Import Duties Debate: St. James's Knitting Company Raises Concerns over Approach in U.S.

Import Duties Debate: St. James's Knitting Company Raises Concerns over Approach in U.S.

Hangin' out at the Saint James Knitwear factory in Manche, Luc Lesénécal keeps his eyes on both NYC and Osaka. He's got two major concerns: American and Japanese sales for his historic brand, established back in '89. Known for those cozy wool sweaters and cotton mariners, the company's even a sponsor for the World Expo in Osaka, happening from April 13 for half a year. They're decking the staff in the French pavilion and hawking a special Osaka-themed marinière.

From the factory, "11,000 pieces have been shipped to Osaka to stock products made in France. With the pace of sales after the expo began, it's probably not enough," calculates the boss of the Normandy company. A leveraged buyout (LBO) in 2012 and another in 2020 has given him and two other pals control of the SME.

But here's what really worries him: those extra duties at the U.S. border. "North America accounts for a third of our export turnover and 13% of our sales––that's 156,000 out of 1.2 million," says Lesénécal.

Now, let's consider the possible impacts of these increased duties on exports to the U.S.:

• Costs: Hiked duties mean bumpin' up costs for exporters. They can either eat the costs themselves or pass them on to consumers, which could affect sales and profitability.
• Competitiveness: Increased duties can serve as trade barriers, makin' it harder for Saint James to keep up in the U.S. market, especially if competitors avoid these extra costs.
• Consumer Behavior: If prices rise due to increased duties, consumers might opt for cheaper alternatives, potentially reducin' sales for Saint James.
• Market Share: The brand's market share could decrease if it can't compete effectively with brands benefitin' from lower or no duties.

So, to combat these issues, Saint James might need to adjust their supply chains or consider manufacturin' in the U.S. to, well, lower duties. But this would likely involve a significant investment and operational changes. And, don't forget to comply with U.S. customs regulations to avoid additional costs or delays.

1. Luc Lesénécal, the boss of the Normandy-based Saint James Knitwear, admits that the 11,000 pieces shipped to Osaka for the World Expo may not be enough to meet sales demand.
2. A series of leveraged buyouts in 2012 and 2020 gave Lesénécal and two other partners control of the small-to-medium enterprise (SME).
3. North America contributes significantly to Saint James' sales, accounting for a third of the company's export turnover and 13% of the total sales.
4. The potential increase in U.S. duties on exports could lead to higher costs for Saint James, pushing the company to either absorb the costs or increase prices for consumers, which might impact sales and profitability.
5. Enhanced duties might also impact the brand's competitiveness in the U.S. market, as competitors who avoid these extra costs may have an advantage.
6. Consumers might switch to cheaper alternatives if prices rise due to increased duties, which could potentially reduce sales for Saint James, impacting market share. To counter these challenges, Saint James may need to reconsider their supply chains, potentially manufacturing in the U.S. to lower duties, which would involve significant investment and operational changes, and ensuring compliance with U.S. customs regulations to minimize additional costs or delays.

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