Will Duluth Trading survive the Trump Administration’s tariff regime? Maybe, but not happily. Duluth Trading like a lot of clothing companies imports a huge amount of products. American clothing manufacturing is a joke if you weren’t aware, compared to the endless factories of Asia and even more recently Central America.
The Trump Administration plans tariffs on seemingly every country on the planet with a host of different rates suggested… from 10% to 20%, to 60% in the case of China, to 100% if BRICS tries to make it’s own currency a trade currency. Tariff policy is in a state of constant flux. And even when tariff policies are enacted it’s going to take forever to go through the details and figure out what the real world impact will be. Trade policy / tariff policy is ridiculously complex.
Tariffs are going to hit any company that imports most of its products especially hard. Companies like Duluth Trading will have to figure out some way to pass the increase in costs on to the customer without driving them off.
Duluth doesn’t disclose every country it imports from except as required on clothing and I just don’t have every single piece of their clothing available. So we’re going to have to go off of their website and some of the countries I already know.
So let’s take a look at Duluth Trading’s men’s clothing…
- Armachillo Cooling Boxer Briefs are imported (unknown country)
- Men’s Buck Naked Boxer Briefs are imported (unknown country)
- Men’s Buck Naked Bullpen Boxer Briefs are imported (unknown country)
- Men’s Everyday 6-Pack Midweight Crew Socks are imported (unknown country)
- Men’s Armachillo Crew Undershirt are imported (unknown country)
- Men’s Armachillo Untucked Crew Undershirt are imported (unknown country)
- Men’s Free Range Organic Cotton Crew Undershirt are imported (unknown country)
- Men’s Buck Naked Crew Undershirt are imported (unknown country)
- Men’s DuluthFlex Fire Hose Standard Fit Cargo Work Pants are imported (unknown country)
- Men’s DuluthFlex Fire Hose HD Standard Fit Cargo Pants are imported (unknown country)
- Men’s DuluthFlex Powersquat Work Pants are imported (unknown country)
- Men’s DuluthFlex Ballroom Relaxed Fit Jeans are imported (unknown country)
- Men’s Ballroom Double Flex Relaxed Fit Carpenter Jeans are imported (unknown country)
- Men’s Wild Boar Leather Pull-On Boots are imported (unknown country)
- Men’s Ground Effect Boots are imported (unknown country)
- Men’s Muck Chore Chelsea Work Boots are imported (unknown country)
- Men’s Whaleback Waterproof Insulated Jacket are imported (unknown country)
- Men’s Superior Fire Hose Insulated Jacket are imported (unknown country)
- Men’s Smartwool Larimer Crew Socks are made in the USA
- Men’s Everyday 3-Pack Compression Socks are made in the USA
- Men’s 7-Year Lightweight Performance Over-the-Calf Socks are made in the USA (components imported)
- Men’s Woven Elastic Stretch Belt are made in the USA
- Men’s Holier Than Thou Work Belt are made in the USA (some components imported)
- Durahog Insulated Work Gloves are imported (unknown country)
- Men’s Fence Mender Gauntlet Gloves are imported (unknown country)
Now let’s take a look at women’s clothing…
- Women’s NoGA Classic Slim Leg Pants are imported (unknown country)
- Women’s NoGA Namastash Slim Leg Pants are imported (unknown country)
- Women’s NoGA Classic Capris are imported (unknown country)
- Women’s Heirloom Gardening Bib Overalls are imported (unknown country)
- Women’s Duluth Reserve Straight Leg Coveralls are imported (unknown country)
- Women’s Buck Naked High Cut are imported (unknown country)
- Women’s Dang Soft Boyshort are imported (unknown country)
- Women’s Buck Naked Bralette are imported (unknown country)
- Women’s Drift Kicker Pac Boots are imported (unknown country)
- Women’s Muck Tall Classic Chore Boots are imported (unknown country)
- Women’s Graphic Logo T-Shirt are imported (unknown country)
- Women’s Longtail T Elbow Sleeve Scoopneck are imported (unknown country)
- Women’s Wickerino Wool Base Layer 1/4 Zip Top are imported (unknown country)
- Women’s Plus T-Shirt Flannel Long Sleeve Shirt are imported (unknown country)
- Women’s Fleecey Does It Tunic Pullover are imported (unknown country)
- Women’s Free Swingin’ Lined Flannel Shirt Jac are imported (unknown country)
- Women’s Sockwell Fauna Firm Compression Socks are made in the USA (some components may be imported)
- Women’s Stay-Put Performance Crew Socks are made in USA (some components may be imported)
I think you now get the idea. Like most clothing retailers Duluth Trading has an enormous amount of foreign made products. Which is not good news for Duluth. No matter how many countries manufacturing capacity Duluth uses they are going to get hit with tariffs. I really do not believe that the Trump Administration cares about any country except the United States. I’m not sure President Elect Donald Trump is familiar with ANY country that isn’t the United States.
Duluth Trading imports its products from a number of countries, including Honduras, Vietnam, Thailand, and Cambodia. I actually have Duluth Trading shirts and they’re all from Honduras, Vietnam, or Cambodia. The shirts are the same type, so Duluth is having them manufactured in three different countries. That just goes to show how widely Duluth Trading’s supply chain is spread and subsequently just how much more of a nightmare the Trump Administration’s tariffs are going to be for Duluth.
It’s very easy to see the Trump Administration raising tariffs on the entire world. That will throw a wrench into Duluth Trading’s entire supply chain and drive up costs. And remember countries do not pay tariffs, consumers ultimately do. So retail prices are going to go up.
And if retail prices go up consumers may pull back and purchase less and less, leading to a revenue drop, leading to businesses becoming unsustainable. And Duluth Trading doesn’t have much leeway in its finances. Duluth Trading only earns $646 million per year, that does not provide much cushion financially. It’s not like Walmart who can take the financial hit of extreme tariffs. If revenue dropped even just 20% Duluth Trading would be scrambling to survive. And 20% is very possible given the extreme price increases consumers will experience if the Trump Administration’s tariffs are fully implemented as discussed.
If Duluth isn’t already gaming out how to comply with the Trump Administration’s extreme tariffs they better start now because this is going to be one rocky road. Not only do you have to comply with and pay ridiculous tariffs on your products you also have to somehow convince your customers to keep shopping at a retailer that just raised prices by 60%.
So Duluth Trading will come under serious financial strain if the Trump Administrations tariffs are implemented. A vicious circle of increased product prices, leading to consumers not buying product, leading to financial strain… It’s just not good. As of July 31, 2024, Duluth Trading Company reported having only $10 million in cash. Duluth probably couldn’t take the financial strain.
There is certainly a risk that Duluth Trading becomes a victim of the Trump Administration’s increased tariff regime and becomes bankrupt. If you’re a Duluth fan I’m sorry. But things aren’t looking good.
This article does not constitute financial advice, if you want financial advice see an advisor, and forward looking statements are a matter of opinion.