Germany's Ara AG, a major European footwear manufacturer, holding majority stakes in Ara Shoes, Lloyd Shoes and Legero Shoes Romanian companies, registered cumulated turnover worth 62.5m euros last year.
Ara Shoes Romania, the leading footwear producer in Romania according to the Chamber of Commerce data, last year reached turnover worth 30.3m euros, up around 25% from the 24.3m-euro figure reported in 2005.
The company's income registered a slight decrease, from 2.1m euros in 2005 to 1.9m euros in 2006, according to the data provided by Ara Romania, managing all the three companies the German group owns.
On the other hand, Lloyd Shoes Romania, the number two player on the domestic market of footwear producers as pointed out by the same sources, saw its turnover rise by 26% in 2006, to 29.4m euros. This time, too, income shrank by 30%, to 1.1m euros, according to Ara Romania.
"In both cases, turnover went up as we've boosted production capacities in the past year. Income on the other hand, was hurt by the artificial growth of the RON, with foreign currency-denominated prices being stable on international markets," Valerian Pavel, manager with Ara Romania and the financial manager with the 3 footwear producers, told ZF.
Germany's Ara AG has been present on the domestic market since 1997, when it acquired a facility and a building for its offices in Valea lui Mihai, Bihor county for 450,000 DM. Later on, the Germans transferred the production for the other two footwear brands of their portfolio, Lloyd Shoes (men's footwear) and Legero (sports footwear) to the same location.
At present, Ara AG owns 11 production facilities domestically, with around 2,800 employees.
Ara Romania, whose shareholders are Ara Shoes AG Germany and Granit Shoes GmbH Germany, is the company handling logistics, accounting and transportation services for the three footwear producers, and is also the owner of the 11 production facilities.
As Ara Shoes A.G. Germany produces its collection in its own firms of Romania, Portugal, Austria, Germany and Indonesia, the entire production is exported to Germany and Austria, wherefrom it is sold to customers.
The entire production of Lloyd Shoes Romania is sold by the parent company through its own distribution network, in store chains such as Deichman, Esprit or Hoffman.
The same stores also sell the children's and sports footwear manufactured by Legero Shoes Romania, which produces under contract for the Austrian plant Schunabrik GmbH. The Ara Shoes women's footwear can be found on the domestic market, too.
Domestic footwear production is harmed by the fact that a minimum wage that is not covered by labour productivity is imposed and by the friendly business environment of Moldova and Ukraine, says Pavel.
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