The company’s shoes are manufactured in China, and Pavone said they can’t be made elsewhere — though it’s not for lack of trying.
“I’ve tried talking to manufacturers in Vietnam, Brazil, India and even one very small factory I was able to find in the U.S.,” she said. “All of them have unanimously said that China is the only supply chain currently that can do what we need at scale.”
And Pashion was hit hard by another rule change. Earlier this year, it qualified for and signed a $5 million loan from the Small Business Administration. Pavone planned to use that money to buy Pashion out of predatory debt it took on to survive the pandemic, invest in hiring and buy more inventory. But the Trump administration changed the qualifications to receive the funding, now requiring all shareholders to be U.S. citizens — and Pavone said her company raised 1.7% of its funding from international investors. The loan was pulled.
“We feel completely ignored, and we also feel completely out of control,” she said. “It basically feels like we’re just waiting for the other shoe to drop every second of the day.”
Taking action
The changes and uncertainty have dashed Pavone’s big dreams for the year. She said she slashed inventory orders from $1 million for the fall and $1.5 million for the holidays to around $300,000 each, wanting to keep her budget open to assume tariff liability.
“This went from being a growth year to a year where we’re really just trying to make ends meet and stay afloat,” she said.
To handle the increased costs, the company added a tariff tax averaging $15 to $25 per product when U.S. customers check out. Demand from U.S. consumers has since dropped around 30%, Pavone said.
“There’s plenty of customers where even though they understand what we’re doing, they’re now priced out of what they can pay, so they can’t buy,” she said.
The post How a high heel entrepreneur is handling tariffs before the other shoe drops appeared first on NBC News.
