like Champion, Billabong, Van Heusen, and Ted Baker.

Retailers are tackling the repercussions of tariffs introduced during Trump's administration, targeting essential apparel-producing countries in Asia. Currently, imports to the US from Vietnam and China are subject to tariffs of 20% and 30%, respectively.

In a financial disclosure from June, Nike stated plans to increase prices for US consumers, predicting an additional $1 billion in expenses due to tariffs.

Other businesses have voiced plans to relocate production to the US, as a strategic move to alleviate tariff impacts. Notably, in April, luxury brand LVMH deliberated enhancing its production scale within the US.

Reebok has not yet provided comments to Business Insider regarding these issues.