As yet unnamed, the 50-50 joint venture sealed between Ara Shoes and Wortmann earlier this year is preparing a forceful return to the wholesale market with the Salamander brand in European shoe stores from 2011 on.
The Salamander group reaped sales of about €177 million for the financial year ended last May, but since Salamander failed to offer any collections last year, this turnover chiefly consisted of retail sales of other brands by Salamander's 48 German stores and 135 stores in eight other European countries. The German stores have since been sold to Klauser, a shoe retailing company in Wuppertal, while the foreign stores have been excluded from the joint venture with Wortmann.
After its acquisition of Salamander early last year, the Ara group dismantled the company's central office in Offenbach, which employed 40 people. Ara retained only six employees from this unit and transferred them to Ara's head office in Langenfeld.
Meanwhile, Ara has worked on a children's footwear range under the Lurchi brand, which is part of the Salamander group and will be introduced to retailers in the coming weeks to be retailed during the coming autumn/winter season. Comprising about 40 styles that will sell at between €40 and €70 a pair for the most part, the new Lurchi collection is likely to meet good demand in Germany as an alternative to Elefanten, which has become the private brand of Deichmann.
The Salamander men's range is due to be launched for spring 2011, and the women's range planned for the following winter will be made together with Wortmann.
Ara will take some more time to review its international network of 135 Salamander stores. It is one of the most widely spread chains in Europe, with 29 stores in Austria, 33 in France, three in Belgium, 24 in Russia, 12 in the Czech Republic, two in Slovakia, 18 in Hungary and 14 in Poland. Some of the Russian stores have been suffering from the hairy market circumstances there in the last two years, but otherwise this extensive Salamander store network is generally healthy.
Although there are only a few employees left at Salamander's German office, the group still employs more than 1,000 people, working in its six European subsidiaries and the Salamander stores. More than 350 workers are employed in Austria alone. The company has offices in France, Austria, Poland, the Czech Republic, Hungary and Russia. Most of them deal with retailing only, managing Salamander stores that sell this brand (when available) along with other brands.
The French situation is an exception, since the assortment of the French stores consists of the Salamander brand at about 80 percent. In the absence of any range produced by the company last year, the French office was authorized to keep its business going by sourcing its own Salamander footwear. Another exception is Russia, where the Salamander subsidiary handles retail outlets and wholesale sales to third customers.
The return to the wholesale market is one of the two main purposes of Ara's partnership with Wortmann. To begin with, the effort will focus on Germany and the rest of Europe, while other international markets are to be targeted in the longer term. One exception is Japan, where Salamander has already signed a license with Ara's long-term partner in this country.
In Germany, the joint venture will target multi-brand retailers including a dozen stores that feature the Salamander logo on their displays ? due to the fact that they were formerly part of the Salamander Bund. However, it remains to be seen how Salamander will roll out the brand on a large scale in Germany without affecting the interests of Klauser and its Salamander stores.
When it comes to sourcing, the partnership with Wortmann will give access to trusted facilities in the Far East to manufacture Salamander footwear. The Ara group itself has its own production facilities in Germany, Portugal, Indonesia and Romani, with a wide range of specialties and price points, and it sometimes uses the facilities of Legero, the Austrian children's footwear company in which it has a large minority stake.
At least 70 percent of Ara's production is issued from its own plants. Furthermore, Ara has built another facility in Ethiopia, which went into production last year. This is still not running at full capacity, but Ara is targeting capacity of about 1 million pairs in the mid-term. Still, the partnership with Wortmann will take over at least some of the extra production required for Salamander.