Footwear and its components remain an industrial hallmark of the province of Alicante, with Elche, Elda, Petrer, Villena and Crevillent as the main centres. In recent months, the sector’s associations have publicly warned of a fall in activity and employment. This article does not discuss specific companies but the sector as a whole: what the public data say, which financial signals are worth monitoring and what tools exist before the situation becomes irreversible. This analysis is part of our series on auditing standards and going concern.
What is happening in Alicante’s footwear industry
The most widely cited figures come from the Spanish Association of Footwear and Leather Goods Components Companies (AEC), which published them in June 2026:
- Between 2020 and 2025, the number of footwear manufacturing companies in Spain fell from 3,280 to 2,131, a drop of 35%, according to the Central Business Directory (DIRCE). In 2025, 195 closed.
- The Valencian Community is said to have lost 37% of its footwear businesses over that period.
- According to the AEC, the industrial production index for footwear fell by 9.2% in 2025 and by 29.1% year on year in April 2026.
These figures come from a trade association and have been reported in the press. Other publications based on the National Statistics Institute (INE) industrial production index for the leather and footwear aggregate give different monthly percentages, because they measure different aggregates. What matters for a company is not the decimal point but the trend: less production, more low-cost imports and a shrinking supplier chain. The employers’ associations FICE and AEC have called on the Ministry of Industry and Tourism for a sectoral competitiveness plan.
On top of this comes exposure to foreign markets. A significant share of the sector’s export turnover goes to the United States, which makes many companies sensitive to tariff changes and the exchange rate.
Warning signs in the balance sheet and cash position
Most crisis situations do not appear overnight: they show up first in a handful of indicators. The table lists those we recommend reviewing at least every quarter.
| Indicator | What it measures | Warning sign |
|---|---|---|
| 13-week cash forecast | Ability to meet short-term payments | Negative forecast balance with no committed financing |
| Working capital | Current assets less current liabilities | Negative or in continuous decline |
| Average collection and payment periods | Days taken to collect and to pay | Collection periods lengthening and supplier payments exceeding the legal time limits |
| Stock ageing | Weight of products from previous seasons | Stock from two or more seasons with no plan to sell it |
| Customer and market concentration | Dependence on a few buyers or countries | One customer or market above a third of sales |
| Net financial debt / EBITDA | Years needed to repay the debt | Rising ratio or negative operating profit |
| Equity compared with share capital | Solvency and company law risk | Equity below half of share capital |
The thresholds are indicative and must be adapted to each company. The last indicator deserves particular attention: losses that reduce equity to below half of the share capital are grounds for dissolution under the Spanish Companies Act, with obligations for the directors and specific deadlines.
Stock and fashion: the valuation risk
In footwear, inventory is both the main current asset and the main risk. The Spanish General Accounting Plan (PGC) requires inventories to be measured at cost and an impairment to be recognised when their net realisable value is lower. A model from a past season may be worth far less on the market than it cost to make.
Failing to recognise that impairment in time has two effects: the accounts show equity that does not exist, and management takes decisions on optimistic data. It is also one of the areas the auditor reviews most closely in a company in the sector, together with cut-off and customer returns.
From viability plan to restructuring
When the signs appear, the basic tool is a viability plan: a document that starts from the actual position, sets reasonable assumptions for sales, margins and costs, and concludes whether the company can meet its debts, with what measures and over what period. It is used to negotiate with banks and suppliers, to inform shareholders and to take decisions on production, workforce or product range.
If the situation is more serious, Law 16/2022, which reformed the Spanish Consolidated Insolvency Act (TRLC), allows action to be taken before insolvency proceedings (concurso de acreedores): notifying the court that negotiations with creditors have begun, or negotiating a restructuring plan, even where there is only a likelihood of insolvency. It also provides a special procedure for micro-enterprises. In any event, the debtor must file for insolvency within two months of becoming aware, or when it should have become aware, of its current insolvency. These decisions require legal advice, and the financial plan is their foundation.
A sound viability plan also makes the audit easier. As we explain in our article on NIA-ES 570 and going concern, the auditor evaluates management’s assessment of the company’s ability to continue, and documented forecasts allow the auditor to do so on a sound basis.
Acquisitions and valuations in a sector undergoing adjustment
Periods of adjustment also generate transactions: combinations of complementary businesses, sales of production units, the entry of investors or succession in family businesses. In all of them it is essential to know the real value of the business and its risks. An independent business valuation and financial due diligence help buyer and seller negotiate on verified data, especially as regards stock, customers and employment contingencies.
And when a dispute reaches the courts, for example in claims between shareholders or in insolvency proceedings, economic expert evidence makes it possible to quantify damages or analyse changes in the company’s net worth.
Frequently asked questions
How often should I review these indicators?
The cash forecast at least monthly, and weekly if there is pressure. The other indicators every quarter and always at the end of the season.
When do I need a viability plan?
When there are recurring losses, working capital is negative, cash problems are foreseen or a bank asks for one. The sooner it is prepared, the more options the company will have.
Does a viability plan prevent insolvency proceedings?
It does not guarantee it. It shows whether the company is viable and with what measures, and it is the basis for negotiating with creditors or for using the pre-insolvency tools in the Insolvency Act.
What happens if equity falls below half of the share capital?
It is a legal ground for dissolution that requires the directors to act within a set period, for example by calling a general meeting to restore the balance between equity and capital. It is advisable to consult a legal adviser as soon as it is detected.
Official sources
- Law 16/2022 reforming the Consolidated Insolvency Act (BOE)
- Consolidated Insolvency Act, consolidated version (BOE)
- Spanish Companies Act, consolidated version (BOE)
- Spanish General Accounting Plan, Royal Decree 1514/2007 (BOE)
- INE: Industrial Production Indices
- AEC data reported in the press (Alicante Plaza, 18/06/2026)
If your footwear or components company wants to get ahead of events, we can help you prepare a viability plan with realistic, verifiable assumptions. We are auditors in Alicante and we know the industrial fabric of the Vinalopó and Baix Vinalopó. Contact us.
Article prepared by Controlaudit’s technical team. Updated 08/10/2026. This content is for information only and does not replace professional advice on your specific case.