Portuguese Shoemakers Get Fancy

Alberto Sousa and his son, Filipe, are survivors. When their shoe factory northeast of Porto began losing clients to China a decade ago, the family-owned business revamped its strategy. “My father said to me, ‘Our costs are higher, our team is better. We have to sell better shoes,’ ” recalls Filipe, who is general manager of Alberto Sousa. Rather than compete with Asia on price, the Sousas wooed high-end labels and launched their own line of leather shoes, Eureka. Today the 430-employee company is among the biggest in Portugal’s shoe industry, producing 2,200 pairs daily and operating almost 30 stores. Revenue was €28 million ($32 million) in 2014; the company estimates it will bring in €31 million this year.

Despite Portugal’s recent economic troubles, which forced its government to seek a €78 billion bailout in 2011 and implement harsh austerity measures, the Sousas and other shoemakers are thriving. The nation’s roughly 1,500 shoe factories employ more than 37,000 people and last year exported 77 million pairs worth more than €1.8 billion, up 50 percent from 2009, according to the Portuguese Footwear, Components and Leather Goods Manufacturers’ Association. The industry’s evolution from low-end to high-end exporter is a “major success story for Portugal” and a bright spot amid the crisis, says José Neves, the Portuguese-born founder of Farfetch, a London-based fashion e-tailer that stocks products from hundreds of independent boutiques worldwide. Neves also founded a company that helps shoe designers find manufacturers in his native country.