Ara Shoes To Shut Down Romanian Factory in Salaj in April

German footwear manufacturer Ara Shoes is set to close its Romanian factory in Salaj county, in April and lay off some of its employees in Bihor county, sources told Ziarul Financiar.

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Company officials have not commented.

At the end of 2018, Ara Shoes had over 1,000 employees in its two Romanian production units – 350-400 employees in Slaj and the rest in Bihor.

The sources said the main reason behind the restructuring decision is the repeated growth in minimum wage. Salaries in the footwear manufacturing industry are 35% below the overall average.

The average net salary in the industry is RON2,105 a month, according to statistical data for November 2019. The industry average has grown 10% year the past year and more than doubled over the past decade but mostly due to repeated minimum wage hikes.

Ara Shoes entered the local market more than 20 years ago, built two factories from scratch and invested around EUR20 million.

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