Each country was waiting to buy the shoes, but they weren’t exported to
other countries. Armenian shoes were primarily competing against other
shoes made in the Soviet Union. Despite that, the final years of the
Soviet era are considered as the first stage for shoe production. The
second stage began during the years of Gorbachev’s perestroika when
cooperative production initialized. Shoe production skyrocketed out of
the framework of the state, however, it was still on the account of the
state. The factories were doing away with the material and even the
tailoring machines. Shoes were tailored in small basement factories.
The shoes were then exported to Russia. The “Shoe Business” was very
common during the second stage. Everyone, starting from people who had
nothing to do with shoes, were suddenly involved in that profitable
business.
It was then that tailoring became an obsession and got to the point
that the “rich” were tailoring shoes from linoleum. They didn’t even
save the seat covers of the buses and trolleybuses. This helped lower
the level of the Armenian shoe. The third stage started a couple of
years ago and despite the slow tendency, it continues to develop. The
modern day Armenian shoe competes with Russia just like the ones before
it, however, there are not too many exports. The producers complain
that the state does not pay any attention to them, meanwhile shoe
production is one of the businesses in Armenia that can seriously grow
and be helpful for the country. “Look, in order for our shoes to be
exported abroad, in order for us to participate in foreign exhibitions
and take in orders, we must tailor a minimum of 10,000 model pairs of
shoes. This is a big amount for the shoe factory workers. We need large
amounts of investments,” says former owner of the “Masis” shoe
company’s Kanaker branch Ashot Babayan. “Armenia is no longer part of
the Soviet Union. The Russians can not change the material with that of
the Italian one and tailor the shoe at a cheap price. We must get a 24%
loan from the banks to pay for the taxes and customs taxes, export our
product and get some profit. After getting the profit, we can take care
of our other expenses, keep a little to ourselves and continue working.
We can not work under these conditions where everything is so
expensive.”
The tailors affirm that the modern shoe has more quality than that of
the last two stages. There is a contrast between the shoes of today and
the past. Before there was not a wide variety of shoes, the same model
was sold for years, nobody really paid any attention to the quality
because there was high demand. Nowadays, each season requires a
different shoe and the Armenian tailors can satisfy the consumer’s
wants and needs. Those same tailors claim that they can even exceed the
consumer’s tastes and needs, but in that case the consumer’s wallet
might not meet the limit. The producers complain that 80% of the shoes
in Armenia are imported, and the local material for shoes is imported
as a whole, mainly from Turkey and very few from Italy. The shoe
factories in Armenia are out of business. According to the data given
by customs, for 11 months straight in 2004 leather (168 million drams)
and shoes (2,393,000,000 billion drams) were imported to Armenia. Some
shoes are imported from China and Syria, and also some from Italy,
Germany and the U.S. “The imported shoe is not like the local one in
its quality,” says owner of the “Helen” shoe factory Stepan Kadimyan,”
but the one advantage it has is the low price. That is why so many of
those shoes get sold. Leather shoes do not get imported that much, and
even if any of them do, they are usually shoes from Karabagh made from
artificial leather. The shoes we make are from clean leather, have high
quality and are expensive. But the shoes have resistance and people can
wear them longer. There is nothing better than an expensive but good
shoe, right? For example, the English say that they are not rich to buy
two pairs of shoes.”
There are “specialized” shoe stores in Armenia that show their product
as Italian brand name shoes, for example the “Valentina” store. But
some sources say that “Valentina” makes its shoes in Armenia. There is
a famous brand name shoe store called “Valentino” in Italy. The owners
of the store have changed the name to Valentina and play with the
consumers minds. The reality of it is that the Italian brand names are
more expensive than the shoes sold in Armenia. Some of the shoes are
made here and some are brought from Moscow. The shoes from the
“Palermo” store have been discounted and they don’t have a very high
quality. Other factories make the shoe on the spot and put the Italian
brand name on the shoe. True, they make the shoe high quality, but it
is nothing compared to the Italian one.” Owner of the “Palermo” shoe
store Anush explained that those Italian brand names make some cheap
model shoes for Armenia by request. There are two small shoe factories
working in Armenia-“Helen”, “Armos” and others. The rest of them are
unknown, sometimes not even registered. They are much smaller
factories. There are people who are involved in producing “expensive
shoes” and they are not picked randomly. First of all, they are
specialists of the Soviet era, and secondly, they have “contacts”.
Owner of “Helen” Stepan Kadimyan has worked in this field his whole
life. He started from an average worker and made his way up to being an
owner. Now, sources say that he is “working” with Robert Kocharyan’s
brother-in-law Vladimir Badalyan. One of the shareholders of “Palermo”
and “Valentina” is owner of SAS supermarket and National Assembly
deputy Artak Sargsyan.
The “Shoe Business” in Armenia has never been monopolized. “This is a
special type of business. It is sort of like an art, if you will. A
shoe is “a product that wears out easily”, you can produce a certain
amount, sell some for that season and the rest will not get sold. Then
you are forced to sell them at a low price, sometimes lower than the
actual price,” says one of the specialists. “You have no guarantee that
your business will go well. Armenian businessmen like to open a
business that brings a lot of money fast. Another thing-we don’t like
producing.”
The specialists in the shoe business claim that Armenian shoes are
medium quality, they are made with a middle class material and can not
compete with famous foreign brands. “Shoe production will not progress
if it continues like this. We have many opportunities to make
professional shoes,” says Ashot Babayan,” but we need the help of the
government. First of all, the government must help us by giving loans
for production and then help us expand in Moscow to display and sell
our products. What is the Ministry of Trade and Economy doing with the
money that they have? The shoe business in Armenia will never move
forward. I have been a shoe factory worker, but now I am just importing
and selling.” One anonymous specialist said the following: “There is
one key factor here: Armenian businessmen do not like to use Armenian
products. They will buy and wear the expensive, imported shoes but they
will not wear the same quality and better Armenian shoe. That’s just
low class. They keep saying that they will pay the amount they want for
Armenian shoes. As long as we continue with this psychology, the
Armenian tailor can never make a high quality shoe. He will bring a
medium quality shoe from Turkey and make something out of it. If he
makes a transaction with customs he can even export some to Russia.”